CONSUMERS SATISFACTION OF ATTRIBUTES IN ONLINE PRODUCT DESIGN

&

IT’S IMPACT ON WILLINGNESS TO PAY

Master Thesis

Master of Science Economic and Business

Master Specialization Marketing

Erasmus University

Author: Semra Kurt

Student number: 282725

Coach: Dimitris Tsekouras

1

PREFACE

This thesis is a part of completion of the master Marketing of the study Business Economics

at the Erasmus University Rotterdam. To receive the Master of Science degree in Marketing is

of great value to me. Although I’ve spent five years to complete a whole study, I put out

everything I could give in order to successfully complete my courses.

Using this opportunity, I would like to thank several people who gave me fully support during

my graduation period.

My special thanks go on the first place to my parents, who gave me the ability to study abroad

and were always there to support me.

To Hakan Tekin, not only as a partner but also as my best friend, being side by side on good

and bad days for his unlimited patience during the time I’ve spent on writing this thesis. And

for sure, it was a long time…

Special thanks to my lovely sisters and dear friends for their support and help. Without them I

would not able to collect my data for the thesis so quickly.

Last, but not at least, Dimitris Tsekouras, my supervisor. Without his comments, guidelines

and feedback I wasn’t be able to finish my thesis. His patience and support is also very

appreciated.

Semra Kurt,

Rotterdam, March 2012

2

ABSTRACT

Online co-designing, as a new era of personalization, aims to provide individually self-made

goods that meet exactly consumers’ needs. The present study seeks to develop a better

understanding how co-designing is evaluated by consumers through information and

interaction systems. It provides highlights in the process of co-designing a product to own

needs or desires. This study focuses on the websites and the toolkits, which are used to

actually help consumers to make their own products. By mass customization, the online

experience is a critical factor for completing the process and the ability of a merchant is

reflected in its ability to handle sales transactions and the expertise to generally conduct

business online. When consumers experience superior states of satisfaction, they perceive a

high outcome of a trade and therefore are willing to pay more than less satisfied consumers,

because this results in a reasonable relation of outcome to input. In this sentence, it is found

that Product Satisfaction is the mainly influencer of willingness to pay.

Keywords: Mass Customization, Satisfaction, Online Toolkit, Willingness-To-Pay

3

TABLE OF CONTENTPREFACE__________________________________________________________________2ABSTRACT________________________________________________________________3TABLE OF CONTENT_______________________________________________________4PART I. INTRODUCTION___________________________________________________51.1 Mass customization and importance of online product co-design_________________________________51.2 Research relevance_______________________________________________________________________7

1.2.1 The current study and the research questions________________________________________________81.3 Outline of the study______________________________________________________________________9PART II. LITERATURE REVIEW AND CONCEPTUAL MODEL________________112.1 Co-designing___________________________________________________________________________11

2.1.1 Information systems: Websites_________________________________________________________112.1.2 Interaction systems: Toolkits___________________________________________________________13

2.2 Theoretical framework__________________________________________________________________152.2.1 Website attributes____________________________________________________________________162.2.2 Toolkit attributes____________________________________________________________________182.2.3 Process Satisfaction and Willingness to pay_______________________________________________222.2.4 The effect of moderators______________________________________________________________242.2.5 Conceptual framework________________________________________________________________30

PART III: RESEARCH METHODOLOGY____________________________________323.1 Data collection_________________________________________________________________________323.2 Measurement__________________________________________________________________________33PART IV: ANALYSIS AND RESULTS________________________________________354.1 Data preparation_______________________________________________________________________354.2 Analysis_______________________________________________________________________________354.3 Results________________________________________________________________________________38

Relationship between attributes and online process satisfaction_____________________________________38Relationship between satisfaction with co-designing process and willingness to pay____________________41The effect of the moderators________________________________________________________________43Summary of the results____________________________________________________________________49

PART V DISCUSSION & CONCLUSIONS_____________________________________515.1 General Conclusions____________________________________________________________________515.2 Managerial implications_________________________________________________________________525.3 Limitations & Future Research___________________________________________________________54REFERENCES_____________________________________________________________56APPENDICES_____________________________________________________________56Appendix A: Questionnaire__________________________________________________________________64Appendix B: Print screen Design Skins________________________________________________________68

4

Part I. INTRODUCTION

1.1 Mass customization and importance of online product co-design

The idea of integrating consumers into the design and production process is a promising

strategy that embraces both a closer reaction to the consumers’ need and efficiency. People

are different, different in the sentence that they have different lifestyles, needs, feelings or

thoughts. Every customer has a unique demand for products. To meet those differences of

consumer demands, firms invite them to cover their uniqueness through mass customization.

Mass customization relates to the ability to provide customized products or services through

flexible processes in high volumes and at significantly low costs.

There is a large amount of definitions and descriptions in the literature for the term of

mass customization. The concept has manifested in the late 1980s, by Davis (1987), who first

developed the idea as the ability to provide individually designed products and services to

every customer through high process agility, flexibility and integration, in this manner that the

5

perception may thus reach customers as in the mass market but also treat them individually.

Many authors propose similar concepts. Pine’s (1993) concept is more at a customer’s point

of view. According to Pine’s opinion customers don’t want choices; customers precisely

know what they want. The more recent definition of Piller and Muller (2004) is used in this

thesis. The authors describes mass customization as the production of goods and services for a

relative large market which meet exactly the needs of each individual with regard to certain

products characteristics, at costs nearly corresponding to those of standard produced goods.

Hence, through mass customization, customers are integrated into the design of a product by

configuring, choosing and matching their individual characteristics among several options

offered by the firm in a way that customers maximize the fulfillment of their needs and

preferences.

Co-designing is a unique principle of mass customization (Piller 2003). The foremost

belief of online product co-design is a mechanism for interacting with the customer and

obtaining specific information in order to identify and thereafter convert the customer’s needs

and requirements ending into a concrete product or service (Zipkin 2001). In general, co-

designing construe that consumers can express their product requirements and realize the

design process by mapping the requirements into the product (von Hippel 1998). With the

importance of co-designing, many firms in various industries have begun to offer their

customers the opportunity to design their own products online. In this way, customers can

partly design the product. Researchers such as, Prahalad and Ramaswamy (2000) and Vargo

and Lusch argue that value is set in the co-design process between the customer and the

supplier. This opportunity carries out that the customer shifts from being a passive audience to

an active player. In this way, the consumer is incorporated to the value creation of the

supplier.

Although, companies are getting increasingly aware of the fact that competition is

severe and the expansion of the internet is raising further up, which brings consumers with lot

of alternatives, this concept also leaves the firm not only to acquire new consumers but also to

sustain them by keeping the consumer satisfied. For example, a great number of companies,

like Adidas, Converse or Nike have shoes that fit their preferences through an online process.

Indeed like Nike, that allows customers with Nike ID to design their pair of shoes selecting

almost all the elements on an online developed interface. The same concept is also triggered

by Converse with Make Mine RED. Not only with the shoe industry, but also with the textile

industry is the same trend available. Customers can choice from different lettering on thirsts.

Furthermore, Lego allows customers to create their own Lego set online. From footwear to

6

clothes and even cars, like BMW are examples of companies which developed co-designing

process to provide their customers to create individualized products that meets their customers

better. Therefore firms are in the hunt for users in their activities by offering them toolkits for

innovation (von Hippel 2001). The primary idea of engaging users in such innovation

activities is that users have knowledge about their needs and the setting of use, so that they are

better equipped to develop products and services to match their needs. Firms, conversely,

design the solution space offered by the user toolkit for innovation in such a way that the

solutions developed by the users are producible by the firm.

In line with the online environment, having a successful website is a critical step into

the future and a necessary move to stay competitive in this fast moving world. Existing

evidence from research showed the importance of website attributes to consumers' online

shopping behavior, as well as certain attributes that help create demand for online purchasing

and increase store transactions and sales (Lohse & Spiller 1998; Swaminathan et al. 1999;

Zellweger 1997). A study notes especially that website attributes influence consumers' current

purchases and also future purchase intentions (Watchravesringkan & Shim 2003).

1.2 Research relevance

In an increasingly dynamics business environment, firms are realizing the importance of

collaboration for creating and sustaining competitive advantage. A company exists because it

aims to gain profit and the only source of such profit is the customers. All the sales activities,

production, and marketing plans have a common objective and that is to attract customers to

purchase their products or services in order to bring in money to the company.

For the last decades, companies have been soliciting the consumers input when

implementing the more personalized marketing strategies in order to provide products and

service that fit the consumers need. Understanding the needs of your customers will help a

company define and create new market opportunities that significantly contributes to revenue

growth in the organization. With the rapidly changing economy and dynamic technology,

customers also observe a rapid change in personal tastes and preferences. Customer

predictability is not as conventional as it used to be. A company must conduct regular market

research to be updated with the latest trends and consequently will be able to generate new

and broader marketing strategies needed in the various marketing programs. New product

creations can even be designed as an answer to changing customer needs. Nevertheless with

the arrival of a new century that traditional methods for research is enough, is hardly been

7

challenged. This new era of marketing, where consumer’s role is shifting from being a passive

spectator to an active player seems to be growing interest in the business world.

More recently, scholars in strategy and marketing have focused on collaboration with

customers to co-create value. The scholars argue that interaction that enables a consumer to

co-create experiences with the company is the key to unlocking new sources of competitive

advantage (Prahalad & Ramaswamy, 2004; Thomke & von Hippel, 2002). Merging this

concept with the rise of interest of companies of doing business thru the internet has made a

challenge as well easier as well more challenging.

1.2.1 The current study and the research questions

As we enter the twenty-first century, the marketing function remains concerned with

serving customers and consumers effectively. This new trend, integrating customers into the

co-design process is a great competitive advantage for firms that mostly apply mass

customization. The aim of the current study is to investigate in depth the impact of this

process through the website and toolkit attributes for the designed product. The study also

intends to extend the existing literature by exploring whether the product satisfaction derived

from the process and the outcome is significant enough to influence the Willingness to pay

(WTP). In summary, the main research question of this thesis is:

How does willingness to pay differ across different website or toolkit attribute levels?

Because of the large amount of the possibility to design online nowadays, it is very

interesting what kind website & toolkit attributes will affect the willingness to pay for the co-

designed product. There is a lot of literature about the effect of website attributes and using

toolkits on co-design process. Franke & Piller (2004) proved, in a case study regarding

watches, that the willingness to pay for self-designed product is higher than comparable

standard models in the same market. This allows the interpretation that subjects derive

benefits from the perceived uniqueness of the products. There is an untouched area in the

online environment about what will influence the willingness to pay for the co-created

product. In this sentence, this thesis will provide insights about which attributes, both website

and toolkit, are more affected the willingness to pay and if satisfaction moderates an

asymmetric affect. Although it seems very simple, co-designing is still a hardly touched area.

In the academic literature, attributes are investigated mostly in subjective studies and

describes this cases in a narrative style. These relationships have not been researched

efficiently and when encountered they are just suppositions or conjectures. Furthermore,

8

earlier studies mainly focus on firms implementing and using the attributes, not on users

interacting with them.

In order to investigate the impact of the co-design process on the willingness to pay, the

most important website and toolkit attributes had to be chosen. After a careful secondary

research on the literature, website attributes (design, navigability and transaction capability)

and toolkit attributes (complexity, enjoyment and control) are chosen. The following research

questions aim to underline the contribution of the present study to the mass customization

literature.

a. What is the impact of the website attributes on customer’s satisfaction with the mass

customization process?

b. What is the impact of the toolkit attributes on customer’s satisfaction with the mass

customization process?

c. How is customers’ Willingness to pay influenced by the website attributes, toolkit

attributes and the interaction of product satisfaction and transaction capability?

The conceptual model of the research and the methodology selected will be presented in

the following chapters.

1.3 Outline of the study

The first part of this study includes the first presentation of the topic for this thesis with

the main subjects and significance of the study included. Furthermore the structure of the

study is explored. The aim of the second part is to observe the existent literature and to

present the findings of the literature that has been used. Part two gives some general

information about the online co-design, how different website attributes affect this process in

turn to affect the willingness to pay of consumers with the moderating effect of the product

satisfaction. The same with toolkits attributes are explored. In the second part, the theoretical

framework used in this thesis and the hypotheses to be tested are discussed. The goal of the

third part is to clarify the research method to test the research model of the current study and

the research tools selected. The 4th part will report the data presentation. This includes the

statistical results and interpretations. The final part will discuss the conclusions resulting

from this study. Also the implications and limitations are included.

9

10

Part II. LITERATURE REVIEW AND CONCEPTUAL MODEL

The aim of a literature review is to review critical points of past literature relevant to

the online co-design concept and other relating constructs. The first part is a general review of

the elements that are used in this study. The second part includes, based on the literature of

the aforementioned concepts, the hypotheses of the current study and furthermore the

conceptual model will be presented.

2.1 Co-designing

The purpose of this section is to give a comprehensive description of the co-design

process and how customers integrate with it. Furthermore, the environment of this

involvement will be clarified by the presentation of the platform where this kind of

customization takes place. The presumption of this study will start at a visit on the given

website. After visiting the website, it is intended to create your own product. There will be an

interaction system on the website to start the co-creation process and design the product of

desires and unique style. After finalizing the product, the process continues with purchase the

product if there is overall satisfaction with the customized product. Then the use of the

website comes back in the spotlights. Although the consumer is constantly on the website, the

interaction system is overwhelming the thoughts of being on the website, but not using it

consciously. Thus the process of this study goes first with being on the website, then the use

of the interaction system and finalize with again being on the website. Although, this process,

the act, is just an appellation for the reader.

2.1.1 Information systems: Websites

The internet is an important market space in our millennium. The high level of

recorded interaction with customers allows for many ways to alter a website a customer’s

profile and increase sales or improve communication. Web sites are being widely deployed

commercially in the online environment; they can be conceptualized as information

repositories that represent organizational or individual sources, while also reflecting the

characteristics of those sources through design features of the sites themselves. Web sites play

an important role in the overall marketing communication mix (Berthon et al. 1996). They set

11

off direct selling activities, present supplemental material to consumers, project a corporate

image, and provide basic company information to customers.

For instance, Loiacono et al (2002) disputed that factors such as information quality,

response time, ease of understanding, visual appeal, ease of navigation, consistent image and

customer service are relevant when it comes to evaluating online environments. Nowadays,

websites evolving into an environment that caters for a range of activities like entertainment,

communicating and learning. According to Novak, Hoffmann & Yung (2000) and Wolfingar

& Gilly (2001) searching for specific activities is the result of direct needs of users. For

example, due to the internet, many online buyers can get information directly without having

to go through a sales person; Buying on the website gives consumers more perceived control

over the interaction.

Riemer and Tots (2001) note that process and web front-end design is crucial for mass

customization success, as the web interface is the initial point-of-contact in the mass

customization service value chain and therefore a critical success factor for mass

customization activities. From the customers perspective the web-based configuration

sequence is a critical part of the overall mass customization process and it shapes its quality

perception dramatically.

However just starting doing business on the internet does not necessarily guarantee the

competitive advantages. For example, easy access and the information available at websites is

an important but frequently underemphasized website design issue (Wolfingar & Gilly 2001).

Consumers see each website as a bundle of attributes with varying capacities to satisfy their

needs. Several researchers investigated consumer perceptions of websites quality (Barnes et

al. 2001; Song & Zinkhan 2003; Loiacono 2002). The overall assumption in these studies

seems to be that a website is a key instrument for communication and is primary interface for

Internet users. Overall, there is no specific study done about the impact of website attributes

on the willingness to pay for a co-designed product. There are some case-studies which

measure the influence of website attributes on certain products or services. In their research,

Oon & Kalid (2001) compared three mass customization websites. They showed that when

the availability of information on a certain website was too little, users had the highest

willingness to purchase the product. The amount of information on the website, which is a

website attribute, had influence on the purchasing process of the product. Customer

satisfaction is not only related to the quality of the customized product (Riemer and Totz

2001) but also to the quality of the web-based configuration process and interface, which

essentially determine the customers motivation and capability to adopt required configuration

12

tasks and to finally purchase the customized product.

2.1.2 Interaction systems: Toolkits

As mentioned before evolving customer into the co-designing process is a competent

way of serving individual customers both individually and efficiently. Piller (2004) explains

that the co-design process of products and services cover the demands of each individual

customer with regard to certain product features. All actions needed are executed within a

fixed solution space, characterized by stable but still flexible and responsive processes. Thus,

the customization costs permit pricing at a level that does not imply a switch in an upper

market segment. Piller and Moeslein (2002) emphasize how crucial the interface is between

the manufacturer and customer. It offers a solution space of the production facilities and the

design instrument for both new and existing customers. Moreover, the interface, as the

interaction system, has to contribute to the reduction of the additional transaction costs to the

customers connect with the co-design process. Through the interface the supplier has to

guarantee that the customers’ expenditure is kept as low as possible, while the gain he

receives has to be easily noticeable. Thus, these systems are instruments to reduce cost and to

create a design experience for the consumer.

Franke and Piller (2003) emphasizing the possibility to co-design with the help of

dedicated tools. These tools, also acknowledged as configurations, toolkits or co-design

platforms, are responsible for conducting consumers through the configuration process.

Whenever this system is quoted in the literature, it is often used in a technical sense that deals

with a software tool. However there is a broad variety of toolkits for customer driven product

development and configuration, there are simple configurations where users just allowed

choosing from different options (color, size, etc.), whereof Dell Computers is a good example.

On the other hand, there are also complicated ones, wherefore you need an expertise or

special training.

Although in such systems, the degree of innovativeness is to a certain extent limited.

On the other hand, there are toolkits that assign the user a much more active role. In this

context, the user actually creates, which allows for radical innovations. According to Von

Hippel and Katz (2002), toolkit for user innovation improves the ability of users to innovate

for them that fit their own needs better and at a lower cost. However many markets have

highly heterogeneity, the other way around should be noted that toolkits are not the

appropriate solution for all product development needs. They do allow a greater scope of

applying consumers’ needs in a more directly way. Though a comment on that a user must

13

have a need for something different that is strong enough to offset the cost of putting a toolkit

to use, otherwise the toolkit capability will simply lie unused in the background. With the use

of a toolkit, consumers are able to design their own unique product. Thus, companies have to

create new systems and interfaces if they want to move towards customer-driven strategies. A

lot of research found that the toolkit usage can lead to more willingness to pay for the product

than standard product (Von Hippel 2003).

Also explains Piller and Moeslein (2002) that adopting online product configurators, the

companies can outsource the time and costs consuming customization process to the

customer. A good example is the example of the customized Nike shoes, which cannot be sold

through traditional channels, as the co-design process would take much long in a store to

justify 10 dollars of premium, like every product with a small margin.

The term “configurator” is often addressing a software tool. The definition of ‘toolkit’,

proposed by Von Hippel (2001) will be used in this study in order to define the concept of co-

design. Von Hippel (2001) proposes that an effective toolkit will carry out five important

objectives. First, it will fulfill complete cycles of trial and error learning, which means the

consumer move through the steps of build and evaluate. When the consumers are not satisfied

start over and learn about their needs of the co-designed product. This repeating called

learning by doing guides to the best results. Second, the toolkit will offer a ‘solution space’

that encompasses the design they want to create. Third, the toolkit will be user friendly, in

other words users will not need specific training to use them. Fourth, the toolkit allows

libraries of commonly used modules that the user can integrate into the custom design, in a

way to focus on the design efforts and the uniqueness elements of that design. Fifth, properly

designed toolkit will ensure that co-designed product will be producible without requiring

revisions by manufacture-based engineers. In other words, the toolkit must be convertible

without error into the translating of the user designs for production; otherwise the entire

purpose of the toolkit is lost.

According to Johan Fuller and Kurt Matzler (2007), a crucial factor for the success of

mass customization tools is the user satisfaction. Customer satisfaction (CS) has become a

vital concept in marketing and is central to many definitions (Cathy Parker, Brian P.

Mathews; 2001). Satisfaction is a major outcome of marketing activity and serves to link

processes culminating in purchase and consumption with post purchase phenomena such as

attitude change, repeat purchase and brand loyalty (an investigation into the determinants of

customer satisfaction). Anderson et al. (1994) explain in their paper that in the past, at

managerial level there was trust in the intuitive sense that higher CS would lead to improved

14

company performance. In that sentence, that consequently companies began to implement

programs for measuring and improving CS. Widespread acceptance of this relationship is

evidence in the growing popular literature and CS, indeed the increasing number of consulting

and marketing research firms that promise to improve a customers’ ability to satisfy

customers and perhaps, most persuasively from a customer-oriented perspective, actually to

respond to the specific needs of the customers’ requirements.

By gaining an understanding of what consumers value and are satisfied with, companies

might be able to adapt or change their overall strategies when communicating and engaging in

a co-designing process with consumers. One of the most applied theories, underlying the

concept of customer satisfaction, is the Expectancy –Disconfirmation theory proposed by

Lewin (1938). According to this theory, consumers have expectations regarding products and

services prior to consumption. If the consumers’ perceptions regarding a certain product or

service exceed their expectations, this would result into consumers being satisfied with the

experience, ultimately influencing their behavioural intentions in a positive way (Carpenter

2008; Tse & Peter 1988). Also Hunt (1977) described satisfaction as being an evaluation of

emotion, suggesting that satisfaction in essence reflects the degree to which consumers

believe that a given product or service evokes positive feelings (Rust & Oliver 1994). Oliver

also concurs with this notion and defined satisfaction as being a pleasant experience derived

from a product or service given the expectations of the consumer. (Oliver 1977; Oliver 1980

& Oliver 1996).

2.2 Theoretical framework

This section refers to the elements selected to be tested in this study in relation with the

co-design process. The first part includes the most interesting website attributes, following by

the most important attributes of the toolkit. Based on the literature, these attributes were the

most important. Hence, it should be noted that the chosen attributes are not the only ones.

Based on this study, by gaining an in-depth understanding of what consumers’ value and are

satisfied with, while co creating, these attributes are chosen. Both are connected with

reference to satisfaction, regarding the process and the impact on willingness to pay (WTP) is

discussed and related to previous notions. In essence, there is a distinction made on the

functional and experimental use of the attributes. Based on the relevant literature, the

hypotheses that are going to be researched are also presented in this section.

15

2.2.1 Website attributes

With the fast development and increasing use of the World Wide Web, the ability to

create and manage websites that fulfill one or more needs of users will become a essential

factor for successful e-business. To a certain extent, a website may be regarded as a Computer

application involving interactions with a computer environment. User experiences are heavily

relied on the information published on the website, as well as the quality of the systems

(DeLone and McLean 2003, McKinney et al. 2002).

Attributes are features or aspects of a website. From a user perspective, the website is a

bundle of attributes with different capacities to satisfy their needs. Users use and look for

different web attributes depending on their needs (Singh & Dalal; 1999). These attributes can

be technology-orientated, like the structural properties of a site such as hyperlink multimedia

modalities or they can be user oriented, moreover the qualitative experience of users like the

navigability and demonstrability. Previous literature show generally key attributes of online

customer satisfaction. The primarily assumption in these studies were that positive or negative

attribute performance would have similar impact on the customers satisfaction. Otherwise

other studies demonstrated that the negative performance will have a greater impact on

satisfaction than the positive performance. Indeed, consumers can switch brand or leave the

internet retailer with a single ‘click’.

Hence there is some distinction to make between two kinds of customer value, namely

the utilitarian and the hedonic value. In the most recent marketing literature, the utilitarian

value is based on the functional and the hedonic value is based on the experimental value of

customers (Holbrook 1994; Duman & Matilla 2005). In essence, research has shown that

consumers general attitude towards a product, service or a certain activity generally integrates

both a hedonic and utilitarian dimension (Spangenberg, Voss & Cowley 1997; Voss et al

2003). Regarding to the online environments, several researchers have concluded that the

hedonic aspect as well as the utilitarian aspect have an influence on the online behavior of

consumers, which is consulting in, that while consumers are driven to engage in an online

environment based on the instrumental aspect or utilitarian value derived from the experience,

the hedonic aspect plays at least an equal role in their decision making. (Childers et al. 2001).

In addition, Liu & Arnett (2000) vindicates, while the utilitarian aspect of online

environments is of great importance, the hedonic pleasures is of equal relevance in order to

motivate consumers participation and in the end the satisfaction.

Consumers experience utilitarian value when their task related needs and desires are

fulfilled. Utilitarian value is described as instrumental and extrinsic (Holbrook 1999;

16

Holbrook & Hirschman 1982). In particular, Huang (2005) argued that the utilitarian value of

a given website is defined by users evaluation of the benefits derived from the functional

attributes. Opposite to utilitarian value, the hedonic value is what consumers want to sense,

feel, think act and relate (Holbrook 1999). Hedonic value can be defined as being subjective

and experiential, such as feeling of fun and playfulness (Holbrook & Hirschman 1982; 1986).

Web design

Web design refers to the way in which content of the web site is presented to the

customers (Ranganathan and Grandon, 2005). In a B2C (business to consumer) setting the

web site design plays an important role in attracting, sustaining and retaining the interest of a

consumer. The design of the web site is as important as its content and it has been studied in

diverse contexts. For example, Loiacono (2002) find out that that pleasant atmosphere, as

visual as well emotional appealing, encourages consumers to continue browsing and revisiting

the website. Elements involved in designing a website such as background colors, fonts,

graphics and styles become more important to provide improved consumer experience.

In an online shopping area, academics investigated that online shoppers are aware of

some of the discouraging features of online shopping, but these features do not deter them

from shopping online. Hence, by online shopping, the implication for marketers is that they

should focus on making the experience of online shopping more accommodating and more

user-friendly since the positive features of online shopping ("convenience" and "efficiency")

appear to be more important than the negative features ("effort/impersonality”).

Szymanski and Hise (2000) outlined that convenience and site design are among the

major factors that determined customer satisfaction. This notion is also supported by Barnes

and Vidgen (2000), who pointed out that visual appeal of a web site, is a vital attribute for the

consumer satisfaction. According to Constantinides et al. (2009) consumers’ virtual

impression and actions are influenced by design, atmosphere and other elements experienced

during interaction with a given website, which meant to induce customer’s goodwill and

affect the final outcome of the online interaction. Hence, factors contributing to the

consumers’ perceived hedonic value are the level of entertainment and exploration consumers

get to experience. In other words, a good web design will heighten the consumer’s

satisfaction and experience in a positive manner, which leads to the following hypothesis.

Hypothesis 1:

a. Evaluated web design has a positive effect on the process satisfaction

17

Navigability

Given that the Web is a navigational system, it is necessary for consumers to be

provided with navigational support. According to Nielson (2000), navigation interface needs

to answer three basic questions: Where am I? Where have I been? And where can I go? No

matter how the navigation interface is designed, the website should be built on clear structure.

According to the initial conceptualizing of the Technology Acceptance Model (TAM), a

person’s attitude towards using a new technology depends on their perceived usefulness and

ease of use when using the technology in question. While perceived usefulness refers to

consumers perceptions concerning the result of a given experience, the ease of use refers to

their perceptions regarding the process leading to the final result (Davis 1989).

Thus, a key challenge in building a usable web site is to create good links and

navigation mechanism (Radosevich, 1997). In their study, Nah and Davis (2002) highlighted

that navigation in an important element in building a usable website with good links and

navigation mechanisms. This is also supported by Evans and King (1999) who suggested that

organized and easy-to-navigate pages should be a primary consideration of a good web site.

When websites are fast and easy to navigate, consumers experience with the given website

will be high en therefore the consumers will be satisfied. On the other side, difficulties with

navigating a given web site results in dissatisfaction and subsequently hack into the process

with the website and switching of online environment (Palmer 2002, Katerattanakul, 2002).

In addition, in studies done about online shopping, Oon & Khalid (2001, 2003) showed by

comparing three sites that the one of the websites were found significantly flexible to navigate

in comparison to the other websites and had the highest willingness to purchase the product.

In the area of online co-creation, there will be a positive influence of navigability if

consumers perceived the web site as easy to navigate and having a good structure (Evans and

King 1999, Zeithaml et al 2000), which allows to the next hypothesis.

Hypothesis 1:

b. Website navigability has a positive effect on the process satisfaction

2.2.2 Toolkit attributesIn an online mass customization system, the physical store is replaced by the toolkit.

Such displacement has to convey experience and meet the high customer expectations

connected with customization. This goes hand in hand with the demand for a steady quality of

18

service. More essential is the fact that in mass customization the individual product is the

direct result of the process. Von Hippel and Katz (2002) note that toolkits for user innovation

are most effective and successful when toolkits are made user friendly. As already mentioned

in the previous section, Von Hippel (2001) supports that the toolkit should enable five

objectives in order to be effective, whereof user friendly is one of them. Accordingly, it has to

enable users to carry out complete circles of trial and error earning, to offer them a solutions

space that cover up the designs they want to create, to be “user friendly”, to provide common

used modules that the user can incorporate into his/her custom design and to guarantee that

the output will be producible. Dellaert and Dabholkar (2009) refer to three other attributes

that act as antecedents for consumer intentions to use mass customization; (perceived)

complexity, (perceived) enjoyment and (perceived) control.

Complexity

The “complexity” constructs used by Dellaert and Dabholkar (2009) can be compared

with the opposite meaning of the ease-of-use according to Von Hippel (2001). Complexity

refers to the customers awareness of how complicated it is to use on-line mass customization.

They consider it as the only perceived cost-related with the online mass customization process

and therefore support that increased complexity negatively affect the intention to use this

process as it has a negative effect on the utility of the co-created outcome. They also point up

that it is only accepted by customers in the case where the customization process gives a

customized product that is regarded of higher utility, in such a way that the process should

worth the attempting to finalize it. If this is not the case, consumers will be not satisfied. In

essence, we can state that the complexity aspect of the toolkit is related to the perceived

utilitarian value.

In an experimental study Kamali and Loker (2002) observe the involvement of

consumers who designed a T-shirt using a toolkit. The outcomes of this study leads to a

general interest in designing online as well as higher satisfaction with the toolkit as

involvement increased. Consequently they found out that the higher level of interactivity also

increases the consumers’ willingness to purchase. Dellaert and Stremersch (2003) study

consumer interaction with a design toolkit for personal computers. Their findings were that

there is a trade-off between the utility of a customized products and process complexity as

perceived by the user. If the perceived complexity is high, perceived product utility decreases.

Although, this study also point to the fact that the toolkit used appeal more to expert

consumers. In a more recent study Dellaert and Stremerch (2005) linked complexity with

19

product utility, process utility and customers intention to use customization using four

customization configurations and found out there is a negative relationship among the

complexity of the configuration and product utility.

From a customer’s perspective mass customization may lead to complexity. More

customization does not necessary mean greater delight and therefore greater value for the

customer. According to Dellaert and Stremersch (2005) customer satisfaction may not only

appear after a certain customization level of the product, but also decrease because of the

frustration a customer feels due the excessive choice of options and variety. Consumers will

be confused if there is excessive variety of options to choose from and a lot of information to

deal with. Moreover, the variety of options and information is one of the most important

characteristics of mass customization to facilitate the customers the opportunity to completely

design their requirements and lead in their ideal solution. Therefore the next hypothesis is

constructed;

Hypothesis 2:

a. Perceived complexity of the toolkit attribute has a negative effect on the process

satisfaction

Enjoyment

The experience and the pleasure of using online mass customization are defined by

Dellaert and Dabholkar (2009) as enjoyment. Studies on self-service technologies exposed

that customers prefer an active role in the production or service due to the fact of the

enjoyment they derive from it (Dabholkar and Bagozzi 2002, Dabholkar 1996). Schreier

(2006) construed enjoyment as a result of the participation in an attractive technology-based

experience of the excitement and pride of constructing an ideal product. Next to the role of

complexity for using a toolkit, there is empirical evidence regarding the importance of the role

of intrinsic motivation for online shopping (Venkatesh and Speier, 1999, 2000). Intrinsic

motivation is a vital aspect for consumers evaluation of his/her experience of the online

shopping process. Focusing on the online buying experience, Dabholkar and Bagozzi (2002)

confirm that customers’ willingness to purchase a product is positively influenced by their

perception of enjoyment they had gone through. Monsuwe et al. (2004) defined “enjoyment”

as the fun and playfulness of the online shopping experience rather than from shopping task

completion. Thus, persistent to the toolkit, enjoyment reflects consumers’ perceptions

regarding the potential entertainment of using the toolkit. According to a more recent addition

20

to the TAM is the enjoyment construct, which is also believed to contribute to the acceptance

of new technology (Davis et al 1992). Whereas ‘usefulness’ and ‘ease of use’ reflects the

utilitarian aspects, ‘enjoyment’ embodies the hedonic aspect.

A toolkit’s success is significantly correlated with that toolkits quality and with the

industry conditions. Prigl and Franke (2005) studied the success of 100 toolkits offered in

computer gaming and find out that success was significantly affected by the quality of the trial

and error learning enabled by a toolkit, by the quality of fit of the solution space and by the

quality of module libraries. Thereby, Schreier and Franke (2004) also hold on the importance

of the toolkit quality that was customized with a simple toolkit. The study was focused on the

value that users placed on particular goods like t-shirts and cell phone covers. Their

foundations, measured by Vickrey auctions, was that willingness to pay for a custom designs

significantly affected by the difficulty of designing with a toolkit. In contrast, the willingness

to pay was significantly positively affected by enjoyment experienced in using a toolkit.

Enjoyment in online mass customization approaches as a result of the participation in an

attractive technology-based experience and of the excitement and pride of composing one’s

supreme product (Schreier, 2006).

Hypothesis 2:

b. Perceived enjoyment from the toolkit has a positive effect on the process satisfaction

Control

According to Wind and Rangaswamy (2001) mass customization is a buyer-centric

strategy where the locus of control resides with the individual customer. In this sentence the

success of mass customization depends strongly on efficient and effective manufacturer-

customer interaction. The toolkit enables to fulfill these tasks. In a mass customization setting

a consumer completes the entire design task in an autonomous and controllable way, with

choice and discretion and gets instant feedback from the toolkit through trial and error (Von

Hippel, 2001). Practically, these toolkits are very heterogeneous in terms of what a customer

can do and how he can do. An effective toolkit supports an appropriate solution space. This

solution space may vary from very large to small, and if the output tied to a particular

production system, the design freedom that a toolkit can offer a user will be accordingly large

or small. For example, Mi adidas provides consumer to design a shoe from the basics, while

NikeID allows the consumers to design the shoe within specific product attributes. Thus,

making choices from lists of options regarding such things like product attributes refers to a

21

small solution space. Research in this range of option available, shows that consumers

perceptions of control increases if they are given a choice of alternatives, rather than assigned

to a given alternative. This notion of solution space more or less bargain with the term

perceived control defined by Delleaart and Dabholkbar (2009). They express control as “the

extent to which consumers believe they are able to determine the outcome of the mass

customization process”. They found out that when customers experience is uncertain during

the process, then consumers feel lowered their control and consequently could be a crucial

factor that prevents them for using mass customized interaction systems. In a similar way, the

decision to make or not to make a transaction is under the consumers control and this control

results in an advantage of online shopping for consumers (Wolfinbarger, 2001). Applied to

the e-commerce, control illustrates consumers’ perceptions whether getting information and

purchasing products online is totally up to the consumer itself, because of the availability of

resources and opportunities. Therefore we hypothesize that:

Hypothesis 2:

c. Perceived control of the toolkit has a positive effect on the process satisfaction

2.2.3 Process Satisfaction and Willingness to pay

User satisfaction is a critical factor for the success of the principle of mass

customization. Jonhnson & Gustofson (2000) confirms the importance of user satisfaction and

discuss that only consumers who have a particular level of satisfaction with the toolkit will

finalize the design process and consequently considering purchasing the product, with the

notion always assuming that the satisfaction with the product designed is sufficiently high. In

the literature, different academicians have their own understanding of satisfaction. For

example, Chiou et al. (2002) examined the construct of satisfaction from the perspective of an

aggregation of transaction experiences. Oliver (1999) defines it as perception of pleasurable

fulfillment. Therefore the interactive nature of the Internet is a key attraction to building a

relationship with customers (Hoffman et al. 1995). Moreover, the informative systems are

important when it comes to satisfaction of the consumers in an online environment. In their

experiment with online environments in clothing design, Kamali and Looker (2002) showed a

significant increase of satisfaction with the navigability and usability of the Web site interface

when the design involvement was introduced. Jayawardhena and Foley (2000) share the same

22

vision as Nah and Davis (2002) about that the navigability plays an important role in whether

consumers are satisfied or not with their online experience. According to Madu and Madu

(2002) users become dissatisfied if the navigability of the website is difficult. In an indirect

way this also guides to dissatisfy with the process of online co-creation.

According to several researchers and practioners, the web design, is essential for

enhancing experience. In essence, the visual appeal of a website is considered to be a vital

factor when it comes to enhancing customer satisfaction (Ha and Litman 1997; Barnes and

Vidgen 2000).

A crucial aspect of a website towards the WTP is moreover the transaction capability

of a given website. Also mentioned before, according to Pelpls et al. (2001) who pointed out

that privacy concerns are negatively related to purchase behavior and decision, which is also

supporting by Bellman et al. (1991), who found evidence supporting that consumers concerns

about payment security mediate the relationship attitude toward shopping online and therefore

actual purchasing. Consequently, we should expect that this same argument is applicable to

the WTP. However, findings of past research about the relationship between satisfaction and

WTP are equivocal. While some researchers provide evidence of a significant positive

relationship, there are others who find no direct relationship between these constructs.

This theory can be applied in a similar way for the interactive systems. According to

Piller and Moeslein (2003), the design of a toolkit, which enables customer interaction with

the interface, influences the buying decision and customer satisfaction. They conclude that

only consumers that use the toolkit and who have experienced a certain level of satisfaction

with the customization process are probable to complete it and to finally purchase the co-

designed product. In other words we can say that customer satisfaction is an element which

can possibly be improved because of the individualization of product features to customer

requirements.

Franke and Piller (2003) presented an equation that represents customer decision

making process for customized products. Only in the case that the expected returns exceed the

expected costs, mass customization will be employed. According to those academicians, these

returns have two dimensions. One is the rewards from the unique shopping experience, as

satisfaction with the fulfillment of a co-design task (Dellaert and Stremersch 2003), and the

other one is the increment of utility from the better fitting to specific needs of a co-designed

product, in other words, the value of product customization.

In online product co-design, the interaction bonds the experience and customer

expectations with the customization process. Companies that provide customers with

23

customization toolkits have to take care of the trust and reliability customers perceive in order

to reduce the perceived risk and offer them an enjoyable and wonderful experience, which is

offering customers not just a product but a solution capability (Tseng and Piller, 2003).

According to Riemer & Totz (2001) the satisfaction with the process has a large impact with

the product, while mass customizing. Since the customized product is a direct result of the co-

creation process, it is to be expected that the value of the experience has an impact on the

product value (Dellaert & Stremersch 2005, Franke & Piller 2003). In summary, a successful

configuration process will therefore have an impact on both process and product satisfaction.

Willingness to pay, as a measurement, is connected with satisfaction in the current literature

in both offline and online shopping environments and recently also in the mass customization

environment. This study will test the nature of this relationship based on a specific existing

co-design website and to examine it in depth after consumer’s experience the process

satisfaction.

Hypothesis 3:

Satisfaction with the process will have a positive effect on WTP for the customized product.

2.2.4 The effect of moderators

Concerning the experience during the co-designing process, several authors have

argued about prospective downsides of consumers’ integration into the value creation process.

The most argued downside is the information overload, although several appearances can be

given for this appellation. For example, mass confusion can be a type of information overload.

Mass confusion describes the incapability dealing with large numbers of choice decisions to

be made during the co-designing process (Huffman and Kahn, 1998). In their study, Huffman

and Kahn (1998) provide consumers to preference rating for different levels of a single

attribute. They conclude that an attribute-based decision leads to higher CS than alternative-

based attributes. Dealing with choices during the co-designing process is also closely related

to another sample of information overload, namely the incapability to match needs or desires

with the product attributes. Although, consumers have a clear understanding of their own

desires, they might not be able to choose the best solution. (Thomke and von Hippel, 2002)

This argument shows that the customization process cannot be separated from the customized

product. The close relationship between the co-designing process and product is also been

supported by Riemer and Totz (2003), who stated that satisfaction with the co-designing

24

process impacts product satisfaction. In similarity, this can be seen in research showing that

customers’ perceptions of retail environments can have an influence on buying behavior

(Mattila and Wirtz, 2001), which is closely related to the WTP. This part portrays the effects

of product satisfaction and transaction capability on the WTP.

In the past, many executives trusted their instinctive that higher CS would lead to

improved company performance. According to much academician, consumer satisfaction

becomes an important focus of corporate strategy. Oliver (1997) defined satisfaction as “the

summary psychological state resulting when the emotion surrounding disconfirmed

expectations is coupled with a consumer’s prior feelings about the consumer experience.” It is

a “perception of pleasurable fulfillment” in the customer’s transaction experiences. Hence,

customer’s satisfaction is certainly an important factor for mass customization in order to be

successful. The process itself might be a source of subjective value. It is likely that users

enjoy the design process due to a "flow" experience (Csikszentmihalyi 1996) and the joy of

performing an artistic and creative act. Riemer and Totz (2001) argue that customer

satisfaction is not only related to the quality of the customized product itself but as well to the

quality or the web- based configuration process and interface, which essentially determine the

customer’s motivation and capability to adopt required configuration task and finally

purchase the product. Therefore, the active role of designing the product is likely to represent

a psychological benefit to users.

In addition to the process, the output of this customization process might also be of high

value. The self-designed product is unique and it has been found that people assign greater

value to products that are unique than the standard products, with keeping the objective value

being equal (Brock 1968; Fournier 1991). In a similar way, this is also supported in empirical

studies conducted by Franke and Piller (2004) and Schreier (2006), who suggest that the users

intention to pay for self-designed products can be much higher than in case of the standard

products. Besides, Kamali and Loker (2002) found that customers’ satisfaction with the co-

design leads to high levels of intention to purchase the product that they designed. Therefore,

satisfaction with the configuration process and the resulting outcome will determine

customers’ decision whether to buy the customized product or not.

Moreover, the interaction between user and the use of the online customization can be

easier than the alternative costly interaction between the manufacturer and the user in the

process of market research. Most notable, the information obtained by the help of this online

co-creation is located at individual level. Then, the manufacturer can produce and deliver a

25

product to suit the individual user. The resulting fit between the preferences and the product

itself should yield a higher level of satisfaction with the created product and subsequently

increase the customers’ willingness to pay. From the same viewpoint, focused on toolkits,

Franke and von Hippel (2003) show in an empirical study on Apache’s software, that users

definitely have unique needs, leaving many displayed with standard products. They also

exposed that users claimed that they are willing to pay a substantial premium for

improvements which satisfy their individual needs. This relationship is important because

price is directly linked to profitability. Furthermore, the general belief that satisfied customers

are willing to pay higher prices is typically based on anecdotal evidence (Finkelman 1993;

Reichheld and Sasser 1990). However, based on the abovementioned arguments, product

satisfaction will have a positive effect on the willingness to pay and therefore the following

hypothesis is formed:

Hypothesis 4:

a. Product satisfaction has a positively effect on WTP.

b. The effect of process satisfaction on WTP is higher, the higher the product satisfaction

is.

Nowadays, the internet is a hot medium and e-commerce allows consumers for

changing the way of purchasing goods and services. When the website and internet

technologies become more established, the consideration is turning to the factors that

influence the accomplishment of websites. Yamada (2001) explains how new opportunities

for customers participation on apparel websites have expanded from catalog-like offerings to

interactive offerings. When it comes to the economic profitability of the business, is the

question of whether, based on a consumers’ reaction to a web site, that person is likely make a

purchase from the web site. A key element among the economic profitability of the business

is trust (Cheskin Research and Studio Archetype/Sapient, 1999; Jarvenpaa et al., 1999;

Marcella, 1999; Sisson, 2000). This notion is also shared by many website designers,

developers, consultants and marketers, who stated that the present of trust in website

interactions is crucial to the vital success of the interaction between the consumer and the

firm. The prominence of trust in the online world is acknowledged, but there is limited

theoretical support for its role in online interactions. However, it is not obvious that all forms

of trust can be understood in one definition. Therefore, this study restricts its definition of this

section to a bundle of separate terms. The term transaction capability is used to refer to the

26

underlying features of security/privacy, trust and payment mechanism. The website offers this

attribute as having features of both a salesperson and a storefront in the offline world. Since

transactions on the internet occur without personal contact, consumers are generally

concerned with legitimacy of the vendor and authenticity of products or services (Chen and

Dhillon, 2002). Trust focuses on consumer confidence in the website as part of a buyer-seller

transactional exchange, and consumer’s “willingness to rely on the seller and take actions in

circumstances where such action makes the consumer vulnerable to the seller” (Jarvenpaa et

al., 1999).

Another key consumer concern is privacy. Online merchants gather consumers’

information in various ways such as registration and cookie files. According to Hoffman et al.

(1999), almost 95% of Web users have declined to provide personal information to Web sites

at one time or another when asked. In brief, e-consumers are lacking in trust, which is a

broadly defined subject. That lack of trust is one of the most frequently cited reasons for

consumers not purchasing from Internet vendors is also supported by Grabner-Krauter and

Kaluscha (2003).

Theoretical studies have explored technologies and mechanism used online to promote

trust like usage of third parties (van den Berg & van Liehout, 2001). Tan and Thoen

(2000/2001) presented in their study a generic model of trust that consist of the trust in the

other party and the trust in the control mechanism used to make certain the transaction is

successful. A study of internet consumers by Cheskin Research and Studio (1999) identified

that six dimensions that contribute to feelings of trust in e-commerce sites; navigation,

presentation, ease of use, seals of third parties, company reputation and effective technology.

Given the absence of physical experience and contact, trust may be important in the online

buying experience. In line with the commercially use of a web site, online customers have

been reluctant to buy online due their distrust of the security of online shopping (Hoffman, et

al. 1999). This is also in line to Pelpls et al. (2001) who pointed out that privacy concerns are

negatively related to purchase behavior and decision. This is also supported by Bellman

Johnson and Lohse (1991), who found evidence that consumers’ concerns about payment

security can mediate the relationship between attitude toward shopping online and the actual

purchase. Trust levels may therefore affect shopper’s willingness to buy, willingness to pay

and their willingness to return to the site (Hoffmann 1999). These findings related that trust is

in general consistent with transactional capability.

Consumers are likely to engage in relational behavior to achieve greater efficiency in

their decision making and to reduce the perceived risks associated with future choices (Seth &

27

Parvatiyar 1995). In the online co-design process the consumer creates, while not thinking to

the transaction capability. This will appear in the final step when the consumer decides to

actual buy or to ask to the WTP for the created product, also called the purchase stage.

According to Hosmer (1995) consumers make important buying decisions, in part, on their

level of trust in the product, salesperson, and the company. Back to the purpose of

customization, consumers design online due unique needs with the intention to purchase the

self-designed product. The making of the decision to purchase the product moves along the

traits of shopping online.

Correspondingly, decisions made by internet shopping involve trust, not only between

the company and the consumer, but also between the consumer and the computer system,

where transaction are executed (Lee and Urban, 2001). Many researchers and academician

point the critical role of trust in online environments, especially the aspect of transaction

capability for finalize a buying decision. According to Gefan (2000) consumers are also

concerned about the online payment security, reliability and privacy policy of the online store.

For example, security of monetary transaction, which is a key customer concern, influences

the quality of a web site. Almost 50 % of the transactions rated as unsatisfactory consist of

concerns about security of transactions (Elliot and Fowell 2000). Hoffman (1999) confirms

this concern with the notion that consumers fear the process of typing over credit card

information to e-tailers.

Therefore, security is a critical factor in online shopping and also suggested be critical

by purchasing when co-designing online. Although, this can be divided into concerns about

data and transaction security (Ratnasingham, 1998; Rowley 1996). Security involves

protecting users from the risk of fraud and financial loss from the use of their credit card or

other financial information. Security risk perceptions have been shown to have a strong

impact on attitude toward use of online financial services (Montoya-Weiss et al. 2000).

Bhatnagar et al. (2000) explain that the risk appropriate to shopping on the internet occurs

since consumers are concerned about the security of transmitting credit card information over

the internet. A number of online merchants offer alternative payment methods such as

telephone transaction or e-checks to overcome consumers’ fears. New technological

advancements for Internet security, like digital signatures and certificate, reduce consumers’

perception of risk related to the transaction in online shopping. Privacy statements and

security policy are represented and explained in fulfillment policy. Consumers perceive the

privacy and security depending on the extent to which fulfillment service is provided on the

28

Web. For example, consumers check the order procedure or use customer support service to

assure whether the site supports secure transaction process.

A similar dimensional distinction can be made about the satisfaction for the

transactional capability for a given web site. Szymanski and Hise (2000) investigated

consumers’ satisfaction with internet shopping, and found that greater satisfaction with online

shopping is positively correlated with consumer perceptions of the convenience, product

offerings, product information, site design and financial security of an online store relative to

traditional store. Hence, based on the arguments made on the critical role, consumers’

perception of transactional capability could influence their satisfaction with online co-

designing. Similarly the transaction capability may therefore also affect the WTP. Hence, by

mass customization, the online experience is a critical factor for completing the process and

the ability of a merchant is reflected in its ability to handle sales transactions and the expertise

to generally conduct business online. Findings of past research and recent studies support also

the notion that there is a positive relationship between consumer satisfaction and financial

performance (Anderson et al. 1997; Reichheld and Sasser 1990; Rust and Zahorik 1993).

When consumers experience superior states of satisfaction, they perceive a high outcome of a

trade and therefore are willing to pay more than less satisfied consumers, because this results

in an reasonable relation of outcome to input. In online product co-design, intensive

interactions take part to connect the experience and customer expectations with the

customization process. Companies that provide websites have to take care of the trust and

reliability customers perceive in order to reduce the perceived risk. Also in arrangement with

the purchase stage of online consumers, privacy/security, payment mechanism, speed of

operations may affect the satisfaction. Compared with the traditional economy, the online

economy is more aware of the need for privacy/security (Friedman et al. 2000, Culnan 1999).

This lack of trust, privacy and security concerns often lead to lost sales. Therefore, if

improving the transaction capability and design a secure and convenient payment mechanism,

it will raise the consumers’ degree of satisfaction. According to the prior research (Elliot and

Fowell, 2000; Szymanski and Hise, 2000), the transactional capability as perception of

security risk, privacy concerns and lack in trust, is expected to have a negative effect on the

process.

However, there is no specific research done about the effect of transactional capability

on process satisfaction in an online mass customization setting. In this study transactional

capability will be examined as a mediator towards the WTP. Thus, the expectation arise that

transaction capability, as a website attribute, will moderate the relationship between

29

Web site attributes

Toolkit attributes

Product Satisfaction

Process SatisfactionWillingness to Pay

Web design 1a

Navigability 1b

Transanction Capability

Complexity 2a

Enjoyment 2b

Control 2c

H1

H2

H3

H4a

H4b

H5a

H5b

Figure 1: Conceptual model

consumers’ satisfaction with the co-design process and the willingness to pay in a negative

way. Along with the aforementioned arguments about the effect of security, privacy and trust

in this section, the following hypothesis is formed;

Hypothesis 5:

a. The higher satisfaction with the transaction capability, the higher the WTP will be.

b. The effect of process satisfaction on the WTP is higher when the satisfaction of

transactional capability is high.

2.2.5 Conceptual framework

In this section, the theoretical framework of this current study will be illustrated. It should be

marked from the literature review that the past studies founded a great variety of factors that

affect the customers’ evaluation of the co-design process. Also discussed in the previous

parts, only some of them were selected.

Figure 1 represents the

conceptual model that is used as a guideline for the present study. It captures the elements that

are expected to influence satisfaction after a co-design experience and intention to say

positive things about it. It includes the hypotheses that were formed in the previous section

30

and are summarized in the following table. The following table summarizes the formed

hypotheses in order to facilitate the reading of the study.

Table 1: Summary of HypothesesHypothesis 1:

a. Website navigability has a positive effect on the process satisfactionb. Web design has a positive effect on the process satisfaction

Hypothesis 2:a. Perceived complexity of the toolkit attribute has a negative effect on the process

satisfaction b. Perceived enjoyment from the toolkit has a positive effect on the process

satisfaction c. Perceived control of the toolkit has a positive effect on the process satisfaction

Hypothesis 3:Satisfaction with the process has a positive effect on WTP for the customized product.

Hypothesis 4:a. Product satisfaction has a positively effect on WTP.b. The effect of process satisfaction on WTP is higher, the higher the product

satisfaction is.

Hypothesis 5:a. The higher satisfaction with the transaction capability, the higher the WTP will be.b. The effect of process satisfaction on the WTP is higher when the satisfaction of

transactional capability is high.

31

Part III: RESEARCH METHODOLOGY

The aim of this part is to clarify the research method to test the research model of the

current study and the research tools selected. The data collection will provide insight how the

survey was conducted, in order to test the relationship among the constructs included in the

conceptual framework. Moreover, the website, chosen for this current study, is discussed and

the process that users will follow for designing their own design skin is explained. The second

section talks about the survey tool and the questionnaire, where the measurement chosen for

the research is discussed.

3.1 Data collection

In this study, the questionnaire was designed online using the software tool, Qualtrics

(www.Qualtrics.com). This software gives the opportunity to design questionnaires and then

distribute it though Internet. The reason for an online survey is that it is an efficient manner to

gain information about consumers’ participation. It has also an advantage for the consumer,

because he/she can fill it in when they’ve got the time. Also, an online survey can reduce

survey cost and time, and eliminate geographical limit (Dillman, 2000).

Thereafter, the link to the survey was sent to the participants by email, whereby this

method indicates that the sample needed to have internet access. Prior to the choice of a

website, several companies that at the moment providing the possibility for consumers to co-

design their own products online were considered for the present research. Within thought

that having a Smartphone is very popular nowadays, creating a skin for your smartphone

seemed to fulfill these conditions. Although mass customization has been researched in

previous studies through scenarios that describe a co-design process or through shopping

stimulations as research stimuli, the use of an existing online co-design environment was

preferred, a method used in past surveys as well. Therefore, the participants were asked to

visit the website of Design Skins in order to co-design their own skin for their mobile phone

and then come back and fill in the questionnaire. Approximately 270 surveys were sent by e-

mail and social media and 102 usable responses were received.

32

3.2 Measurement

The questionnaire is constructed using different types of questions. There were

informational questions, rating questions and interactive questions for the consumers with an

active participation.

As previously mentioned, an online questionnaire was developed to collect the primary

data in order to measure the variables in the model as well as the demographics of the

customers. The initial questionnaire was generated from previously validated academic

literature in the area of online environments, specific the co-designing. The final

questionnaire consisted of 47statements representing three different constructs, namely the

attributes of online co-designing, consumer satisfaction and the willingness to pay, where

each part tested the different components of the conceptual model.

In essence, before participants actually start with the survey, an introduction was

presented that describe the purpose and the process. Subsequently they were kindly asked to

follow the link of Design Skins in order to “design their own mobile skin” and after finishing

this task, go back to complete the questionnaire.

Note that the statements used for each construct in the present research are based on

scales that were validated in previous studies. First, the scale used for measuring aspect of the

website, the statements used in the present research are based on scales proposed by Barnes &

Vidgen (2000) and Childers et al (2001). To be more specific, Barnes and Vidgen proposed a

5 statements scale meant to measure specifically the consumers’ assessment of the

navigability aspect of a given website, where Childers et al (2001) used a 4 statements scale

for measuring consumers’ satisfaction with the navigability aspect of a given website when

shopping online. In essence, a 7 point statement will be used for greater variance. When it

comes to measure the participants view on web design in this research, each item was

measured on a 7-point likert scale from 1 (strongly disagree) to 7 (strongly agree) based on

the study of Kim & Stoel (2004) and Muyllea et al. (2001). Also the statements that were

meant to measure the transaction capability of the given website were based on scales

proposed by Kim & Stoel (2004). Furthermore, the statements to measure the attributes of the

co-design process are based on Dellaert and Dabholkar (2009). The scales for complexity,

control and enjoyment included, used by Dabholkar (1996) as well, were modified for the

needs of the current study. All scales used a 7 point likert scale from 1 (strongly disagree) to 7

(strongly agree).

33

The second part includes questions about customer satisfaction. Participants were

asked to indicate how satisfied they were with the customization process and the product. For

the items, that is used in this research were based on the scale of Oliver and Swan (1989).

They asked respondents to express their satisfaction in a 7 point scale from “unhappy” to

“very happy” and similar expressions about a product. Two more items were added, because

of the strong proven reliability. The items used by Reynolds and Beatty (1999), namely

“frustrating/enjoyable” and by Jones et al. (2000), namely “very unfavorable/very favorable”.

The third part of the questionnaire consists of questions relevant to customers’

willingness to pay the co-designed mobile skin. Participants were asked to rate the likelihood

that they would purchase the customized product. The answer was given on a scale ranged

from 0% to 100% for greater variance.

The final part of the questionnaire is related to respondents’ personal characteristics.

Their gender, their age, their education level and their income were asked as the theory

implies that they may influence customer’s performance in online co-design process. Hence,

with the expectation of the respondents’ income could have an influence on the likelihood of

the Willingness to Pay for the product, the decision was made to include these variables as

control variables in the regression analysis that was conducted.

34

Part IV: ANALYSIS AND RESULTS

This chapter reports the results of the survey conducted to test the research questions of

the present study and the interpretation of the results. First the overall data preparation will be

discussed followed by the analysis and leading up to the results.

4.1 Data preparation

The number of respondents who corresponded to the request to participate in the survey

was 162. However, the majority of answers were missing in 60 questionnaires. As the number

of the missing values was quite large and the number of the unfinished questionnaires was

relatively large, these participations were not taken into account. Furthermore to composite

together multiple items, all the items need to be “in the same direction”. This means that

indicating a higher (or lower) response each scale must correspond conceptually to answering

higher (or lower) on the other items you want to composite together. Underlining to this

regulation, two questions that were negatively stated reversed. To be more specific, the

questions “It is difficult to find links or menus on the website” and “Using the toolkit required

little work” are reversed in a positive manner. Furthermore, the data from the questionnaire is

based on two different scales, whereby the intervals of 5 point-likert are recoded into 7-point

likert for a better interpretation of the results.

Although, the study was conducted in the Netherlands, the questionnaire was online and

therefore sanded to people of different nationalities. As mentioned above, participants should

have had internet access, which implies a level of familiarization with technology. Finally, the

average age of the sample was 28 years old.

4.2 Analysis

The results were analyzed by means of conducting factor analyses and multiple

regression analyses. The factor analysis refers to a collection of statistical methods for

reducing correlational data into a smaller number of dimensions. Therefore first the factor

analysis is conducted to understand the structure of a set of variables. The objective was to

obtain results that could be better interpreted and subsequently used for further analysis. By

using factor analysis, the research variables will be clustered into factors and their ability to

measure each factor will be verified. The aim of this study is to examine the relationships

35

between those dimensions and to confirm or reject the hypothesis of the conceptual

framework.

First, all the 39 variables were included in the present research in order to measure the

respondents’ evaluation and their satisfaction with the process and design of the online co-

designing. However, an extensive examination of the data showed inconsistency which made

the results difficult to interpret. After careful examination of the factor results, a total of 28

variables were retained for further analysis. Second, after conducting several factor analyses

and refining the data, the results obtained showed clear loadings of the attributes of online co-

creation on each factor. Based on the factors obtained according to the specific item they were

measuring and based on the literature review, the decision was made to rename the factors, in

specifically “Web Design”, “Web Navigability”, “Transaction Capability” for website

attributes, “Complexity”, “Enjoyment”, “Control” for toolkit attributes, and “Process

Satisfaction” and the “Product Satisfaction”. Furthermore, in order to determine the internal

consistency of the different scales, the Cronbach’s alpha was computed for each scale

separately. Table 1 is presenting the results of factor analysis and an overview of Cronbach’s

alpha indicating the internal consistency of the different scales. The result of the KMO

indicates the appropriateness of the factor analysis. To be more specific, KMO indicates that

patterns of correlations are relatively compact and factor analysis should yield distinct and

reliable factors. However one of the simplest ways to estimate factor scores for each

individual involves summing raw scores corresponding to all items loading on a factor

(Comrey & Lee 1992). Hence, the scores estimated by the factor analysis for the different

factors is replaced by the average mean of the loaded factors and will be used for further

analysis, which may allow for easier interpretation. Also, average scores are useful to foster

comparisons across factors when there are differing numbers of items per factor.

Furthermore a few variables were removed as they were loading almost equal on two

factors. The factor analysis was tested again and 7 factors were extracted this time. Note that

product satisfaction and process satisfaction are extracted into two factors because of the high

correlation. As indicated by the reliability tests, all the dimensions are reliable which gives us

the opportunity to continue with the regression analysis in order to test the formed hypotheses.

36

TABLE 1Components

Website Navigability

Transaction Capability

Toolkit Control

Website Design

Toolkit Enjoyment

Toolkit Complexity

Question 1 ,851Question 3 ,796Question 4 ,733Question 2 ,703Question 15 ,920Question 13 ,914Question 11 ,897Question 24 ,905Question 25 ,868Question 23 ,807Question 6 ,843Question 8 ,825Question 7 ,807Question 20 ,888Question 21 ,841Question 22 ,778Question 16 ,874Question 17 ,830Question 18 ,794

Cronbach's Alpha ,859 ,960 ,907 ,949 ,879 ,787

KMO and Bartlett’s Test ,794

Similar results showed in table 1 were obtained also for the items measuring process

and product satisfaction. As mentioned, considering that these variables are highly correlating

with each other, the decision was made to extract a separate factor analysis for product and

process satisfaction, which is presented in table 2.

TABLE 2Components

Process Satisfaction Product Satisfaction

Question 30 ,890Question 31 ,843 ,344Question 26 ,797 ,357Question 29 ,794 ,389Question 27 ,739 ,422Question 33 ,897Question 32 ,342 ,889Question 37 ,562 ,725Question 35 ,578 ,704

Cronbach's Alpha ,936 ,938

KMO and Bartlett’s Test ,876

37

4.3 Results

The analysis chosen for this study is the regression analysis which allows fitting of a

predictive model to a dataset and uses the model to predict values of the dependent variable

from one or more independent variables (Field, 2005). Considering that a positive relationship

was expected for each hypothesis proposed in the current study, the one-tailed test was

performed. Therefore several regression analyses were conducted to have a better insight

about the relationship of the pre-established variables.

Relationship between attributes and online process satisfaction

The first relationship that will be relieved is the effect of the chosen attributes on the

online process. Several researchers opine that information systems as well as interaction

systems play a critical role in online co-creation. In essence, the notion among researchers and

practitioners is that website attributes like navigability and design will have a positive effect

on the online process (Loiacono et al, 2002, Rimer Tots 2001, Wolfingar & Gilly, 2001,

Novak et al. 2000).

As mentioned earlier, evolving customer into the co-designing process is a competent

way of serving individual customers both individually and efficiently. Piller (2004) clarifies

that the co-design process covers the demands of each individual customer with regard to

certain product features. Basically, all actions needed are executed within a solution space,

characterized by stable but still flexible and responsive processes. Therefore the expectation is

that high levels of these attributes will affect the online co-creation process in a positive

manner. In order to have a better impression of the impact of the attributes, the website

attributes as well as the toolkit attributes are included in order to test the effect on process

satisfaction. Hence, it is to be expected that the respondents’ satisfaction with each attribute of

online co-creation will have a positive influence on their satisfaction with the process. Based

on this notion, H1 and H2 were proposed whereby the Process Satisfaction was the dependent

variable and Navigation, Design, Complexity, Control and Enjoyment were the independent

variables. Table 3 shows the results of the regression in order to investigate the above

mentioned relationships.

38

TABLE 3

Variable

Unstandardized

Coefficients

Standardized Coefficients

Sig.

B Std. Error Beta(Constant) ,837 ,405 ,041 Website Navigability ,138 ,100 ,124 ,171 Website Design ,137 ,076 ,166 ,075 Toolkit Complexity -,174 ,069 -,172 ,013 Toolkit Enjoyment ,369 ,081 ,377 ,000 Toolkit control ,202 ,068 ,234 ,004

Process Satisfaction (Y) R2 = ,569

The preliminary results show significant correlations between the attributes and the

process satisfaction, indicating the existence of a positive linear relationship. Furthermore, the

model indicated that 56.9 % of the variation in the respondents’ level of satisfaction is being

explained by their evaluation of the different attributes of online co-creation, the chosen web

and toolkit attributes. The results show us that Website Navigability and Design are not

significant, while the toolkit attributes are significant at a level of 5 %. To be more specific,

you could say with a 95 % certainty that the relationship between these website attributes and

the satisfaction with the co-designing process did not occur by chance and that in fact the

toolkit complexity, enjoyment and control have a statistically significant effect on their

ultimate satisfaction with the co-designing process and are positively influencing the process

satisfaction.

Hence, there is some distinction to make for the attributes, specifically the website

attributes and toolkit attributes. To examine if there is some relationship of the attributes

separately on the online co-designing process, a regression is conducted for website attributes

and toolkit attributes. The results are shown in table 4 and 5.

TABLE 4Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error BetaConstant 1,273 ,408 ,002Website Navigability ,353 ,112 ,319 ,002Website Design ,294 ,084 ,356 ,001

Process Satisfaction (Y) R2 = ,368

39

Table 4 shows the regression with only website attributes. The initial result that is

obtained shows high correlations between the website attributes and the degree of satisfaction

with the co-creation process, indicating a positive linear relationship. Furthermore, the model

showed that 36,8 % of the variation in the respondents’ degree of satisfaction with the co-

creation process is being explained by Website navigability and Website design. Table 5

shows the result of the regression with only the toolkit attributes. Also in this analysis shows

high correlations between the toolkit attributes and the degree of satisfaction with the co-

creation process, indicating a positive linear relationship. Furthermore, compared with the

table 4, this model showed that 52,8 % of the variation in the respondents’ degree of

satisfaction with the co-creation process is being explained by Toolkit complexity, enjoyment

and control.

However, when assessed separately (Table 4), the result showed that the website

navigability and the web design were significantly contributing to the respondents’

satisfaction with the process at a 5% level. An explanation is that when it comes to the online

process the toolkit attributes overwhelm the effect of the website attributes. This is mainly

initiated because respondent spent more time on the toolkit attributes while designing their

product. On the other end, when placing all the attributes together, the results showed that the

navigability aspect of the web site and the design aspect do not have a significant influence on

the process satisfaction. In other words, the results obtained in the present study could not

statistically prove that the navigability and the web design contributing in a significant way to

the level of satisfaction of the process by the consumers.This fact means that according to the

findings there is no relationship between the chosen website attributes and the satisfaction

they experience while designing their own skin for their mobile phone. Hence, most of the

time spent for the co-designing process takes place at the solution space provided for creating

40

TABLE 5

Variable Unstandardized Coefficients

Standardized Coefficients

Sig.

B Std. Error BetaConstant 1,259 ,356 -,172 ,001Toolkit Complexity -,175 ,071 ,491 ,016Toolkit Enjoyment ,481 ,074 ,321 ,000Toolkit Control ,277 ,065 -,172 ,000

Process Satisfaction (Y) R2 = ,528

your own product. Although there could be a mediation effect of the toolkit attributes on the

website attributes. According to these results, the toolkit attributes could mediate the effect of

the Website Navigability and Design.

When dividing the attributes whereas the website navigability and toolkit complexity

contributing to the utilitarian value and the website design, toolkit enjoyment and toolkit

control contributing to the hedonic value, the results shows a mixed conclusion. To be more

explicable, the toolkit attributes are in essence the main attributes that are significantly

influencing the respondents’ degree of satisfaction derived from the process of online co-

creation, whereby the perceived hedonic value plays a possible clearance. This means that the

more enjoyable users evaluate the toolkit and the more control they perceive they had on it,

the more satisfied they are with the customization process. The results about complexity come

on the contrary with the existing literature. On the other hand, previous findings of past

researches about the two other attributes are supported (Dellaert & Dabholkar 2009; Schreier

2006). In conclusion, the results of the regression do not allow the confirmation of hypothesis

1, but do allow the confirmation of hypothesis 2.

Relationship between satisfaction with co-designing process and willingness to pay

The second type of relationship that is proposed in this study suggests a positive

influence of the degree of satisfaction with the co-design process on the willingness to pay for

the ultimate design. A linear regression was conducted in order to test the hypothesis 3,

regarding the relationship between Process Satisfaction (independent variable) and WTP

(dependent variable).

Traditionally, customization is connected to the possibility of charging premium prices

because of the added value of a customized solution meeting the specific needs of a customer.

(Chamberlin 1962). Products that require matching physical dimensions often allow a higher

price premium than products that customize just on design patterns (Berger and Piller2003).

Franke and Piller (2003) presented an equation that represents customer decision making

process for customized products. The expected returns have to exceed the expected costs.

WTP, as a measurement, is connected with satisfaction in the current literature in both offline

and online shopping environments and recently also in the mass customization environment.

Hypothesis 3 suggests that there is a positive relationship between the process

satisfaction and the WTP and therefore high level of satisfaction will positively affect the

WTP. The regression model (Table 6) resulted a substantial coefficient of determination,

41

explaining 13,9 % of the variation of WTP. Considering the unstandardized coefficients of the

regression model, WTP is increased 0.373 units when process satisfaction is increased by one

unit. Although, the result is significant (p< 05), the amount of explained variance for

Willingness to Pay was relatively low (R2 =, 139).TABLE 6Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 15,146 9,953 ,131Process Satisfaction 9,554 2,377 ,373 ,000

WTP (Y) R2 = ,139

To explore this low variance, an additional regression is conducted. Table 7 present the

results of the regression analysis when the factors of the website attributes and toolkit

attributes are included. As it is demonstrated below, only one of the independent variables

explain significantly the variation on WTP, namely Enjoyment. This is underpinning to

Csikszentmihalyi (1996), who pointed out that it is likely that users enjoy the design process

due to a "flow" experience and the joy of performing an artistic and creative act. The

components of Process Satisfaction are derivate of emotional experiences during online co-

creation. Marketers know there is a better chance of winning customers if they "feel good."

Positive affect speeds consumer decision making and enhances product recall with positive

associations (Lee and Sternthal, 2000). These feeling states could have important effects on

purchase intent and loyalty. For example, the degree of delight and positive or negative affect

experienced by consumers can strongly affect their intent to buy (see Oliver, Roland, and

Varki 1997) and therefore their WTP. Also observing the result, we can explain that the more

enjoyment the respondents perceive on it, the more satisfied they are with the customization

process and therefore are willing to pay for the designed product. According to the results of

table 6, we can conclude that hypothesis 3 is supported.

TABLE 7Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 22,155 14,539 ,131Website navigability 1,004 3,580 ,035 ,780Website design 1,236 2,731 ,058 ,652Toolkit Complexity -4,414 2,479 -,170 ,078Toolkit Enjoyment 6,714 2,898 ,268 ,023Toolkit control ,355 2,428 ,016 ,884

WTP (Y) R2 = ,154

42

The effect of the moderators

Franke and Piller (2003) presented an equation that represents customer decision

making process for customized products. The expected returns have to exceed the expected

costs. Only in that case mass customization will be employed. According to those

academicians, the returns have two dimensions; the rewards from the unique shopping

experience, as satisfaction with the fulfillment of a co-design task (Dellaert and Stremersch

2003), and the increment of utility from the better fitting to specific needs of a co-designed

product, in other words, the value of product customization. The close relationship between

the co-designing process and product is also been supported by Riemer and Totz (2003), who

stated that satisfaction with the co-designing process impacts product satisfaction. In

similarity, this can be seen in research showing that customers’ perceptions of retail

environments can have an influence on buying behavior (Mattila and Wirtz, 2001), which is

closely related to the WTP. This part portrays the effects of product satisfaction and

transaction capability on the WTP. Hence, it is to be expected that the respondents’

satisfaction with the online co-designing process has two moderators, when examine the

effect on WTP. In order to investigate of Product Satisfaction and Transaction Capability act

like moderators in the relation between the Process Satisfaction and WTP, several regression

analyses were conducted.

The first type of relationship that conducted is the direct effect of the moderators on the

WTP. Since the customized product or design is a direct result of the co-creation experience,

consumers’ satisfaction with the process of co-creation will positively influence their

satisfaction with the customized product or design (Franke & Piller 2003; Dellaert &

Stremersch 2005; Riemer & Totz 2001). The self-designed product is unique and it has been

found that people assign greater value to products that are unique than the standard products,

with keeping the objective value being equal (Brock 1968; Fournier 1991).

In addition to the process, the output of the customization process might also be of high

value. In a similar way, this is also supported in empirical studies conducted by Franke and

Piller (2004) and Schreier (2006), who suggest that the users intention to pay for self-designed

products can be much higher than in case of the standard products. Consumers are likely to

43

engage in relational behavior to achieve greater efficiency in their decision making and to

reduce the perceived risks associated with future choices (Seth & Parvatiyar 1995). In the

online co-design process the consumer creates, while not thinking of the transaction

capability. Based on previous studies, consumers’ perception of transactional capability could

influence their satisfaction with online co-designing and therefore their perception to WTP.

Based on this notion, a significant relationship is proposed between WTP and Product

Satisfaction (H4a) and secondly between WTP and Transaction Capability (5a). The primarily

results are shown in the table below.

TABLE 8Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 8,719 10,458 ,481

Website Transaction Capability -,093 2,265 -,004 ,749

Product Satisfaction 10,755 2,712 ,421 ,031

Process Satisfaction 3,080 4,341 ,120 ,480

WTP (Y) R2 = ,180

The model explains 18% of the variance of product Satisfaction (R² = 0.180). In the

current regression model, as long as the value of the significant variable is positive it can be

said that there is a positive relationship between the predictors and the outcome. Hence, in this

model only product Satisfaction is significantly influencing the WTP. Therefore, if Product

Satisfaction is increased by one unit and the other predictors stay constant, then our model

predicts that WTP is expected to increase 0.421 units.

Unfortunately, according to the literature and proposed hypothesis, a positive

relationship was expected between Transaction Capability and WTP. In addition, when

conducted a regression separately, Transaction Capability becomes significant. Table 9 and 10

present the additional results, whereby the relationship between the moderators and WTP is

conducted separately.

TABLE 9Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 37,120 8,163 ,000Website Transaction Capability 4,508 2,084 ,211 ,033

WTP (Y) R2 = ,045

44

TABLE 10Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 8,617 10,107 ,396Product Satisfaction 10,698 2,318 ,419 ,000

WTP (Y) R2 = ,176

The preliminary results in table 9 showed significant correlations between Transaction

Capability and WTP, indicating the existence of a positive linear relationship. Although the

effect of Transaction Capability on WTP explains just 4.5 % of the variation, the relationship

of Transaction Capability on WTP is significant (P=0.33) at a level of 5%. Table 10 shows

that the model explains 17.6% of the variance of product Satisfaction (R² = 0.176). According

to the unstandardized coefficient β the relationship between this one significant predictor and

the outcome is positive, as the value itself is positive. Every unit increase in Product

Satisfaction causes an increase of 0.419 units of WTP. To be more specific, the more

respondents are satisfied with the product they have designed on the website, the more they

are likely to pay for the product, which supports hypothesis H4a, but unfortunately reject H5a.

Although, the direct effect of the moderators is investigated, the current study expects

that Product Satisfaction and Transaction capability interact between the relationship of

Process Satisfaction and WTP. Secondly, in order to understand the relationship a regression

is conducted whether there is a mediation effect of the two moderators. Mediating variables

are often contrasted with moderator variables, which pinpoint the conditions under which an

independent variable exerts its effects on a dependent variable. Mediation occurs when a

direct causal relationship between an independent variable and a dependent variable is

affected by another variable (Baron and Kenny, 1986). Product Satisfaction might also be a

mediator variable in that it explains why there is a relation between Process Satisfaction and

WTP. When you remove the effect of Product Satisfaction, the relation between Process

Satisfaction and WTP disappears. A regression is conducted whether there is a mediation

effect of the two variables. The results are shown in the tables below.

45

TABLE 11

Variable Unstandardized Coefficients

Standardized Coefficients

Sig.

B Std. Error Beta(Constant) ,941 ,247 ,000Process Satisfaction ,811 ,059 ,808 ,000

Product Satisfaction (Y) R2 = ,650

TABLE 12Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) ,698 ,397 ,081Process Satisfaction ,740 ,095 ,616 ,000

Website Transaction Capability (Y) R2 = ,373

TABLE 13Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 6,996 10,451 ,505Product Satisfaction 8,664 3,949 ,339 ,031Process Satisfaction 2,526 3,963 ,099 ,525

WTP(Y) R2 = ,179

TABLE 14

Variable Unstandardized Coefficients

Standardized Coefficients

Sig.

B Std. Error Beta(Constant) 15,581 10,154 ,128Process Satisfaction 10,015 3,031 ,391 ,001Website transaction capability -,623 2,522 -,029 ,806

WTP (Y) R2 = ,373

Tables 11-14 shows the mediation theory is substantiated for the Product Satisfaction,

but not for Transaction Capability. Prior to conducting the regression analysis, the

respondents’ satisfaction with the co-creation process was correlated with their satisfaction

with the design in order to assess whether a positive linear relationship was present (table 11).

The results showed that the respondents’ satisfaction with the co-creation process is highly

correlated with their satisfaction with the design, indicating a strong positive relationship

between the two. However, when examine both effects on WTP, only the respondents’

satisfaction with the co-designed product has proven to be a statistically significant predictor

at a 5% level to the WTP. The perception for product satisfaction need to affect the WTP and

46

process satisfaction, and the significant effect of process satisfaction on WTP is disappeared

when the effect of Product satisfaction on WTP is tested as well.

Hence, the argument made by researchers and practitioners in previous studies that

satisfaction with the co-designing process positively influences the satisfaction with the

design was also conducted in this regression. It can be concluded, consumers who are

satisfied with the co-designing process will consequently be satisfied with their customized

design as well. Table 13 confirms that Product Satisfaction mediates the effect of process

satisfaction on WTP. Process satisfaction was found to have a significant effect on the

dependent variable (p = .000) when Product Satisfaction is not included in the model. To be

more specific, the more respondents are satisfied with the product they have designed on the

website, the more they are likely to pay for the product. It can be concluded that satisfaction

judgment in this situation is resulting from the evaluation of physical and emotional feelings

of the product, not specific the attributes of the product. The more the product meets the

expectation of these respondents based on online co-creation, the higher will be their level of

satisfaction towards the process and therefore a greater influence on WTP.

On the other side, according to table 14, the Transaction Capability is proven to be

insignificant predictor of the mediation effect. However table 12 showed that 37.3 % of the

variation in the respondents’ WTP is being explained by the Process Satisfaction and

Transaction Capability included in the analysis. When examined separately, both variables

found to be significant predictors of the WTP. To be more specific, the results indicated that

only Process Satisfaction is significantly contributing or influencing the respondents’ WTP.

The result shows in table 14 shows partially that there is a negative effect of Transaction

Capability (Standardized coefficient = -, 029). As discussed in previous chapters and according

to the prior research (Elliot and Fowell, 2000; Szymanski and Hise, 2000), as perception of

security risk, privacy concerns and lack in trust, the Transaction Capability could also have a

negative effect on the process. This result might be representative of an overall lack of

experience of participants with paid online content. When facing the task of assigning some

monetary value to the content being examined, participants could not rely on previous similar

tasks, having never before paid for content. In other words, the respondents’ WTP is for the

most being influenced by the process satisfaction. In essence, it is statistically proven that

Transaction Capability does not mediate the relationship between Process Satisfaction and

WTP. Nevertheless, this could not be statistically proven in the present study.

47

Another way to think about this issue is that a moderator variable is one that influences

the strength of a relationship between two other variables, and a mediator variable is one that

explains the relationship between the two other variables. Consider the relation between

Process Satisfaction and WTP. Product Satisfaction might be a moderator variable, in that the

relation between Process Satisfaction and WTP could be stronger for consumers that are

satisfied with the product and less strong or nonexistent for consumers that are not satisfied

with the product. This model is also applies for the Transaction Capability. Consumers are

likely to engage in relational behavior to achieve greater efficiency in their decision making

and to reduce the perceived risks associated with future choices (Seth & Parvatiyar 1995). In

the online co-design process the consumer creates, while not thinking of the transaction

capability. Therefore consumers’ perception of transactional capability could influence their

satisfaction with online co-designing. Based on these notions, a significant interaction effect

of the Product Satisfaction and Transaction Capability is proposed (H4b and H5b)

Last but not at least, the interaction effect of the two variables was examined. The result

of the regression analysis is shown in the tables below.

TABLE 15Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) -12,180 20,162 ,547

Product Satisfaction 13,753 6,043 ,539 ,025

Process Satisfaction 8,976 7,024 ,350 ,204

Interaction Product_Process -1,572 1,415 -,441 ,269

WTP (Y) R2 = ,189

TABLE 16Variable Unstandardized

CoefficientsStandardized Coefficients

Sig.

B Std. Error Beta(Constant) 4,549 18,712 ,808

Process Satisfaction 13,292 5,566 ,519 ,019

Website Transaction Capability 3,290 6,116 ,154 ,484

Interaction Process_Transaction -1,053 1,499 -,289 ,592

WTP (Y) R2 = ,144

The initial results in table 15 showed that the model indicated just 18,9 % percent of the

variation in the respondents’ perceived value of WTP is being explained by Product

Satisfaction, Process satisfaction and the interaction effect of both included in the analysis.

48

Nevertheless, according to the result, only Product Satisfaction is found to be significant on

WTP. To be more specific, the interaction effect of Product Satisfaction, in that the relation

between Process Satisfaction and WTP is stronger, is not significant or does not exist. These

results simply show that a possible effect of Product Satisfaction as a moderator on the

relationship between Process Satisfaction and WTP could not be statistically proven (P>0,5)

in the present research. One possible explanation is that the chosen product for co-designing

in this study is not a decisive factor and therefore the link or pattern between the respondents’

value for the product and WTP could not be established in the present study. On the other

hand, table 16 presents the results of the interaction effect of Transaction Capability. Hence,

again, it could be say that the Transaction Capability does not occur like a moderator, since it

is not significant. However, only Process Satisfaction was found to be significant predictor of

WTP.

Summary of the results

The objective of this chapter was to present the analysis of the data collected for the current

research and the description and interpretation of the findings. Nine factors were identified,

after conducting a factor analysis; Website Design, Website Navigability, Toolkit

Complexity, Toolkit Enjoyment and Toolkit Control, Process Satisfaction, Product

Satisfaction and WTP. These factors were used to run several regression analyses in order to

test the hypotheses formed based on the literature review.

In summary, the results in the current research confirm most of the previously proposed

hypotheses. First, it can be concluded that the toolkit attributes have a statistically significant

influence on the process satisfaction. The results showed that the toolkit complexity has a

significant negative influence on Satisfaction process. Note that when it comes to the

statements meant to measure consumers’ satisfaction were reversed in the questionnaire that

was sent to the respondents (Appendix A). However, when analysed the attributes separately,

the same can be concluded for the website attributes. Based on previous research, the

expectation was that the navigability of the website as well as the design would have a

statistically significant influence on the process satisfaction. Indeed, the website navigability

and design are significant when excluding the toolkit attributes in the regression .An possible

explanation could be that the toolkit probably mediates the website attributes when examine

the effect on Process Satisfaction.

49

Furthermore, it was expected that the satisfaction with the process will have a positive

effect on WTP for the customized product. The results obtained in the current study could

validate the above assumption. Third, the results showed that the Product Satisfaction has a

significant positive influence on WTP. The mediation effect exists in the relationship between

the process satisfaction and WTP. Nevertheless, the influence of transaction was not

significantly proved. When it comes to the interaction effect of Product Satifaction and

Transaction Capability, we can conclude that the Product Satisfaction is a moderator. In other

words, the stronger the satisfaction is with the product, the stronger the relation between

Process Satisfaction and WTP for consumers that are satisfied with the product and less

strong or nonexistent for consumers that are not satisfied with the product. To be more

specific, when a consumer is satisfied with the co-designed product and with the process, the

higher they are willing to pay for the product. On the other hand, although, the expectation

was that the Transaction Capability would have a similar effect, the present study could not

validate this assumption. The results show that there is no interaction effect of this variable.

An overview of the above mentioned results is shown below.

Table 1: Summary of Hypotheses

H1a Website navigability has a positive effect on the process satisfaction Rejected

H1b Evaluated web design has a positive effect on the process satisfaction Rejected

H2a Perceived complexity of the toolkit attribute has a negative effect on the process

satisfaction.

Supported

H2b Perceived enjoyment from the toolkit has a positive effect on the process satisfaction. Supported

H2c Perceived control of the toolkit has a positive effect on the process

satisfaction.

Supported

H3 Satisfaction with the process will have a positive effect on WTP for the customized product.

Supported

H4a Product satisfaction has a positively effect on WTP. Supported

H4b The effect of process satisfaction on WTP is higher, the higher the product satisfaction

is.

Supported

H5a The higher satisfaction with the transaction capability, the higher the WTP will be. Rejected

H5b The effect of process satisfaction on the WTP is higher when the satisfaction of

transactional capability is high.

Rejected

50

Part V DISCUSSION & CONCLUSIONS

This chapter is dedicated to some general conclusions, the managerial and academic

implications, the limitations and suggestions for future research.

5.1 General Conclusions

The traditional system of company-centric value creation (that has served us so well

over the past 100 years) is becoming outdated. Leaders now need a new frame of reference for

value creation. In the growing economy, competition will center on personalized co-creation

experiences, resulting in value that is truly unique to each individual.

Nowadays, where the internet has become a worthy tool of communication and where

consumers are more active than before, the business is stimulated to predicate upon a new

business strategy, the online mass customization. Mass customization and more definitely

online product co-design is a recently adopted marketing strategy that has not been thoroughly

inspected. After reviewing an extensive part of the literature about online product co-design,

the research model described in chapter 3 was formulated. Translating the effect of co-

creation in an online environment for the business, in order to obtain a better understanding

from a customer’s perspective, the current study’s main focus was on examining how specific

website and toolkit attributes affect the online designing process and WTP. Also the influence

of process and product satisfaction on WTP was tested as well. There were some research

questions formulated in the beginning, which can be answered in this chapter. The first

question that rose was what impact will have the website attributes and toolkit attributes on

customer’s satisfaction with the process.

In summary, the results showed that the toolkit attributes are significantly influences the

online process satisfaction. Nevertheless, when assessed separately, the website attributes has

also a positive influence on the online process satisfaction. The findings indicated that the

relationship among website attributes and satisfaction was not completely as expected. This

might also accountable due the fact of the mediation effect of toolkit attributes. However, as

mentioned previously this does not mean that website navigability and design aspect in

general is totally irrelevant. These results simply show that current research could not find

51

statistical evidence in order to claim that the website navigability and design has a significant

influence on Process Satisfaction. Consequently on the consumer’s perspective, when co-

creating, the attributes of the website like navigability and design disappears when consumers

are in the solution space that the toolkit offers to make your own product. While the utilitarian

aspect of online environments is of great importance, the hedonic pleasures are of equal

relevance in order to motivate consumers’ participation and in the end the satisfaction. In this

study, it cannot be confirmed that hedonic aspect is stronger than the utilitarian aspect. Hence,

the analysis shows that the both hedonic as well as utilitarian value of the attributes is

important for consumers’ process satisfaction. In essence, during the process of co-creating,

consumers spent more time with the toolkit and therefore their solution space then being

surfing on the given website.

Furthermore, the results showed that the toolkit attributes most influences the Process

Satisfaction, while only Toolkit Enjoyment is significantly influences the WTP. Also it was

statistically proven in the present study that the respondents’ satisfaction with the online co-

creation process significantly influences their satisfaction with the design and has a mediation

effect on the WTP. On the other hand, the mediation effect that was expected from the

Transaction Capability was not statistically approved. Consequently, it can be concluded that

consumers who are satisfied with the online co-creation process will most likely be satisfied

with the product they designed online and therefore pay a higher price.

Hence, by mass customization, the online experience is a critical factor for completing

the process and the ability of a merchant is reflected in its ability to handle sales transactions

and the expertise to generally conduct business online. When consumers experience superior

states of satisfaction, they perceive a high outcome of a trade and therefore are willing to pay

more than less satisfied consumers, because this results in an reasonable relation of outcome

to input. Although the superior satisfaction, this do not necessary mean that consumers are

actually buy the product. When co-creating online, it was supposed that the chosen website

attributes will be a deciding factor for the online process and therefore a critical aspect for the

WTP. Hence the website is the platform for customer engagement in product co-creation,

whereby the chosen attributes are the most important ones to have influence on the WTP.

5.2 Managerial implications

This research has also been conducted with the aim of obtaining insights into the

capabilities a firm needs to realize co-creation and the associated managerial implications.

52

The traditional view of the firm as an autonomous creator and extractor of value is

increasingly redundant. Consumers want to be involved, connected, empowered and active.

The effectiveness of co-creation depends on how much value is created for both consumers

and producers. Companies will have to select opportunities with the highest potential payoff,

as well as the structure relationships to manage risks while reducing effort required to fully

realizing this connection with customers.

In essence, when it comes to implementing customer-oriented strategies, it is crucial to

understand of what consumer’s value and is satisfied with. Therefore an understanding of the

most essential capabilities a firm must deploy in order to co-create successfully and the ways

in which managers can shape these conditions specific to their companies would answer a

large number of questions co-creation raises for managers.

When it comes to the consumers’ satisfaction with online co-creation, note that in this

study a distinction is being made between the website attributes and the toolkit attributes. The

first results that were found showed that consumers’ satisfaction with the online co-creation

process in particular, is for the most part being influenced by the toolkit attributes. To be more

specific, the enjoyment, control and complexity are found to have an effect on the process

satisfaction of online co-creation. Although, when examine the attributes separately, the

attributes who is contributing to the perceived hedonic value are stronger that de attributes

who are contributing to the utilitarian value. Therefore, companies whose goals are to

specifically increase the consumers’ satisfaction with the online co-creation process will have

to focus for the most part on attributes of hedonic value. The result of the study concerning

the enjoyment that people perceive during the co-design experience is interesting and valuable

for the managerial word. It seems that the more fun users have during the customization

process, the more satisfied they are with the process as well as the product and the more

positive they are to pay. An example of a possible strategy would be to add music during the

co-design process. It seems that the more fun users have during the customization process, the

more satisfied they are with the process as well as the product and the more positive they are

willing to pay. Therefore, marketers’ endeavor can be to increase perceived enjoyment. Users

would be able to choose songs from a predefined playlist to accompany them and inspire them

to create their own unique product. Enjoyment could also be increased if customers could

participate in a community. To be more specific, satisfaction with the design depends on

consumers’ perceptions and views on whether engaging in the process of online co-creation

can be done in a convenient and efficient manner and ultimately whether co-creating your

53

own product is worth the time and therefore worthwhile. Hence, companies that want to

increase consumers’ satisfaction with the ultimate design, will have to focus on

communicating to the consumers the more functional benefits of engaging in such a process,

such as co-creating a product tailored to their specific desires and needs and that engaging in

the process can be done in a convenient and efficient manner.

Finally, the results also showed that the respondents’ satisfaction with the co-creation

process contributes in a great manner to their satisfaction with the design. Therefore, in order

to enhance the WTP, companies will have to focus their attention on attributes that tend the

consumers to actually buy the co-created product. In other words, these results imply that if

consumers are satisfied with the co-creation process and they perceived the process as being

entertaining and enjoyable, this will ultimately also influence their satisfaction with the

customized product and their willingness to pay a premium price. Thus, in fact is the product

that is chosen to involve customers in the co-creation process and the toolkit provided to use

is very important. On the other side, the website where this opportunity to create your own

product is provided needs to be more contributing to the hedonic value. When it comes to the

WTP for the product that is created, utilitarian aspect of the website attributes remaining more

in the background. From a managerial perspective, the study of the relationship between

hedonic value and co-creation is important. Enjoyment and WTP have been shown to possess

similar desirable outcomes for businesses (e.g., satisfaction and commitment). Marketing

managers usually tailor their efforts in order to influence such outcomes. Understanding the

relationship and boundaries between the two variables may guide managers to make better

decisions in the marketing mix and the interaction opportunities that they provide to their

customers. In addition, the result of this study concerning the enjoyment that people perceive

during the co-design experience is interesting and valuable for the managerial word.

5.3 Limitations & Future Research

The present study investigated the link between the respondents’ evaluations of the

attributes of online co-creation, the influence these have process satisfaction and the

consequent effect on their willingness to pay. However the present study was conducted with

some limitations. First of all, the respondents’ evaluation of the attributes of online co-

creation, their perceived values and their degree of satisfaction with the process and the

design, is in this particular case very much dependent on their experience with specifically the

54

given website. Hence, it is realistic to believe that the results might have been different if

another website was proposed. Secondly, the sample of the study might be regarded as not big

and adequate enough to allow full generalization of the results. The size of the sample is 102

respondents, thus the results might not be applicable in any case. Also note that the data for

the present study was collected through a questionnaire that was sent specifically to web

users. However, the mainstream of the web users who participated in this research have never

or only once before engage in an online co-creation process. And though the online

customization environment was existing, participants were not real customers but people

asked to take part in the co-design process and who may have experienced it differently if

they had got involved to that in order to cover their need of a skin for their mobile phones.

Further research could be conducted in cooperation with the Design Skins company and ask

real customers to fill in a questionnaire with relevant content after their participation in the

process. The outcome would be a larger and more representative dataset.

Based on the above discussion, it can be concluded that specifically the results

reflecting how the respondents graded the different statements meant to measure their

perceptions regarding the attributes of online co-creation, their perceived satisfaction with the

online co-creation process and product, cannot be generalized. Therefrom, to be more

successful in implementing online co-design as a strategy, future studies should focus on

investigating the concept from a customer’s perspective. It is of such an importance in order

to obtain more practical results that companies can use when implementing online co-creation

as a strategy, future research should explore investigating the specific aspects of the attributes

of online co-creation that might be influencing consumers’ satisfaction with the WTP.

Another approach to be more value adding for the business is to replicating the conceptual

framework proposed in this study with other products and attributes to have reliable

understanding of what customers drive to actually give an ultimate price for the co-created

product.

An option would be to conduct a comparative study using different sites that are

offering the same kind of product. Respondents would then be required to evaluate their

experience after co-creating on the websites of companies offering similar products. In

addition, future research should also focus on further drivers that will influence their

willingness to pay and or if consumers satisfaction with the process of online co-creation and

the ultimate design, translates into consumers actually buying the product.

55

REFERENCESAnderson, E.W., C. Fornell, and D.R. Lehmann. "Customer Satisfaction, Market Share, and Profitability: Findings from Sweden." Journal of Marketing 58 (1994): 53-66.

Anderson, E.W., C. Fornell, and R.T. Rust. "Customer Satisfaction, Productivity, and Profitability: Differences between Goods and Services." Marketing Science 16.2 (1997): 129-145.

Anderson, E.W., and M.W. Sullivan. "The Antecedents and Consequences of Customer Satisfaction for Firms." Marketing Science 12.2 (1993): 125-143.

Babin, B.J., W.R. Darden, and M. Griffin. "Work and/or fun: Measuring hedonic and utilitarian shopping value." Journal of Consumer Research 20.4 (1994): 644-656.

Barnes, S., and R. Vidgen. "An integrative approach to the assessment of E-commerce quality", Journal of Electronic Commerce Research 3.3 (2002): 114-127.

Barnes, S.J., and R.T. Vidgen. "WebQual: An Exploration of Web Site Quality." Proceedings of the eighth European Conference on Information Systems (2000): 298-305.

Batra, R., and O.T. Ahtola. "Measuring the hedonic and utilitarian sources of consumer attitudes." Marketing Letters 2.2 (1990): 159-170.

Bhatti, N., A. Bouch, and A. Kuchinsky. "Integrating user-perceived quality into web server design." Computer Networks 33 (2000): 1-16.

Broekhuizen, T.L.J., and K.J. Alsem. "Success factors for masscustomization: a conceptual model." Journal of Market-Focused Management 5 (2002): 309-330.

Burke, R.R., A. Rangaswamy, and S. Gupta. Rethinking Market Research in the Digital World. In J.Wind & V. Mahajan (Eds.), Digital Marketing. GlobalStrategies from the Worlds’ Leading Experts (pp.226-255). New York: John Wiley & Sons, 2001.

Campbell, D.J. "Task complexity: a review and analysis." Academy of Management Review 13.1 (1988): 40-52.

Carpenter, J.M., and M. Moore. "Utilitarian and hedonic shopping value in the US discount sector." Journal of Retailing and Consumer Services 16 (2009): 68-74.

Carpenter, J.M. "Consumer shopping value, satisfaction and loyalty in discount retailing." Journal of Retailing and Consumer Services 15.5 (2008): 358-363.

Childers, T.L., C. Carr, J. Peck, and S. Carson. "Hedonic and utilitarian motivations for online retail shopping behavior." Journal of Retailing 77.4 (2001): 511-535.

Chiou, Jyh-Shen, Cornelia Droge and Sangphet Hanvanich (2002), “Does Customer Knowledge Affect How Loyalty is Formed?” Journal of Service Research, 5, 113

Churchill, G.A., and C. Surprenant. "An investigation into the determinants of customer

56

satisfaction." Journal of Marketing Research 19 (1982): 491-504. P

Collier, J.E., and C.C. Bienstock. "Measuring Service Quality in E-Retailing." Journal of Service Research 8.3 (2006): 260-275.

Crowley, A.E., E.R. Spangenberg, and K.R. Hughes. "Measuring the hedonic and utilitarian dimensions of attitudes toward product categories." Marketing Letters 3.3 (1992): 239-249.

Dahan, E, and J.R Hauser. "The Virtual Customer." Journal of Product Innovation Management 19 (2002): 332-353.

Davis, F.D., R.P. Bagozzi, and P.R. Warshaw. "Extrinsic and intrinsic motivation to use computers in the workplace." Journal of Applied Social Psychology 22.14 (1992): 1109-1130.

Davis, F.D. "Perceived usefulness, perceived ease of use, and user acceptance of information technology." MIS Quarterly 13.3 (1989): 319-340.

Davis, S. Future Perfect. New York: Addison-wesley, 1987. Print.

Davis Stanley M. (1987), “Future Perfect,” Addison-Wesley Publishing, Reading, MA

Dellaert, Benedict G. C and Stefan Stremersch (2003), “Customer Preferences for Mass Customization,” Working Paper, http://arno.unimaas.nl/show.cgi?fid=921

------ and ------ (2005), “Marketing mass-customized products: Striking a balance between utility and complexity,” Journal of Marketing Research, 42, 219-227.

------ and Pratidha Dadholkar (2009), “Increasing the Attractiveness of Mass Customization: The role of Complementary On-line Services and Range of Options”, International Journal of Electronic Commerce, 13, 3, 43-70

Elliot, M., and P. Speck. "Consumer perceptions of advertising clutter and its impact across various media." Journal of Advertising Research 38.1 (1998): 29-41.

Eppinger, Steven, and Karl Ulrich. Product Design and Development. New York: McGraw-Hill/Irwin, 2003.

Ernst and Young. "Internet Shopping: An Ernst and Young Special Report." Ernst and Young LLP . (1999)

Franke, N., and F. Piller. "Value Creation by Toolkits for User Innovation and Design: The Case of the Watch Market." Journal of Product Innovation Management 21 (2004): 401-415.

Franke, Nikolaus and Frank T. Piller (2003), “Key research issues in user interaction with configuration toolkits in a mass customization system,” International Journal of Technology Management, 26, 578–599.

------ and ------ (2004), “Configuration Toolkits for Mass Customization: Setting a Research Agenda,” The International Journal of Flexible Manufacturing Systems, 16, 313–334

57

------ and ------ (2004), “Toolkits for user innovation and design: an exploration of user interaction and value creation,” Journal of Product Innovation Management, 21:6, 401-415.

------- and Martin Schreier (2002), “Why customers value mass-customized products: The importance of process effort and enjoyment,” Working Paper, Journal of Product Innovation Management

Hart, C., and J.R. Taylor. "Value creation through MC. Achieving competitive advantage through mass customization." paper presented at the University of Michigan Business School seminar . (1996)

Hirschman, Elizabeth C. and Morris B. Holbrook (1982), “Hedonic consumption: Emerging concepts, methods and propositions,” Journal of Marketing, 46, 3, 92–101.

Hirschman, E., and M.B. Holbrook. "Expanding the Ontology and Methodology of Research on the Consumption Experience." In: Brinberg, D. and Lutz, R.J.. Editors, 1986. Perspectives on Methodology in Consumer Research. Springer Verlag, New York, (1986): 213-251.

Hoffman, D.L., and T.P. Novak. "Marketing in hypermedia computer-mediated environments: conceptual foundations." Journal of Marketing 60.3 (1995): 50-68.

Holbrook, M.B., and E.C. Hirschman. "The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun." Journal of Consumer Research 9.2 (1982): 132-140.

Holbrook, M.B. Consumer Value: A Framework for Analysis and Research. New York: Routledge, 1999.

Holbrook, M.B. The Nature of Customer Value, an Axiology of Services in the Consumption Experience. Thousand Oaks, CA: Sage Publications, 1994.

Huang, M.H. "Web performance scale." Information & Management 42 (2005): 841-852.

Hunt, K.H. "CS/D Overview and Future Directions." in Conceptualization and Measurement of Consumer Satisfaction and Dissatisfaction. H. Keith Hunt, ed Marketing Science Institute. Cambridge (1977): 7-23.

Hwang, M.I., and J.W. Lin. "Information dimension, information overload and decision quality." Journal of Information Science 25.3 (1999): 213-219.

Jarvenpaa, S.L., and P.A. Todd. "Consumer reactions to electronic shopping on the World Wide Web." International Journal of Electronic Commerce 1.2 (1997): 59-88 .

Jones, M.A., K.E. Reynolds, and M.J. Arnold. "Hedonic and utilitarian shopping value: investigating differential effects on retail outcomes." Journal of Business Research 59 (2006): 974-981.

Johnson, M.D. and Gustafsson, A. (2000), “Improving customer satisfaction, loyalty, and profit: an integrated measurement and management system,” San Francisco: Jossey-Bass.

58

Jones, Michael A., David L. Mothersbaugh and Sharon E. Beatty (2000), “Switching Barriers and Repurchase Intentions in Services”, Journal of Retailing, 76, 2, 259-274

Kamali, Narges and Suzanne Loker (2002), “Mass Customization: On-line Consumer Involvement in Product Design.” Journal of Computer - Mediated Communication, 7, n.4

Katerattanakul, P. "Framework of effective web site design for business-to-consumer internet commerce." INFOR 40.1 (2002): 57-69.

Kim, S., and L. Stoel. "Apparel retailers: website quality dimensions and satisfaction." Journal of Retailing and Consumer Services 11 (2003): 109-117.

Kotler, P. Marketing Management (Marketing Management Millennium edition. Alexandria, VA: Prentice Hall, 2000.

Kumar, Ashok. "From mass-customization to mass-personalization: a strategic transformation." International Journal of Flexible Manufacturing Systems 19.4 (2007): 533-547.

Kurniawan, S. Hartati, Richard H.Y. So and Mitchell M. Tseng (2005) “Customer Decision Quality in Mass Customization” Department Of industrial Engineering & Engineering Management, Hong Kong University of Science & Technology.

LaBarbera, P., and D. Mazursky. "A longitudinal assessment of consumer satisfaction /dissatisfaction: the dynamic aspect of the cognitive process." Journal of Marketing Research 20 (1983): 393-404.

Lee, Sophie h., Anttesh Barua and Andrew B. Whinston (2000), “The Complementarity of Mass Customization and Electronic Commerce”, Economics of Innovation and New Technology, 9, 2, 81-110

Liu, C., and K.P. Arnett. "Exploring the factors associated with Web site success in the context of electronic commerce." Information & Management 38 (2000): 23-33.

Loiacono, E., R. Watson, and D.L. Goodhue. "WebQual: a measure of web site quality." Marketing Educators' Conference: Marketing Theory and Applications 13 (2002): 432-437.

Madu, C., and A. Madu. "Dimensions of e-quality." International Journal of Quality & Reliability Management 19.3 (2002): 246-258. Manes, S. "Web Sites: Slow by Design?" InformationWeek 4 Aug. 1997: 124.

McDougall, G.H.G., and T. Levesque. "Customer satisfaction with services: putting perceived value into the equation." The Journal of services Marketing 14.5 (2000): 392-410.

Monroe, K.B. Pricing: Making Profitable Decisions. New York: McGraw-Hill, 1990.

Myers, J.H. "Measuring customer satisfaction: is meeting expectations enough?" Marketing Research 3.4 (1991): 35-43.

Nah, F., and S. Davis. "HCI research issues in e-commerce." Journal of Electronic Commerce

59

Research 3.3 (2002): 98-113.

Oliver, R.L. "A cognitive model of the antecedents and consequences of satisfaction decisions." Journal of Marketing Research 17 (1980): 460-469.

Oliver, R.L. "Effect of expectation and disconfirmation on postexposure product evaluations: An alternative interpretation." Journal of Applied Psychology 62.4 (1977): 480-486.

Oliver, R.L. (1997), “Satisfaction: A Behavioral Perspective on the Consumer,” New York: Irwin/McGraw-Hill.

Oliver, Richard L. and John E. Swan (1989), “Consumer Perceptions of Interpersonal Equity and Satisfaction in Transactions: A field survey approach”, Journal on Marketing, 53, 21-35

Oliver, R.L., and W.S. DeSarbo. "Response determinants in satisfaction judgments." Journal of Consumer Research 14 (1988): 495-507.

Palmer, J. "Web site usability, design, and performance metrics." information systems research 13.2 (2002): 151-167.

Perea y Monsuwe, T., B.G.C. Dellaert, and K. de Ruyter. "What drives consumers to shop online? A literature review." International Journal of Service Industry Management 15.1 (2004): 102-121.

Peterson, R.A., and W.R. Wilson. "Measuring customer satisfaction: fact and artifact." Journal of the Academy of Marketing Science 20 (1992): 61-71.

Piller, Frank T. (2003), “Mass Customization”, 3rd edition, Wiesbaden: Garbler

------ (2005), “Innovation and Value Co-creation: integrating customers in the value creation process”, Cambridge, MA

------ and Christoph Berger (2003), “Customers as Co-Designers,” IEE Manufacturing Engineer, August/September

------ and Kathrin Möeslein (2002), “From economies of scale towards economies of customer integration: Value creation in mass customization based electronic commerce”, Arbeitsbericht Nr. 31 des Lehrstuhls für Allgemeine und Industrielle Betriebswirtschaftslehre der Technischen Universität München

------ and Melanie Muller (2004) “A new marketing approach to mass customization”, International Journal of Computer Integrated Manufacturing, 17, 589-593

------ and Mitchell M. Tseng (2003), “New Directions for Mass Customization- Setting an agenda for future research and practice in mass customization, personalization, and customer integration,” in Mitchell M. Tseng and Frank T. Piller “The Customer Centric Enterprise: Advances in Mass Customization and Personalization,” New York / Berlin: Springer 2003.

60

------, Petra Schubert, Michael Koch and Kathrin Möslein (2005), “Overcoming Mass Confusion: Collaborative Customer Co-Design in Online Communities,” Journal of Computer-Mediated Communication, 10, 4

Pine, B. Joseph, II (1998), Mass Customisation – Die Wettbewerbsstrategie der Zukunft, Einfuhrung zu: Frank Piller: Kundenindividuelle Massenproduktion (Munchen/Wien), 1–17.Pine, Joseph B. (1993), Mass Customization, Harvard Business School Press, Boston, MA

Pine, B. Joseph. Mass Customization: The New Frontier in Business Competition. New York: Harvard Business School Press, 1992.

Pine, B.J., D. Peppers, and M. Rogers. "Do you want to keep your customers forever." Harvard Business Review 73.2 (1995): 103-114.

Pine, M.J., and J.H. Gilmore. The Experience Economy: Work is Theatre & Every Business a Stage. Boston: Harvard Business School Press, 1999.

Prahalad, C.K., and V. Ramaswamy. "Co-opting Customer Competence." Harvard Business Review 78.1 (2000): 79-87.

Prahalad, C.K., and V. Ramaswamy. "Co-creation experiences: The next practice in value creation." Journal of Interactive Marketing 18.3 (2004): 5-14.

Prahalad, Coimbatore K. and Venkat Ramaswamy (2004), “The Future of Competition: Co-Creating Unique Value with Customers,” Harvard Business School Press

Randall, Taylor, Christian Terwiesch, and Karl T. Ulrich (2005), “Principles for User Design of Customized Products”, California Management Review, 47, No 4

Reynolds, Kristy E. and Sharon E. Beatty (1999), “Customer Benefits and Company Consequences of Customer-Salesperson Relationships in Retailing,” Journal of Retailing, 75, 1, 11-32

Riemer, K. and Totz, C. (2001) ‘The Many Faces of Personalization - an Integrative Economic Overview’, in Mitchell M. Tseng and Frank T. Piller (Eds.) Proceedings of the World Congress on Mass Customization and Personalization MCPC 2001, Hong Kong

Rust, R.T., and R.L. Oliver. "Service Quality: Insights and Managerial Implications from the Frontier." In: Rust, Roland T. and Oliver, Richard L., Editors, 1994. Service Quality: New Directions in Theory and Practice Sage Publications.New York (1994): 1-19.

Sawhney, M., G. Verona, and E. Prandelli. "Collaborating to create: The Internet as a platform for customer engagement in product innovation." Journal of Interactive Marketing 19.4 (2005): 4-17.

Schreier, Martin (2006), “The value increment of mass-customized products: An Empirical Assessment and Conceptual Analysis of its Explanation,” Working paper, Journal of Consumer Behaviour 5/4, 317-327

Schroder, H., M. Driver, and S. Streufert. Human information processing. New York: Holt,

61

Rinehart and Winston, 1967.

Spangenberg, E.R., K.E. Voss, and A.E. Crowley. "Measuring the hedonic and utilitarian dimensions of attitude: A generally applicable scale." Advances in Consumer Research 24.1 (1997): 235-241.

Szymanski, David M. And Richard T. Hise (2000), “E-Satisfaction: An Initial Examination,” Journal of Retailing, 76 (3), 309-323

Thomke, Stefan and Eric Von Hippel (2002), “Customers as Innovators: a new way to create value”, Harvard Business Review, 80, 4, 74

Tseng, Mitchell M. and Jianxin Jiao (2001), “Mass customization,” In G. Salvendy (ed) Handbook of Industrial Engineering, 3rd edition (Chichester: Wiley), 684–709.

Urban, G.L., and J.R. Hauser. Design and Marketing Of New Products. Englewood Cliffs, NJ: Prentice Hall, 1993.

Vargo, S.L., and R.F. Lush. " Evolving to a New Dominant Logic for Marketing." Journal of Marketing 68.1 (2004): 1-17.

Venkatesh, V. "Determinants of perceived ease of use: integrating control, intrinsic motivation, and emotion into the technology acceptance model." information systems research 11.4 (2000): 342-365.

Von Hippel, Eric (1986), “Lead Users: A Source of Novel Product Concepts,” Management Science, 32, 791–805

------ (1998), “Economics of Product Development by Users: the Impact of ‘sticky’ Local Information,” Management Science, 44, 5

------ (2001), “User toolkits for Innovation”, Journal of Product Innovation Management, 18, 4, 247

------ and Ralph Katz (2002), “Shifting Innovation to Users via Toolkits,” Management Science, 48, No. 7

Voss, K.E., E.R. Spangenberg, and B. Grohmann. "Measuring the hedonic and utilitarian dimensions of consumer attitude." Journal of Marketing Research 40.3 (2003): 310-320.

Wolfinbarger, Mary and Mary C. Gilly (2001), “Shopping online for freedom, control and fun,” California Management Review, 43, 34–56

Wolfinbarger, M., and M.C. Gilly. "eTailQ: dimensionalizing, measuring and predicting etail quality." Journal of Retailing 79.3 (2003): 183-198.

Yi, Y (1990), “A critical review of consumer satisfaction”, Review of Marketing, 1990, American Marketing Association, Chicago, 68-12

62

Zeithaml, Valarie A., Leonard L. Berry and A. Parasuraman (1996), “The Behavioral Consequences of Service Quality,” Journal of Marketing, 60, 31-4

Zeithaml, V., A. Parasuraman, and A. Malhorta. "Service quality delivery through web sites: a critical review of extant knowledge." Journal of the Academy of Marketing Science 30.4 (2002): 362-375.

Zeithaml, V.A., A. Parasuraman, and A. Malhotra. "A conceptual framework for understanding e-service quality: implications for future research and managerial practice." Marketing Science Institute working paper (2000): Report No. 00-115.

Zeithaml, V.A. "Customer perceptions of price, quality, and value: a means-end and synthesis of evidence." Journal of Marketing 52 (1988): 2-22.

63

APPENDICES

Appendix A: Questionnaire

64

65

66

67

Appendix B: Print screen Design Skins

68