Service-Dominant Orientation in Two-Wheeler Industry in India

Service-Dominant Orientation
†
in Two-Wheeler Industry in India
Agrim Verma* and Monica Bedi**
The recent perspective on customer orientation in marketing world focuses on service-dominant

orientation. Service-dominant orientation involves an interactional role of the customer by emphasizing
on the importance of customer as cocreator of value. The paper aims to study service-dominant
orientation in two-wheeler industry in India, and also the perception about service-dominant orientation
in two-wheeler industry across gender, educational qualification and monthly income. The study is
descriptive in nature. The authors use the service-dominant orientation scale consisting of six distinct
dimensions, namely, relational interaction, ethical interaction, individuated interaction, empowered
interaction, concerted interaction and developmental interaction. The test used for analysis includes one-
way ANOVA. The results indicate that service-dominant orientation plays a critical role in enhancing
buyer-seller relationship. The involvement of customers as value cocreators improvises the whole process
of transactional exchange. Services play a significant role in two-wheeler industry in India because of high
levels of competition and rivalry between players in the industry.
Introduction
Service science has become a major area of focus for marketing study over the years. Realizing
the importance of services in the highly competitive business world, it has become essential
to manage each and every customer touchpoint involved for the smooth experience of
economic exchange (Rawson et al., 2013). The influence of Goods-Dominant (G-D) logic of
marketing literature has undergone a transition and made way for Service-Dominant (S-D)
logic. The focus has shifted to intangible resources from the age-old focus on product alone.
Customers’ encounter with a brand not only influences the present purchase decisions but
also future purchase decisions. Several aspects make up the experience of customers’ interaction
with a brand, including customer service, quality of the product and quality of transactional
exchange (Hyken, 2018). The purchase decisions of customers today have become service
quality dominated (Taylor and Baker, 1994). In order for firms to keep pace with demands of
customers, organizations have to focus on high quality service delivery. At the same time,
service-dominant orientation immensely benefits the firms in the long run because of its
performance outcomes. Service-dominant orientation positively impacts all spheres of
performance outcomes for a firm, including financial, market and customer-related
† Accepted for presentation at the conference: “Global Issues in Management – 2019” organized by University
Business School, Panjab University, Chandigarh (February 26, 2019).
* Research Scholar, University Business School, Panjab University, Chandigarh, India; and is the corresponding
author. E-mail: agrimverma.ubs@gmail.com
* * Assistant Professor, University Business School, Panjab University, Chandigarh, India.
E-mail: monicabedi1607@gmail.com
© 2019 IUP. All Rights

Service-Dominant Reserved.
Orientation in Two-Wheeler Industry in India 37
performance. The benefits of customer-related performance are encashed in the form of
higher satisfaction levels, commitment and loyalty, trust, positive word-of-mouth and hence
positive impact on repurchase intentions (Karpen et al., 2012). Adopting service-dominant
orientation has strategic implications because customers act as network partners and cocreate
their own experiences with a firm by directly utilizing firm resources in the form of employees,
firm interface, products and services offered and websites (Vargo and Lusch, 2004).
The automotive industry constitutes five segments, i.e., commercial vehicles, passenger
vehicles, three-wheelers, two-wheelers and automotive components. The automotive
industry in India is a major contributor to India’s GDP with a share of 7.1%. In terms of
industrial GDP, automotive industry again is a major contributor with 27% share. There has
been a compound annual growth rate of 10.5% during the Automotive Mission Plan (AMP)
2006-16 (Government of India, 2016). As per global rankings, India is also the second largest
country in terms of manufacturing output (SIAM, 2016). In addition to this, the automotive
industry is composed of two-wheeler segment with 80% share. The production of two-wheeler
vehicles is expected to be at 50.6 million units annually by 2026, and in future, India will
make it to the spot of being the third largest automotive market in the world in terms of
volume by 2026 (Make in India, 2014).
Conceptual Framework
The traditional model of customer orientation was based on goods-dominant logic of value
creation which only focuses on production of units of output (Lusch et al., 2008). So, in this
process, the value of services was generally ignored. Recently, there has been increased focus
on service-dominant logic in the marketing world. The service-dominant logic refers to a
service-based view of marketing phenomenon that regards service as the core reason for
exchange and enabling value cocreation practices. But lately, the marketing literature has
witnessed a shift in perspective from service-dominant logic to service-dominant orientation.
According to Karpen et al. (2015), the construct of service-dominant orientation refers to
“an organization’s ability to facilitate and enhance mutually beneficial interaction and resource
integration processes with individual actors within the service system.”
The marketing literature chose to focus on exchange of goods as the means for effecting a
transaction from the field of Economics. The focus then was on exchange of tangible goods
and resources holding a certain value. Over a period of time, new perspectives emerged and
the focus was shifted towards intangible resources, cocreation of value and building
relationships. This slowly became the logic dominating the field of marketing. The emphasis
was thus on provision of service along with an exchange of tangible resources (Vargo and
Lusch, 2004). Further, Vargo and Lusch (2008) in their study introduced modifications and
additions in service-dominant logic. The modifications added to the existing literature
termed the customer as a cocreator of value and not just a co-producer, implying that value
creation practices are interactional.
The goods-dominant logic did not hold any importance for the intangible aspects of
economic exchange. It was only the shift in perspective to service-dominant logic which
38 The IUP Journal of Business Strategy, Vol. XVI, No. 1, 2019

highly emphasized on the importance of services for economic exchange. The service-
dominant logic stressed on the concept of creating experiences for customers. Whereas, the
goods-dominant logic focused on selling products to the customers. The goods dominant
logic concentrated on creating products for customers and service-dominant logic focused
on meeting the needs of the customers. The concept of service-dominant logic is based on
operant resources which refer to resources which are intangible by nature and are used for
acting upon other resources to be converted into useful form. Whereas, goods-dominant
logic focuses on operand resources which refers to resources tangible in nature and need help
of other resources to be converted into useful form (Lusch et al., 2008; and Vargo et al., 2010).
The service-dominant orientation is a construct used to measure service-dominant logic.
The relevance of customer orientation is grounded in the concept of service-dominant
orientation which in today’s world is the new dominant logic in marketing. According to
Lusch and Vargo (2006), service can be defined as “the application of specialized competences
(knowledge and skills), through deeds, processes, and performances for the benefit of another
entity or the entity itself.” The service-dominant orientation also suggests that ‘producing’
should be transformed to ‘resourcing’. Resourcing refers to the process of creating value
through collaboration and includes every party involved in the value creation network.
Objectives
Following are the main objectives of the study:
• To measure service-dominant orientation in two-wheeler industry in India; and
• To study the perception about service-dominant orientation in two-wheeler
industry across gender, educational qualification and monthly income.
Hypotheses
The research hypotheses are as follows:
H01: There exists no difference in mean scores across gender for service-dominant orientation.
H02: There exists no difference in mean scores across educational qualification categories on
service-dominant orientation.
H03: There exists no difference in mean scores across income categories on service-dominant
orientation.
Data and Methodology

The study is descriptive in nature and includes a survey of two-wheeler vehicle drivers.
Convenience sampling was used for the collection of data from a sample of 105 respondents.
A questionnaire was designed for the survey and the level of agreement of respondents
was measured on a five-point Likert scale where 1 = strongly disagree and 5 = strongly agree.
Service-dominant orientation was measured using a scale validated and developed by Karpen
et al. (2015) called ‘service-dominant orientation’. The scale comprises 24 items. The scale is
composed of six dimensions, namely, Relational Interaction (RI), Ethical Interaction (ETI),
Service-Dominant Orientation in Two-Wheeler Industry in India 39

Individuated Interaction (II), Empowered Interaction (EMI), Concerted Interaction (CI)
and Developmental Interaction (DI). The concept of service-dominant orientation was first
introduced by Karpen et al. (2012) in order for organizations to be able to cocreate value
through customers and other network partners involved. Demographic information, including
gender, age, marital status, monthly household income, educational qualification and
profession, was also collected.
One-way ANOVA was used to analyze the data. Analysis was performed using SPSS
version 20. The reliability of scale as measured by the alpha coefficient reflects the degree of
cohesiveness among the scale items and is therefore an indirect indicator of convergent
validity. The Cronbach’s alpha values for all the six dimensions were found to be fairly high
as is shown in Table 2.
Results and Discussion

Profile of the Sample
Table 1 presents the profile of the respondents who had participated in the study. In terms of
gender, the sample was a fair representation as 53.33% were male respondents and 46.66%
were female respondents. 86.66% of the sample size belonged to the age group of
Table 1: Profile of the Respondents

Particulars N %
Male 56 53.33
Gender
Female 49 46.66
16 to 29 91 86.66
Age (in years)
30 to 49 14 13.33
Less than 20,000 17 16.19
20,001 to 30,000 16 15.23
Monthly Income (in )
30,001 to 40,000 17 16.19
More than 40,000 55 52.38
Unmarried 95 90.47
Marital Status
Married 10 9.52
Class XII 25 23.80
Educational Qualification Graduate 36 34.28
Postgraduate 44 41.90
Service 22 20.95
Profession Business and Profession 24 22.85
Student 59 56.19

16 to 29 years, indicating that it is a youth-dominated sample as two-wheeler vehicles are a
preferred choice of the youth in the country. Almost half of the sample belonged to the
monthly income group of more than 40,000. 90.47% of the sample was unmarried and only
9.52% of the sample was married because of the reason that it is a youth-dominated sample.
The sample mix shows that 42.85% were postgraduates, 33.33% graduates and 23.80% high-
school pass outs. In terms of the profession, the sample comprised 56.19% students because it
being a youth-dominated sample.
Descriptive Statistics
Table 2 depicts the descriptive statistics of the sample, including mean and standard deviation
values of the observed dimensions of service-dominant orientation. The descriptive statistics
show the pattern of score distribution. The statistics show that the mean value for service-
dominant orientation construct is 85.08 with a standard deviation of 13.871. In terms of the
various dimensions of service-dominant orientation, relational interaction has the highest
mean value of 15.05 with standard deviation of 2.754, followed by individuated interaction
with a mean value of 14.51 and standard deviation of 2.849.
One-Way ANOVA
Across Gender
A one-way between-subjects ANOVA was conducted to compare the effect of gender on
dimensions of service-dominant orientation scale in two-wheeler industry. As shown in
Table 3, there was a significant effect of gender on three dimensions of service-dominant
orientation: relational interaction at p < 0.05 level [F (1, 103) = 6.377, p = 0.013]; empowered
interaction at p < 0.05 level [F (1, 103) = 5.041, p = 0.027]; and developmental interaction
at p < 0.05 level [F (1, 103) = 5.532, p = 0.021]. As a result, H01 stands partially accepted and
partially rejected.
Across Educational Qualification
A one-way between-subjects ANOVA was conducted to compare the effect of educational
qualification on dimensions of service-dominant orientation scale in two-wheeler industry.
As shown in Table 4, there was a significant effect of educational qualification on two
dimensions of service-dominant orientation: empowered interaction at p < 0.05 level for
the three levels of educational qualification [F (2, 102) = 3.516, p = 0.033]. Further, post hoc
comparisons using the Tukey HSD test indicated that in the case of empowered interaction,
the mean score for customers with educational qualification as class XII (M = 12.32,
SD = 2.734) was significantly different from that for customers with educational qualification
as graduate (M = 14.06, SD = 2.629). Furthermore, the mean score for customers with
educational qualification as class XII (M = 12.32, SD = 2.734) was not significantly different
from that for the customers with educational qualification as postgraduate (M =13.91,
SD = 2.819). However, the mean score for customers with educational qualification as graduate
(M = 14.06, SD = 2.629) was not significantly different from that for customers with
educational qualification as postgraduate (M = 13.91, SD = 2.819).

42
Table 2: Descriptive Statistics and Cronbach’s Alpha Values
S. Statement Cronbach’s
Statement Dimension Mean SD
No. Code Alpha
1. RI1 This automobile dealership and its representatives make me feel at ease 3.83 0.925
during our dealings.
2. RI2 This automobile dealership and its representatives try to establish rapport with me. 3.70 0.940
Relational
3. RI3 This automobile dealership and its representatives encourage two-way Interaction 3.75 0.896 0.726
communication with me.
4. RI4 This automobile dealership and its representatives show genuine interest 3.76 0.956
in engaging me.
5. ETI1 This automobile dealership and its representatives do not try to take advantage 3.24 1.165
of me.
Ethical
6. ETI2 This automobile dealership and its representatives do not pressurize me in any way. 3.46 1.118 0.882
Interaction
7. ETI3 This automobile dealership and its representatives do not mislead me in any way. 3.45 1.126
8. ETI4 This automobile dealership and its representatives do not try to manipulate me. 3.38 1.069
9. II1 This automobile dealership and its representatives make an effort to understand 3.71 0.948
my individual needs.
10. II2 This automobile dealership and its representatives are sensitive to my individual 3.41 0.885
situation. Individuated
0.804
Interaction
11. II3 This automobile dealership and its representatives make an effort to find out 3.72 0.904
what kind of offering is most helpful to me.
12. II4 This automobile dealership and its representatives seek to identify my personal 3.67 0.851
expectations.
The IUP Journal of Business Strategy, Vol. XVI, No. 1, 2019

Table 2 (Cont.)
S. Statement Cronbach’s
Statement Dimension Mean SD
No. Code Alpha
13. EMI1 This automobile dealership and its representatives invite me to provide ideas 3.10 1.229
or suggestions.
14. EMI2 This automobile dealership and its representatives encourage me to shape the 3.44 0.980
Empowered
service I receive.
Interaction
0.656
15. EMI3 This automobile dealership and its representatives provide me with control 3.28 0.872
over my experiences.
16. EMI4 This automobile dealership and its representatives let me interact with them 3.77 0.869
in my preferred way.
17. CI1 This automobile dealership and its representatives work together seamlessly 3.64 0.810
in serving me.
18. CI2 This automobile dealership and its representatives act as one unit when 3.61 1.014
dealing with me. Concerted
Service-Dominant Orientation in Two-Wheeler Industry in India

Interaction 0.797
19. CI3 This automobile dealership and its representatives provide me messages 3.55 0.940
that are consistent with each other.
20. CI4 This automobile dealership and its representatives ensure they have smooth 3.67 0.967
procedures for interacting with me.
21. DI1 This automobile dealership and its representatives share useful information with me. 3.66 1.082
22. DI2 This automobile dealership and its representatives help me become 3.41 0.968
more knowledgeable. Developmental
0.877
23. DI3 This automobile dealership and its representatives provide me with the advice
Interaction 3.62 0.944
I need to use their offerings successfully.
24. DI4 This automobile dealership and its representatives offer me expertise that 3.26 1.056
I can learn from.
43
Table 3: Results of One-Way ANOVA Across Gender
Service-
Dominant Gender Mean
N Mean SD F p
Orientation (IV) Difference
(DV)
Relational Male 56 14.4 2.669
6.377 –1.327 0.013*
Interaction
Female 49 15.8 2.704
Ethical Male 56 13.0 4.208
2.575 –1.199 0.112
Interaction
Female 49 14.2 3.319
Individuated Male 56 14.0 2.68
3.739 –1.064 0.056
Interaction
Female 49 15.1 2.957
Empowered Male 56 13.0 2.812
5.041 –1.207 0.027*
Interaction
Female 49 14.2 2.671
Concerted Male 56 14.2 3.174
1.145 –0.617 0.287
Interaction
Female 49 14.8 2.669
Developmental Male 56 13.2 3.681
5.532 –1.561 0.021*
Interaction
Female 49 14.8 3.029
Note: * Significant at 0.05 level; DV: Dependent Variable; IV: Independent Variable.
Moreover, it was found that there was a significant effect of educational qualification on
developmental interaction at the p < 0.05 level for the three levels of educational qualification
[F (2, 102) = 3.921, p = 0.023]. Post hoc comparisons using the Tukey HSD test indicated
that the mean score for customers with educational qualification as class XII (M = 12.48,
SD = 3.776) was significantly different from that for the customers with educational
qualification as postgraduate (M = 14.84, SD = 3.003).
Furthermore, the mean score for customers with educational qualification as class XII
(M = 12.48, SD = 3.776) was not significantly different from that for the customers with
educational qualification as graduate (M =13.86, SD = 3.506). However, the mean score for
customers with educational qualification as graduate (M = 13.86, SD = 3.506) was not
significantly different from that for the customers with educational qualification as
postgraduate (M = 14.84, SD = 3.003). As a result, H02 stands partially accepted and partially
rejected.
Across Monthly Income

A one-way between-subjects ANOVA was conducted to compare the effect of monthly
income on dimensions of service-dominant orientation scale in two-wheeler industry. As
shown in Table 5, there was a significant effect of monthly income on developmental
interaction at p < 0.05 level for the four levels of monthly income [F (3, 101) = 2.827,

Table 4: Results of One-Way ANOVA Across Educational Qualification
Service- Educational p p
p Mean
Dominant Qualification N Mean SD (Levene’s Conditions (Multiple
(ANOVA) Difference
Orientation (DV) (IV) Statistic) Comparisons)
Class XII 25 14.52 2.710 Class XII and Graduate –0.202 0.957
Relational
Interaction Graduate 36 14.72 3.326 3.351 0.195 Class XII and Postgraduate –1.094 0.252
Postgraduate 44 15.61 2.159 Graduate and Postgraduate –0.891 0.320
Class XII 25 13.20 3.215 Class XII and Graduate 0.089 0.996
Ethical
Interaction Graduate 36 13.11 3.963 1.144 0.501 Class XII and Postgraduate 0.845 0.656
Class XII 25 14.68 2.393 Class XII and Graduate 0.319 0.905
Individuated
Interaction Graduate 36 14.36 3.100 0.990 0.909 Class XII and Postgraduate 0.135 0.981

Class XII 25 12.32 2.734 Class XII and Graduate –1.736 0.043*
Empowered
Interaction Graduate 36 14.06 2.629 0.757 0.033* Class XII and Postgraduate –1.589 0.058
Postgraduate 44 13.91 2.819 Graduate and Postgraduate 0.146 0.969
Concerted
Interaction Graduate 36 14.33 3.312 1.069 0.737 Class XII and Postgraduate –0.527 0.759
Developmental
Interaction Graduate 36 13.86 3.506 1.313 0.023* Class XII and Postgraduate –2.361 0.017*
45
46
Table 5: Results of One-Way ANOVA Across Monthly Income
Service-
p Mean p
Dominant Monthly Income p
N Mean SD (Levene’s Conditions (Amount in ) Difference (Multiple
Orientation (IV) (in ) (ANOVA)
Statistic) Comparisons)
(DV)
Less than 20,000 17 15.41 3.318 Less than 20,000 and 20,001 to 30,000 0.974 0.746
Relational
Interaction 20,001 to 30,000 16 14.44 2.220 Less than 20,000 and 30,001 to 40,000 0.471 0.960
30,001 to 40,000 17 14.94 2.794 Less than 20,000 and more than 40,000 0.266 0.986
1.147 0.764
More than 40,000 55 15.15 2.738 20,001 to 30,000 and 30,001 to 40,000 –0.504 0.954
20,001 to 30,000 and more than 40,000 –0.708 0.806
30,001 to 40,000 and more than 40,000 –0.204 0.993
Less than 20,000 17 13.47 4.079 Less than 20,000 and 20,001 to 30,000 –1.592 0.632
Ethical
Interaction 20,001 to 30,000 16 15.06 3.678 Less than 20,000 and 30,001 to 40,000 –0.588 0.970
0.433 0.241
More than 40,000 55 12.93 3.920 20,001 to 30,000 and 30,001 to 40,000 1.004 0.875
20,001 to 30,000 and more than 40,000 2.135 0.208
30,001 to 40,000 and more than 40,000 1.132 1.061
Individuated
30,001 to 40,000 17 14.00 2.622 Less than 20,000 and more than 40,000 –0.366 0.968
0.966 0.625
More than 40,000 55 14.84 2.713 20,001 to 30,000 and 30,001 to 40,000 0.000 1.000
20,001 to 30,000 and more than 40,000 –0.836 0.734
30,001 to 40,000 and more than 40,000 –0.836 0.720
The IUP Journal of Business Strategy, Vol. XVI, No. 1, 2019

Table 5 (Cont.)
Service-
p p
Dominant Monthly Income p Mean
N Mean SD (Levene’s Conditions (Amount in ) (Multiple
Orientation (IV) (in ) (ANOVA) Difference
Statistic) Comparisons)
(DV)
Empowered
0.314 0.479
20,001 to 30,000 and more than 40,000 –0.897 0.675
30,001 to 40,000 and more than 40,000 –0.474 0.929
Concerted
0.407 0.475

20,001 to 30,000 and more than 40,000 0.534 0.920
30,001 to 40,000 and more than 40,000 0.556 0.905
Developmental
30,001 to 40,000 17 14.06 2.989 Less than 20,000 and more than 40,000 2.677 0.026*
1.692 0.042*
20,001 to 30,000 and more than 40,000 0.118 0.999
30,001 to 40,000 and more than 40,000 0.677 0.888
47
p = 0.042]. Post hoc comparisons using the Tukey HSD test indicated that the mean score for
customers with monthly income less than 20,000 (M = 16.06, SD = 2.461) was significantly
different from that for the customers belonging to the monthly income group of more than
40,000 (M = 13.38, SD = 3.535). As a result, H03 stands partially accepted and partially rejected.
Conclusion
As has been emphasized above, service-dominant orientation plays a critical role in enhancing
buyer-seller relationship. Service-dominant orientation is based on two-way interaction
between buyer and seller. The involvement of customers as value cocreators improvises the
whole process of transactional exchange. Services play a significant role in two-wheeler
industry in India because of high levels of competition and rivalry between players in the
industry. The two-wheeler industry also has a heavy customer base with approximately 80%
share of the automobile industry in India. Considering the future growth aspects and potential
of the two-wheeler industry, the quality of services will influence the buying decisions of
customers. Customers today tend to develop preferences for firms that are better at interactions
and help in enhancing their experience.
Managerial Implications: As the results show, gender has a significant effect on relational
interaction. It means that the business firms should keep in mind the gender of the customer
while dealing with the customers. Relational interaction capability refers to an organization’s
ability to enhance the connection of social and emotional links with all the parties involved
in the service system. As gender has a significant effect on relational interaction, the
expectations of male and female customers could vary. Moving further, the results indicate
that all three demographic factors, i.e., gender, educational qualification and monthly income,
have a significant effect on developmental interaction. Developmental interaction refers to
an organization’s ability to assist individual actors’ own knowledge and competence
development within the service system. So, the level of knowledge, competence and the
ability to make better decisions and use of resources are impacted by gender, educational
qualification and monthly income. Therefore, two-wheeler automobile companies should
focus on gender, educational qualification and monthly income of customers while involving
customers as network partners in the process of value cocreation. The results also reveal that
gender and educational qualification have a significant impact on empowered interaction.
Empowered interaction refers to the degree of involvement of customers in the process of
exchange so that they can extract the most desired level of output. Business firms should
keep the demographic factors in mind in the process of empowering and enabling the
customers to design their experiences and value creation as per their own expectations. The
results of the study also depict that out of all the dimensions of service-dominant orientation,
relational interaction has been highly appreciated by customers. Presently, relational
interaction capability is a tool used by two-wheeler automobile companies for enhancing the
experience of customers.
Limitations and Future Research: The study has applied the concept of service-dominant
orientation particularly to the two-wheeler industry in India. But some limitations make way

for further research in the area. Firstly, the sample size for the study is small. The scope of the
study was also limited, and so the scope can be extended by expanding the geographic scope
of research. An attempt can also be made to conduct future research on service-dominant
orientation in the automotive industry as a whole.
References
1. Government of India (2016), “Automotive Mission Plan (2016-26): A Curtain Raiser”.
2. Hyken S (2018), “Customer Experience Is The New Brand”, Forbes.
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Reference # 33J-2019-03-03-01

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38 The IUP Journal of Business Strategy, Vol. XVI, No. 1, 2019

Data and Methodology