VALUE ADDED SERVICE AND ORGANIZATIONAL GROWTH USING CORRELATION METHOD. (A CASE STUDY OF COWBELL NIGERIA PLC)

CHAPTER TWO

REVIEW OF LITERATURE

INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

Precisely, the chapter will be considered in three sub-headings:

• Conceptual Framework
• Theoretical Framework and
• Theoretical Review

2.1CONCEPTUAL FRAMEWORK

Concept of Organizational Growth

Growth is not spontaneous. It is a consequence of decisions: decisions to hire or to not fire, decisions to increase output in response to demand, decisions to stimulate demand, and so forth. Relationships between specific decisions and ultimate expansion of the organization may be tenuous, but expansion necessarily depends upon some decisions and actions that follow them. These decisions are, in turn, functions of goals pursued by members of the organization. Thus, organizational growth can take place only if increased size relates positively to achievement of the organization's goals or goals of individual members of the organization (McGuire, 1963: 3).

This is not intended to suggest that organizations and their members make decisions that achieve desired outcomes. Organizational growth may work contrary to the interests of some, or even most, members of the organization. Growth may not be the best way to achieve goals it is intended to achieve. On occasion, growth may be a transient exploration of an organization's environment that, proving to be unrewarding, is subsequently abandoned. The point is simply that the growth of an organization is not a random event.

Increased organizational size may be a goal itself, in at least two senses. First, growth may be valued as a symbol of achievement. Growth is often difficult to accomplish because growing organizations must deal with intraorganizational stresses and overcome external forces. Society recognizes obstacles to growth and awards prestige and admiration to members of organizations that have expanded successfully, particularly those members who were instrumental in the expansions. These people also receive internal rewards in the form of feelings of success and pride in their achievement (Nourse, 1944). Second, increased size may be an operational goal, a benchmark for progress. The size of an organization is easily measured and easy to talk about – characteristics that recommend it as an operational goal. However, use of size as an operational goal does not necessarily mean that increases in size per se are valued. There is usually an implicit assumption that size correlates with attainment of goals having more basic relevance to the organization's purpose or holding more immediate interest for some organizational members.

By far the most widely accepted approach to growth has been that growth is either a means of attaining other goals or a side effect of such attainment, rather than an end in itself. The literature describes a number of goals that, with varying degrees of face validity, relate to growth. Ten of these are described here.

1. “Organizational Self-Realization”

To quote Katona (1951: 205-206):

... the going concern is commonly viewed as a living entity of itself. Self-realization of a business concern represents, then, a topic worth further study. A corporation is not conceived by its executives simply as an organization making money, or making automobiles. It has to carry out its functions, complete the tasks taken up, and expand to justify itself. It has been recently pointed out that here may be found one of the most important explanations of the fact that our large corporations are continuously expanding in diverse fields that are often foreign to their original activity. Small investments may be made, for instance, in order to study the use of by-products or waste products. When some progress has been achieved, the task once begun is pushed toward completion. There is a drive, perhaps even a compulsion to follow through after one has begun.

Newman and Logan (1955) summarized a round table discussion by 19 executives that came up with five reasons for growth, all of which have the aesthetic flavor of “self-realization.” The five reasons were: (a) Customers demand complete service, e. g., plants in all parts of the country. (b) Firms attempt to master their technologies, i. e., become vertically integrated. (c) Research laboratories develop products outside existing product lines. (d) In order to attract retail dealers, a manufacturer must offer a complete product line, e. g., all kinds of major appliances. (e) If firms do not expand, they contract; they cannot stand still.

In his review of Parkinson's Law, Galbraith (1957) remarked that bureaucratic expansion result from narrow specialization and a “tendency to create organizations on the basis not of need but of plausibility.” One wonders if this is not Katona's “self-realization” viewed cynically.

2. Adventure and Risk

Organizations may grow because executives like to gamble on new activities. Gordon (1945: 310-311) found that some executives are motivated by “the urge for adventure and for ‘playing the game’ for its own sake,” and one executive compared the desire to risk capital and effort on expansion with the compulsion that draws people to Nevada. This could explain why an entrepreneur who has reached a point of satiation with respect to wealth and power might continue to be aggressive. Within specific organizations, it may be a powerful motive, but it would be surprising to find that compulsive pursuit of risk was a major factor in most organizations.

More pervasive, perhaps, than pursuit of adventure and risk, is avoidance of boredom. Blau (1955) reported a study of civil servants in which boredom of personnel who had mastered their tasks favored change, and Argyris (1957) reviewed numerous studies with similar implications.

3. Prestige, Power, and Job Security

In addition to the prestige that follows from successful expansion, there is prestige attached to supervision of a large number of people. The more people an executive supervises, the greater the executive’s prestige. Ordinarily, this supervisory prestige accompanies some degree of power over the persons supervised, autonomy, and job security (subordinates being more expendable than their superiors are). Gordon (1945: 305-307, 311) stated that the urge for personal power and prestige is one of the most important nonfinancial motives of business executives, and Hanson (1961) found that superintendents of large hospitals have more responsibility relative to hospital boards than do superintendents of small hospitals.[ Also see Copeland, 1955.]

Parkinson is probably the best-known exponent of the prestige-power-security motive complex. He (1957: 4-5) wrote, “An official wants to multiply subordinates, not rivals,” and went on to explain:

… we must picture a civil servant, called A, who finds himself overworked. Whether this overwork is real or imaginary is immaterial, but we should observe, in passing, that A's sensation (or illusion) might easily result from his own decreasing energy: a normal symptom of middle age. For this real or imagined overwork there are, broadly speaking, three possible remedies. He may resign; he may ask to halve the work with a colleague called B; he may demand the assistance of two subordinates, to be called C and D. There is probably no instance in history, however, of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W's vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both. … When C complains in turn of being overworked (as he certainly will) A will, with the concurrence of C, advise the appointment of two assistants to help C. But he can then avert internal friction only by advising the appointment of two more assistants to help D, whose position is much the same. With this recruitment of E, F, G, and H the promotion of A is now practically certain.

5. Profit

Profit maximization has been the catchall motive in the traditional economic theory of the firm. Although this theory has been the center of considerable controversy, the notion that profit is a motive is not in question (Cyert and March, 1963; Penrose, 1959). As any perusal of business journals will confirm, business executives are concerned about profit and, other things being equal, prefer more profit to less.

One controversial characteristic of the theory of the firm is the assumption that profit is the only motive for business behavior. This assumption seems incredible, as there is much evidence that business executives pursue other motives in addition to profit. It is common now to find the theory of the firm stated in terms of utility maximization rather than profit maximization.[ For further discussion of business motives other than profit, see Berle and Means (1932), Cyert and March (1963), Gordon (1945), Hickman and Kuhn (1956), Katona (1951), Papandreou (1952), and White (1960).]

Even if firms ignore nonprofit goals like prestige, security, and so forth, one would expect to find firms pursuing goals other than profit as defined by financial statements. One reason is that accounting procedures often tell incomplete stories, either because there are distortions inherent in accounting “conventions” or because financial statements reflect the past more than the future. Most business managers try to look beyond financial statements when they set goals and evaluate performance and, in the process, may give functional autonomy to components of profit like overhead cost or advertising expense. Cyert and March cited six operational goals as being adequate to explain “most price, output, and general sales strategy decisions.” They are (a) the volume of production, (b) the stability of production, (c) the minimum finished inventory level, (d) sales volume, (e) market share, and (f) profit (1963: 40-43). Dent's (1959) study suggests a somewhat different list that is discussed below.

Profit, even if broadly defined as the difference between the value of services performed and the cost of these services, is not a major factor in the operation of nonprofit organizations like governmental agencies, hospitals, trade associations, or labor unions. One suspects that, over long periods and in informal ways, society assesses the “profit” from such organizations in that organizations that cost more than they are worth disappear. Churches are a good example; they depend on voluntary contributions and fail if the “take” is not sufficient. One theory of trade associations is that they operate on demand and cost variables outside the control of individual firms, and so maximize total profit to an industry. However, this may be a tautological statement. The “revenues” of such organizations, the value of the services that they perform, are only partially measurable and not in units directly comparable with cost: numbers of licenses issued, numbers of students in school, students’ average scores on scholastic achievement tests, numbers of complaints received. Therefore, attempts to construct all-inclusive measures of net yield are not very fruitful.

Adaptation and Growth

The presence of growth-oriented motives is not sufficient to produce expansion. For such motives to find expression in the organization's behavior strategies, they must overcome other motives that imply decreasing organizational size or maintaining the status quo. The ultimate behavior patterns arise from bargaining and problem solving in which motives that promote growth conflict with motives that inhibit growth.

An organization's environment stages this conflict and decides its resolution. The environment supplies the human raw materials and determines their mores and aspirations, their standards for the conduct of conflict, their attitudes toward authority. Even taking organizational personnel and their goals as given, the environment determines whether these goals can best be satisfied by expansion or by contraction. For instance, the relationship between profit and employment depends on the firm's demand and cost curves, which in turn depend on characteristics of the consuming population, actions of competing firms, available technologies, alternative markets for raw materials, and so forth.

Clearly, environmental effects are ubiquitous. One can say nothing about an organization without also saying something about its environment, and an organization's need for satisfactory interactive relationships with its environment is inescapable. For example, to attempt a thorough review of effects of geographic location on organizations would require another chapter at least as long as this one.[ Those interested in this literature should see BBRP (1958), Blau and Scott (1962: 199-206), Form and Miller (1960), and RERP (1959).]

This section discusses some specific determinants of an organization's ability to establish effective and viable relationships with its environment, to adapt. Adaptation is an obvious precondition for survival, and survival is an obvious precondition for growth.

Defining Value To The Customer And The Organization

Buying value

Customers do not buy products and services. They buy value – the total package of product performance, access, experience and cost. Organisations that understand how customers define value across these dimensions consistently achieve long-term profitable growth (Kothari & Lackner, 2006:243).

Value described

Value in its broadest sense can be described as “beliefs that are shared by the community and provide guidelines for how they would think, act and feel in a given situation” (Cant, Brink & Brijball, 2002:28).

Benefits versus costs

Buyers’ perceptions of value represent a trade-off between the perceived benefits of the service and the perceived sacrifice in terms of cost. Total cost to the customer includes more than the monetary price paid for the service. Other costs include time costs, energy costs and psychic costs reflecting the time and trouble the customer has to expend to acquire the service. Similarly, total customer value extends beyond product value and includes service value, personnel value and image value (Hoffmann, 2001:166).

Emotions and revenue

Shaw (2007:4) discovered through ground-breaking research in the UK and the USA that every organisation has a previously undetected “emotional signature” embedded in its customer experience and that it affects value generation. This signature is unique to every organisation and can be one of the underlying reasons for good or poor revenue performance. There is, therefore, an empirical link between evoking certain emotions and increasing or decreasing revenue.

Meaning of value

Value in an organisational or marketing context has three distinct meanings, namely price value, customer value and strategic value. Customers who buy products and services receive functional benefits (inherent to the product or service), social benefits (what customers want and that influence their decision making), personal benefits (inherent feelings of goodwill and satisfaction with the product or service), and experiential benefits (from using the product or service) (Cant et al., 2002:29-31).

Value derived

The “right” customer will derive value from faster deployment, seamless operations, a focus on core activities, fewer up-front costs, reduced support costs and decreased use of internal resources (Kumar, 2004:62-63). Solution providers create customer value by

helping customers increase revenue,

assuming customer risk and responsibility for part of the business, or

reducing the total consumption cost to the customer.

Although powerful solutions are successful in all three dimensions, most solutions have one of these dimensions as primary motivation.

Value defined

Customer value is created when customers’ needs and wants are fulfilled. Customer value can be defined as “the difference between all the benefits derived from a product and all the costs of acquiring those benefits” (Cant et al., 2002:30).

Strategic value

Value for an organisation is described as “that which the buyer is prepared to pay for the product or service” (Cant et al., 2002:30). Strategic value is defined as the process of meeting or exceeding the customer’s expectations pertaining to product, service and cost (Cant et al., 2002:30).

Differentiation and value

An organisation may decide on a differentiation, a focus or a low-cost strategy to create value for its customers. A differentiation strategy would imply providing a product or service that is completely different from any other. Customers would feel that they have bought a unique product, and experience a sense of value. A focus strategy would mean that the organisation serves only a small segment of the population and in this way provides exclusive value to its customers. A low-cost strategy would add value because customers pay less for the product than they expected (Cant et al., 2002:30-31).The most widely recognised understanding of value for customers is in the area of price value.

Adding value

Cant et al. (2002:31) state that the concept of adding value for the customer is widely discussed in the literature on customer behaviour but sometimes incorrectly interpreted. The only way to determine whether value has been added to the product or service the customer bought is to measure it. This implies finding out what value the customer expected from the product or service, developing a strategy to deliver this value to the customer, and measuring whether the customer’s expectations have been met or exceeded.

Value proposition

Payne (1994.29) argues that the value the customer receives from the supplier organisation is the total package of benefits derived from the “core product” and “product surrounds”, or the added values that enhance basic features such as service and support. The value the customer attributes to these benefits is in proportion to the perceived ability of the offer to solve whatever customer problem prompted the purchase.

This value may be calculated by utilising the value proposition concept and undertaking a value assessment – importantly, working from a customer perspective. There is acceptance of the need for a trade-off between delivering and extracting customer value.

Incorporating the customer’s viewpoint throughout the organisation is the essence of customer value management. The customer value management approach is designed to balance the demand for services and products with an infrastructure that is customer-centric, productive and profitable (Payne, 1994.30). This author says that customer value cannot be reduced to functionality versus price. Customer value is composed of both the functional and emotional benefits customers receive minus the financial and non-financial burdens they bear.

Types Of Value

1. Shaw (2007:121-122) argues that different types of value, ultimately founded on customer behaviour, produce revenue gains over time. Four types of value are relevant to long-term revenue growth, namely extrapolated value, incremental value, strategic value and social network value.

Customer value is therefore the summation of extrapolated, incremental, strategic and social network value.

Value and experience

Leavy (2004:11-12) comments that the business world seems marked by two paradoxes: consumers seem to have more choices that yield less satisfaction, whereas strategists have more options that yield less value. The experience-focused view of value innovation offers a way out. Individual customers seek not so much product variety as experience variety. It is a view that sees a product more as a value portal than a repository.

Leavy (2004:11-12) believes that the growing “disconnect” between the organisation’s view of value and the customer’s view of value is the driver of transformation. The emerging perspective has two building blocks, namely “experience environments” (the locus of innovation) and “experience networks” (the locus of competences). The most fundamental source of value according to this new perspective is the personalised experience of the individual customer and the quality of the interaction between the customer and the organisation. According to this new perspective, an experience network is “the infrastructure for effectively co-creating value through personalised experiences”.

The “shifting locus of innovation” and the “shifting locus of competences” (Leavy, 2004:12) implicit in the co-creation of value paradigm imply that organisations must think again about how to build strategic capital and differentiate themselves in the new competitive landscape. Strategy will no longer be a game of “knowable rules and finite options”. Organisations will have to “rethink the meaning of resources and how access to resources is obtained”. Organisations will have to learn how to design an internal social architecture, enabling managers “to personalise the way they want to experience the organisation, with a focus on co-creating value” (Leavy, 2004:12).

The only value an organisation creates is the value that comes from customers – current and future customers. Product quality, price and service all factor into a customer’s purchase decision. However, assuming the organisation is on par with its competitors, there must be other factors as well. To maximise the return on customers, the organisation must balance current profit from a customer and the long-term change in a customer’s value. Return on a customer is maximised at the point where the customer most trusts the organisation, as this trust leads to loyalty and advocacy (Peppers and Rogers, 2005:26-27).

To conclude this discussion of value, it is important to emphasise the fact that value to the customer and value of the customer need to be focused on simultaneously by organisations, and this will lead to optimal, sustainable value and a competitive advantage.

Concept of Value Added Services

Traditionally, Value Added Services (VAS) have been defined as enhanced services, which add value to the standard or core tele-services offerings like voice calls and fax transmission. Typical examples of value added services include call related services such as call waiting, call forwarding, multiparty conferencing, voice mail, other services like email, Short Messaging Services (SMS), Multimedia Messaging Services (MMS) etc.

Currently, various Application Services (AS) are also being provided through the electronic communications network. While services like SMS, MMS on mobile phones, and data access and call related services both on wire line and wireless were usually considered supplementary services, in recent years SMS, MMS, call related services and data access have become standard services. Many more applications and services are being offered on telephone and these services continue to evolve with changing technologies.

The term VAS continues to be used for all kinds of applications being offered through the electronic communications network. Since most of the services offered pertain to content or application services, the term VAS needs to include all kinds of content and applications provided on the electronic communications network apart from traditional value added services. VAS, therefore, include any service beside the basic voice, data and missed call notification services that is run on the Public Communication Network Infrastructure by entities who are licensed or registered by the National Communications Authority (“the Authority”). In other words, a ValueAdded Service (VAS) in the telecommunications industry is a term for non-core

telecommunication services apart from standard voice calls and fax transmissions.

Industry data collected by the Authority indicate that mobile subscription is over one hundred percent penetration as against the national population. Therefore, any new service can generate significant addition to Average Revenue Per User (ARPU). VAS is one of the main areas driving additional growth of the market with the introduction of new products. VAS has become an additional source of revenue for mobile network operators.

Mobile phones are mainly used for basic services, though the technology and the existing infrastructure can be utilized beyond the basic services for different non-voice value added and data related services. Presently, value added services like SMS, Caller Ring Back Tones (CRBT) and some mobile financial services constitute another source of revenue for the mobile telecom operators. Nevertheless, in different countries, both developed and developing, it has been observed that after the early phase of telecommunication growth, the non-voice services have become the major driver for growth in the sector. There are a plethora of application services like gaming, video and audio streaming, stock quotes, news, sports updates, tele-voting, chatting, etc. that are becoming popular. Each service differs in content, cost and demand and is customized for different segment of consumers.

The following services are defined as VAS:

1. Payment System Providers

2. Marketing- Premium billed contest, subscription services, group functions,

incentives and promotions

1. Advertising-Drive purchases to target markets

4. Commerce- Transaction fees for the redemption of coupons, point of sale

purchases and micro payments (Mobile Payment Systems.

5. Bulk Text messages, Picture messages, Ring tones, Graphics, Games, Mobile

Internet Sites, Videos, Multimedia, Call Directory and Call Centre services,

Mobile health, mobile insurance, etc. [include the provisions of the L.I.1991}

6. All Services using or depending on Short Codes (ie. SMS, MMS, USSD based

applications, etc.)

7. Special Numbering Service

8. Polls and Contests (i.e. e-voting, )

9. m-commerce (banking applications, mobile recharges, etc)

10. Intelligent Network (IN) Services ( i.e. Call divert, DNB, etc)

11. Color Ring Back Tone (CBRT)

12. Location dependent services, etc.

13. Vehicle Tracking Services

14. Machine to Machine Communication Services

Factors of value-added service towards customer retention.

Organizations create customer retention by offering the value- added services in many different forms. Several researches show that, customer retention positively leads the customer repurchase practice (Premkumar & Rajan, 2017). Therefore, value-added services are the key factors for bringing customer back. Organizations create customer retention by offering the value-added services in many different forms. According to Beatrix Gruber (2012), there are unlimited advantages that an organization can achieve from customer retention. These benefits include repeated purchase, cross selling, financial benefits and so on. He also added that, the retained customer is comparatively less price sensitive than the new one. Because, retained customer tend to be more loyal to the organization and the existing customer retention is 5 to 10 times less costly than new customer acquisition. Value added services mean, there will be additional value that makes it different from other basic service provider (M’itonga, 2019). According to Mohammad et al. (2020), due to the heavy competition for voice calling service and subscriptions, value added services are using as a tool to increase the revenue. He also added, value added services make differentiation and create needs and demand among the end users. To understand how the organizations provides the value-added services, following factors can be considered after thoroughly reviewing and screening the literature. These factors include many different theories that are directly connected with customer retention. The selected theories are customer Satisfaction, Service quality, new service and offering, Innovation, Loyalty program and Advertising and promotion. In order to emphasize and develop the customer retention for the organization these theories has been chosen to justify the statement.

1. Customer satisfaction

Customer satisfaction is the analysis of emotional develops when sentiment is oppose with customer primary feelings about the utilization and perceived experience (Al Karim, 2019). Customer satisfaction is the optimistic notion of the perceived value received from the service provider (Ogiemwonyi, et al. 2020). Customer satisfaction has an extended range of idea and its focus on the framework as a firm’s bottom line approach (Khatab, Esmaeel & Othman, 2019). The gap between the delivered service and the perceived service determine the satisfaction level and the post purchase situation creates the repurchase intention (Al Karim, 2019).

Dayang et. al., (2019), said that, customer satisfaction can described in much way but the ultimate aim is to meet the customer expectation level effectively and efficiently. Author also added that, the volume of service is equal the amount customer satisfaction for any distribution chain. Past study shows that, customer satisfaction determines the customer’s revisit to the service and it’s validating the long term relationship among customer and the service provider (Wu and Li, 2018). Solimun & Fernandes, (2018), state that, customer satisfaction increase the organization’s value and also help to retain customer. They also mention that, the service cost for attracting new customer is much higher than the existing customer.

1. Service Quality

The service quality can be defined as the multiplicity among end user’s anticipations and the organizations grasp (Li et al, 2021). According to Kotler, (2012), stated that, service quality can be calculated by the expected service quality and the consistency of the practice to meet the customer expectation. Customer’s projection of service quality can be measure by two factors, one of the factor are technical and another one is functional quality attributes (Hong, choi & chae, 2020). It is necessary to understand that service quality is a vital element for customer retention and organization that provide superior service quality are often successful to maintain good bonding with the existing customer (Zaid et al. 2020). Anil & Satish, (2019) explained that, service quality creates superiority in performance to thrilled the customer via working mechanism and improve the overall reputation of the organization in long term. According to Hasibuan (2021), the ultimate expectation of the customer is to consume the optimal service. Hence, the service provider must deliver the optimal service for receive the deal from the competitors who also provides homogenous product and services. Tran, (2020), founded the interconnection among service quality, perceived value, buying behavior. He described that, the service quality has great impact of purchased value and buyer behaviors towards the organization. Service quality is the gap between introduced services performance and their foretasting (Alam & Al-Amri, 2020).

1. New service and offerings

New service and offerings define the phenomena that see organization enhancing their service by adopting extra offers and heading from service – centric offerings towards the service zone (Zambetti, Pinto & Pezzotta, 2020). . The promotion of new telecommunication service bundle not only affecting revenue adjustment for the organization but also predict the perception of customer towards to the new service and offering (Purnamasari, et al., 2020). The main reason of an organization provides new service and offerings are connected to the keep the product trendy and manage to upgrade their performance in the competitive market (Zambetti, Pinto & Pezzotta, 2020).

However, organization provided new service and offering for serving several agenda, such as eliminating rivals provocation, financial stimulation and last but not least fulfilling customer demand (Opresnik & Taisch, 2015). Sumartha and Somopa, (2017), believe that, offering product or services that are less likely to be needed or necessary is a preliminary drawback of a new service or offering; it might lead a negative impact on the targeted customers mind. They also stated that, not all services and offers turnout a fruitful investment , which is known as service paradox.

1. Innovation

Rahomee & Aljanabi, (2020) state that, in order in compete the strong opponent, organization should implement different tools and technique to reach the customer demand. Several studies have proven that innovation capabilities can develop the competitive advantage and it has the power to oppress the value the rivals (Miocevic & Morgan, 2018). Innovation oriented organization can adopt different marketing strategy for formatting innovative services that has synergy with the existing services to prove ability to promote themselves in the market (Morgan et al., 2015). The author also stated that, innovation is the key component that shows the organization’s dynamic capabilities. The service provided to every client in many professional service firms is highly idiosyncratic. It means that, company will come to a large extent to provide a new solution for every new customer. The higher the level of tailoring to each individual customer with unique requirements, the more the company will be in terms of its limitation to replace and identify its proper solution. Therefore, because of such challenges, leading firms solely focused on idiosyncrasy will get it hard to impose strategic planning and control proposed in the conventional structure (Lowendahl, 1997).

1. Loyalty programs

In order to expand the customer retention matrix many firm use the loyalty programs by rewarding customer as an aim of getting repeat purchase from them (Yi & jeon, 2003).According to Bolton, Kannan & Bramelett (2000), in order to maximize customer retention metrics, leading firms utilize relationship marketing instruments to gain the customer loyalty that are also known as frequency reward programs and direct mailing. This can also refer to the reward for repeated purchase that builds customer retention. Bejou & Palmer (1998) argue that customer loyalty acquisition is becoming more frequent in several industries. The author also said that the goal of this kind of programs is to expand and increase customer retention in valuable target segments by delivering optimum satisfaction value creation for the end user. Different opinion has been received from the manager is that this program is increasing customer satisfaction to gain maximum profitability out of it (Bolton et al, 2000). The author also states that customer loyalty programs become more and more widespread across the globe. For example, the telecommunication industry, hospitality industry, transports industry etc.

1. Advertising and Promotion

According to Kajojo, (2019), advertising and promotion majorly use to introduce a product or services in the market. The author also added that, the advertising and promotion become an important and essential part to make a continuous growth for the organization. Waqar, (2020), believe that, for certain customer buying intention greatly influence and stimulus by the relevant advertising and promotion. He also added that, various technical instrument are using nowadays in advertisement to get the attention of the target customer, hence they need to invest more to produce more and more appealing advertising and promotion to understand customers like and dislike. A good advertisement has the power to create brand awareness and brand exposure and also it consider as the primary step to achieve the organizational goal in long term (Waqar, 2020). According to Tripathi, (2017), in this era of digitalization, internet is the best convenient way of advertising. The author also added that, the internet advertising and promotion should be design to catch the public emotion effectively and efficiently.

2.2 THEORETICAL FRAMEWORK

The Complexity Theory

Complexity theory is deemed to be particularly suited to the present study because this theory enables us to predict high or low scores of value added in the service industry by considering multiple recipes, and the conditions of various antecedents/actions (presence/absence of positive/negative role) that could affect the prediction (Olya and Altinay 2016).

Complexity theory is concerned with the behaviours of complex systems. It focuses on system interrelationships instead of system elements and draws upon the concepts from various fields of natural sciences in order to explain how complex systems emerge through the self-organising efforts of their interacting elements (Holland 1995; Kauffman 1995; Marion 1999). These principles have inspired many academics and practitioners in the fields of business management and marketing and thus provided them with a useful explanatory framework to better understand the behaviour of both organisations and value added as complex systems (Mitleton-Kelly 2003; Woodside 2015). Complexity theory can help capture a nonlinear view of the business world and argues that organisations and value added systems - as complex adaptive systems - are composed of a large number of diverse individual agents constantly acting and reacting to what the other agents are doing (Waldrop 1992). Non-linearity governs interactions among agents and small causes of the interactions among the agents may create large, unanticipated effects (Stacey et al., 2000). Understanding such complexity can help organisations and value-added systems develop creative and adaptive strategies that can mitigate undesirable consequences (Olya and Altinay 2016).

Thanks to its virtues, complexity theory has provided a solid foundation for building and testing theory in services marketing (see Gummesson 2008; Woodside 2014; Wu et al., 2014). In this context, as eloquently explained by Woodside (2014), a single antecedent is rarely sufficient (even though it may be necessary) for predicting a high or low score in a desired outcome.

2.3 EMPIRICAL REVIEW

In a study carried out by Drotskie (2010) on “Customer And Organizational Value Added Through Customer Experience Differentiation”, the study revealed that the customer experience is the interaction between customer and the organisation and should lead to value add. It is important though that value is added to the customer as well as to the organisation. The focus of this paper is first on what value is. The second part of the paper focuses on a measurement tool that was developed to measure the value to customer (VTC) and the value of the customer (VOC). The measurement tool is validated through application within a retail banking environment. By measuring the value to and of customers an organisation can determine if optimal value is added. The outcome of the measurement can be used by organisations to understand the customer value offering and the financial implications of value and establishing the relevant balance.