Reframing Customer Value in a Service-Based Paradigm: An Evaluation of a Formative Measure in a Multi-industry, Cross-cultural Context

Customer value has received much attention in the recent marketing literature, but relatively little research has specifically focused on inclusion of service components when defining and operationalizing customer value. The purpose of this study is to gain a deeper understanding of customer value by examining several service elements, namely service quality, service equity, and relational benefits, as well as perceived sacrifice, in customer assessments of value. A multiple industry, cross-cultural setting is used to substantiate our inclusion of service components and to examine whether customer value is best modeled using formative or reflective measures. Our results suggest conceptualizing customer value with service components can be supported empirically, the use of formative components of service value can be supported both theoretically and empirically and is superior to a reflective operationalization of the construct, and that our measure is a robust one that works well across multiple service contexts and cultures.