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The purpose of this paper is to follow a paper by Rexfelt and Hiort af Ornäs published in JMTM in 2009, which dealt with consumer acceptance of product service systems (PSS). This topic is important as it is a sustainable business model. It is proposed that the uncertainty consumers have towards the suitability of PSS to their needs can be further explored using existing management tools such as SERVQUAL, a tool to measure customer satisfaction and perceived quality.

This study, supported by the British Academy, utilized qualitative research on two types of respondents: businesses that can be classified eco‐efficient PSS providers; and consumers. The providers were administered structured in‐depth interviews, and the respondents are Mr Chas Ball, Director of Policy at Car Plus, a trade association representing car clubs, and Mr Jonathan Hampson, Director of Streetcar, the largest car club company. Car clubs may be considered a type of eco‐efficient PSS. Consumers were involved in four focus groups (20 participants in total). The questioning route used in the two focus groups focused the attention of the participants on two types of eco‐efficient PSS provision: one represented by car‐sharing services, such as the ones provided by City Car Club and Street Car, mentioned in section 2; the other was an hypothetical provision of a bundle of maternity equipment and services, such as baby prams, baby car seats, travel cots and similar. The inclusion of this “hypothetical” provision was inspired by a study conducted in Sweden by Mont et al.

Consumers are favourable to PSS provisions in principle; however they have concerns on whether this type of provision will live up to their expectations. These concerns are that the PSS might not perform satisfactorily in terms of its assurance, reliability, responsiveness, empathy and tangible components. The attractive aspect of PSS to consumers is as a “bundle” or products and services where the product can be replaced to accommodate consumers' needs. Business managers and policy makers will need to devise communications to reassure consumers that PSS provision meets the requirements set out by the SERVQUAL scale.

This paper identifies the applicability of a service quality measurement tool, SERVQUAL, to product service systems (PSS) and it extends the knowledge on consumers' acceptance of PSS.

Identify how value is created through a product-service system (PSS). Recognize the different types of PSS and their characteristics at an economic and environmental level. Design a business model for a PSS that allows to generate economic and environmental value in a sustainable way.

On October 15th of 2014, Javier Ramirez, Chief Executive Officer of Famoc Depanel, was in his office in Bogotá, Colombia, thinking about a decision he had to take. Either Famoc Depanel continued in the traditional office furniture market generating new lower-cost products, and continued facing the informal competition or the company risked accepting a new business that the National Tax and Customs Direction of Colombia (DIAN, the acronym according to its name in Spanish) had proposed and give its business a complete turnaround. Either way, he would keep his commitment to innovation and environmental care.

This case is appropriate for use in sustainability and entrepreneurship courses with contents about business models based on PSS. This case can be used at undergraduate and graduate levels. It is recommended that students have prior knowledge about business models and the Canvas Business Model methodology.

Teaching Notes are available for educators only.

CSS 11: Strategy.

Product as a service (PaaS) is a method of business innovation for traditional product companies to make their offerings more attractive, move up the value chain and find more customers. However, the customer acceptance of PaaS depends on the market in which it operates. The purpose of this study is to understand, through an automotive lease PaaS evaluation and from an outside-in user perspective, the effects of the main intrinsic and extrinsic factors of a product, its design and brand, on the lease versus buy decision of automobiles by consumers in an emerging market, to help companies transition to a PaaS business model.

A survey of actual car owners and lease car users was conducted. Confirmatory factor analysis was used to test the measurement model, followed by logistic regression for statistical modeling. As a practice evaluation of an existing PaaS example, this study further explored the expectations and experience of automotive lease users to link practical insights to analytical results and help businesses make a successful transition to PaaS.

The results of the study showed the effect of the brand as significant in lease versus buy decisions. Brand loyalty is more important when leasing than when buying a car. However, brand awareness/association is less important for leasing than buying. There was no significant difference in consumer expectations of product design in automotive lease PaaS. Customers who buy and lease cars have the same expectations of the overall product in terms of its key design attributes.

The literature on PaaS has mostly focused on strategies, frameworks and guidelines for implementation and empirical studies are limited. Comparative analyses between PaaS and traditional ownership models are also limited. It is unclear how consumers’ expectations differ between PaaS and traditional ownership models, especially in emerging markets, because PaaS’s success depends on the market in which it operates. This study addresses this gap in the literature.

The purpose of this paper is to advance the understanding of product‐service systems (PSS). It uses a multiple method approach to analyse literature and cases and synthesise a framework for the understanding and investigation of PSS. It demonstrates the need to consider the “organisation” or network, of firms involved in defining, designing and delivering value through the PSS. This is conceptualised as a product‐service‐organisation (PSO).

The paper uses three complementary methodologies: a road‐mapping analysis, investigating industrial challenges for collaborating enterprises, a multidisciplinary literature review of PSS concepts and analysis of two cases.

The paper finds that value can be most effectively delivered by networks of collaborating firms, integrating the products and services they offer to create the value which customers seek. In short, creating value requires the simultaneous design of product, service and organisation – the PSO triangle.

The paper offers a new classification of PSS related literature, drawing on a broad review of research in marketing, design and operations management related to service and PSS. The framework helps researchers understand the organisational challenges of PSS and provides suggested future research directions and questions.

The framework provides the foundations for a process to develop PSS. It highlights the organisational challenges and suggests that a systematic yet iterative process can be devised to create and deliver value. This means defining customer value which can be profitably delivered; designing the PSS to create this value and identifying the required capabilities; and finally creating and managing the network of partners responsible for delivering value.

The major contribution is a link between the emerging PSS literature and previous research on virtual enterprises and other types of organisational networks. The paper argues that PSS often creates the need to identify and access capabilities through a collaborative network. This is conceptualised in the PSO triangle.

In order to respond to the industrial trend towards service design and delivery, research must address a vast area partially related to value creation, marketing and network theories. However, compared to the space to be explored, there is little insight available. Thus, the purpose of this paper, as a first step, is to propose a way to frame such research.

An extensive literature review is performed of over 100 articles on product/service system (PSS) in general, service design, innovation, and business models in a broad view. Then, the analysis from the authors' viewpoint is carried out to give a frame.

The paper presents three crucial dimensions for service‐orientation research, i.e. an offer dimension representing products and services, a provider dimension, and a customer/user dimension. In addition, three research targets are proposed: PSS‐offer modelling, PSS development and PSS potential. Furthermore, several promising future research directions are identified. These include evaluating economic consequences or environmental benefits, establishing terminology, organizational issues, and developing methods and tools to support designers.

The paper presents a way of viewing research for service orientation, which contributes especially to further research in this area.

This study is a reference for manufacturers who are promoting their product-service system (PSS) development. Currently, improvements in both digital customization and sustainability for various smart PSS categories have been considered rarely. This paper addresses this research gap by developing relevant models.

The development trends of customization-oriented PSS are described in a literature review. An in-depth multiple-case study methodology is adopted, and seven manufacturing companies are sampled. The goal is to identify digital customization measures that can be employed on representative smart PSS models and to explore how these models can create sustainable value.

This study provides valuable insights by uncovering a synthesis framework for achieving customization of the product/use/result-oriented smart PSSs, and the relevant representative smart functions are summarized. This identifies how digital customization capabilities can improve sustainability, including direct economic value for customers as well as additional social benefits and environmental improvements during customization.

Currently, the influence of digitalization on customized offerings and the relevant impact on sustainability development have not been fully addressed to date. This study provides comprehensive information with a reference value for digital customization transformation among the three main types of smart PSS.

The purpose of this paper is to study service innovation in product companies (servitization) by considering the relationship (moderation) between product companies and service suppliers.

Using a relational view of the firm, the authors propose that there are three main business dimensions that product companies have to manage in servitization and that the support of service suppliers can moderate the effects of these dimensions on the benefits obtained from the product–service system (PSS) delivered. To test these hypotheses, the authors perform a cross-sectional quantitative survey in 104 Brazilian and Italian product companies.

The findings show that the three business dimensions are important for servitization while there is a trade-off decision regarding service suppliers’ support since suppliers act differently depending on the PSS orientation (product- or service-oriented).

The work is limited to the analysis of what should change in a company during servitization and the impact of supplier’s support. Further research is needed to complement this study by analyzing the process and context of the organizational change.

The research contributes an understanding about how the benefits practitioners can obtain from servitization are strongly influenced by the support of service suppliers and how this influence depends on the PSS orientation of the product company.

This is one of the first quantitative studies to provide evidence of how service suppliers’ involvement affects different servitization business dimensions and the obtained benefits for both product- and service-oriented outputs.