Measuring customer-oriented product returns service performance

AuthorChonlada Sajjanit, Nopadol Rompho
DOIhttps://doi.org/10.1108/IJLM-06-2018-0157
Pages772-796
Publication Date12 Aug 2019
Measuring customer-oriented
product returns
service performance
Chonlada Sajjanit
Department of Marketing, Faculty of Business Administration,
Kasetsart University, Bangkok, Thailand, and
Nopadol Rompho
Department of Operations Management, Faculty of Commerce and Accountancy,
Thammasat University, Bangkok, Thailand and
Center of Excellence in Operations and Information Management,
Thammasat University, Bangkok, Thailand
Abstract
Purpose The purpose of this paper is to conceptualise customer-oriented product returns service (COPRS)
performance, and develop and validate its measure.
Design/methodology/approach This study uses qualitative consumer interviews and a quantitative
survey to conceptualise, operationalise and validate the measure of COPRS performance.
Findings The findings indicate 12 components with 46 measurable items for COPRS performance,
including assurance, compensation, convenience, empathy, employee empowerment, explanation, feedback,
information availability, reliability, responsiveness, tangibles and timeliness.
Research limitations/implications The measure could facilitate future empirical studies in the product
returns service area. Future research could apply the COPRS performance measure across industries or in
different settings such as cross-cultural or other retailing contexts.
Practical implications Managers could evaluate their existing returns service performance in different
key aspects based on the COPRS performance metrics and then improve their returns offerings accordingly. It
also alerts practitioners to pay more attention to functional integration in designing returns service strategies
to enhance customer satisfaction.
Originality/value The study is one of the first to develop a new measure that substantiates the notion of
an integrated marketing and reverse logistics interface, which is an underrepresented body of knowledge in
the marketing and operations management disciplines.
Keywords Asia, Structural equation modelling, Reverse logistics, Customer service,
Performance measurements
Paper type Research paper
Introduction
Product returns management emerged as a significant management challenge over the last
few decades. Returns account for 550 per cent of products sold, depending on the business
sector (Daugherty et al., 2001; Genchev, 2007). Previous research indicates that managing
product returns effectively could enhance customer satisfaction, reduce costs, improve
profitability (Stock et al., 2006), build positive referrals and customer reviews (Minnema
et al., 2018), and lead to long-term customer relationships (Petersen and Kumar, 2010).
Although the fundamental processes of the backward flow of products starts from
unhappy customers (Potdar, 2009) and this process is one of post-purchase customer
support (The Supply Chain Council, 2001), existing literature in product returns
management focuses mainly on the firms process and economic operations (e.g. Agrawal
et al., 2014, 2018; Scariotta, 2003) instead of a customer-based and relational approach.
It is important to note that end customers initiate returns requests and customer
returns are legitimate (Anderson et al., 2009). All customers have reasons to return a
The International Journal of
Logistics Management
Vol. 30 No. 3, 2019
pp. 772-796
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-06-2018-0157
Received 22 June 2018
Revised 5 March 2019
Accepted 14 March 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
772
IJLM
30,3
product, and firms must provide a satisfactory returns service experience for customer
satisfaction and retention.
Notably, prior studies typically refer to reverse logistics when they examine product
returns (Stock et al., 2002; Stock and Mulki, 2009). Huscroft, Hazen, Hall, Skipper, and
Hanna (2013) argue that the existing research in reverse logistics does not provide a good
understanding of the key factors in customer needs in a reverse logistics process. Past
research into product returns and reverse logistics may not incorporate marketing concepts
(Bernon et al., 2013; Ferguson et al., 2006), though they emphasise coordination between
marketing and logistics efforts to improve product returns systems.
To manage product returns successfully, this study proposes an integrated interface for
marketing and reverse logistics. Accordingly, the study applies the marketing perspectives
of service-dominant (S-D) logic, customer orientation, customer expectations, service
recovery, and service quality to product returns management to propose a conceptualisation
and performance measure for customer-oriented product returns service (COPRS). Prior
works largely ignore metrics for reverse logistics focusing on customer satisfaction or an
effective returns process (Huscroft, Hazen, Hall, Skipper, and Hanna, 2013).
Unlike other services in traditional forward logistics, product returns service starts from
the point of destination (customers) and ends at the point of origin (suppliers). The key issue
in the product returns process and management is, therefore, the customer. Hence, the
specific performance measure of product returns service should be developed from customer
expectations or co-created by customers to enhance their satisfaction. Accordingly, the
purpose of the current study is to conceptualise COPRS performance, and develop and
validate its measure. Thus, this study addresses the following research question:
RQ1. How can CORPS performance be developed, measured and validated?
To answer the research question, the scope of product returns service in this study focuses
on services offered by a mobile company that receives returns from customers. The mobile
industry was chosen because Thailands mobile industry has been one of the fastest
growing industries in recent decades. There were 97.68m mobile subscribers,
accounting for 146 per cent of the total population in Thailand at the end of 2014
(NBTC, 2015). The mobile industry remains robust due to the continuing technology
development of wireless communications, the improvement in mobile devices in terms of
quality and variety, and the governments digital economy policies to develop broadband
infrastructure across the country (Ninkitsaranont, 2018). The mobile industry is a
dominant industry that faces product returns problems. Firms should focus more on
improving returns service performance to build superior competitive advantage amid
intensified domestic competition.
Literature review and theoretical background
Product returns and reverse logistics
The literature contains several definitions for product returns, but Rogers and
Tibben-Lembke (1998, p. 2) provide the most popular definition (Bernon et al., 2013): the
process of planning, implementing and controlling the efficient, cost-effective flow of raw
materials, in-process inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing or creating value or proper
disposal. This definition originally described reverse logistics. When scholars study
product returns they often refer to reverse logistics (Stock et al., 2002; Stock and Mulki,
2009). In other words, prior works often use both terms interchangeably. In this study, the
term product returnsrefers to the service operations of returns.
Specifically,this study focuses on the largest category of returns (Rogerset al., 2002) the
consumer returns that customers initiate. According to Rogers et al. (2002), a return with a
773
COPRS
performance

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