Managing service operations based on customer preferences

This article presents the results of a study using discrete choice analysis (DCA) in the dine‐in pizza industry. DCA offers an effective approach for incorporating customer preferences into operating decisions in service businesses. Our results show how customers tradeoff among several determinant attributes (e.g. price, waiting time, quality) when choosing a dine‐in pizza restaurant. The article also offers evidence that managers’ perceptions of customer choice patterns are not the same as customers’ actual choice patterns for the businesses we examined. Finally, we show how our results can be easily incorporated into a decision support system for structuring service operations according to customer preferences.

[1]  Abbie Griffin,et al.  The Voice of the Customer , 1993 .

[2]  R B Chase,et al.  Where does the customer fit in a service operation? , 1978, Harvard business review.

[3]  H. Timmermans,et al.  Stated preference and choice models applied to recreation research : a review , 1990 .

[4]  Jordan J. Louviere,et al.  A REVIEW OF RECENT ADVANCES IN DECOMPOSITIONAL PREFERENCE AND CHOICE MODELS , 1990 .

[5]  Michael R. Hagerty,et al.  The Cost of Simplifying Preference Models , 1986 .

[6]  Tigineh Mersha,et al.  Enhancing the customer contact model , 1990 .

[7]  Stephen E. Fienberg,et al.  Discrete Multivariate Analysis: Theory and Practice , 1976 .

[8]  Gary M. Thompson,et al.  Research: Discrete Choice Analysis in Hospitality Management Research , 1997 .

[9]  J. Louviere,et al.  The Role of the Scale Parameter in the Estimation and Comparison of Multinomial Logit Models , 1993 .

[10]  Jordan J. Louviere,et al.  Analyzing Decision Making , 1988 .

[11]  Jordan J. Louviere,et al.  Analyzing Decision Making: Metric Conjoint Analysis , 1988 .

[12]  S. Wheelwright,et al.  Restoring Our Competitive Edge: Competing Through Manufacturing , 1984 .

[13]  Joseph D. Blackburn,et al.  Time and product variety competition in the book distribution industry , 1991 .

[14]  Rohit Verma,et al.  Basing Service Management on Customer Determinants: The Importance of Hot Pizza , 1996 .

[15]  Virgil L. Anderson,et al.  Applied factorial and fractional designs , 1984 .

[16]  U. Wemmerlöv.  A Taxonomy for Service Processes and its Implications for System Design , 1990 .

[17]  P. Swamidass.  Empirical Science: New Frontier in Operations Management Research , 1991 .

[18]  Roger G. Schroeder,et al.  Operations strategy: A literature review , 1989 .

[19]  N. Anderson.  Foundations of information integration theory , 1981 .

[20]  Norman H. Anderson,et al.  Methods of information integration theory , 1982 .

[21]  Jordan J. Louviere,et al.  Configuring Service Operations in Accordance with Customer Needs and Preferences , 1999 .

[22]  R. Schmenner.  How can service businesses survive and prosper? , 1986, Sloan management review.

[23]  C. Lovelock.  Classifying Services to Gain Strategic Marketing Insights , 1983 .

[24]  Rohit Verma,et al.  Basing Service Management on Customer Determinants , 1996 .

[25]  D. McFadden.  The Choice Theory Approach to Market Research , 1986 .

[26]  Barbara B. Flynn,et al.  Empirical research methods in operations management , 1990 .

[27]  Mark M. Davis,et al.  How Long Should a Customer Wait for Service , 1991 .

[28]  J. Meredith,et al.  Alternative research paradigms in operations , 1989 .

[29]  W. H. Davidow,et al.  Service companies: focus or falter. , 1989, Harvard business review.

[30]  Deborah L. Kellogg,et al.  A framework for strategic service management , 1995 .

[31]  Richard B. Chase,et al.  The Customer Contact Approach to Services: Theoretical Bases and Practical Extensions , 1981, Oper. Res..