Showing papers in "Journal of Services Marketing in 2012"

The effects of dining atmospherics on behavioral intentions through quality perception

Abstract: Purpose – This study aims to identify how the perception of atmospherics in an ethnic restaurant setting influences customers' perceptions of service quality and food quality, as well as the extent to which perceptions of quality mediate the relationship between perception of atmospherics and customer behavioral intentions.Design/methodology/approach – This study conducted structural equation modeling (SEM) to test the mediating effects of quality perception, and also performed multiple regression analyses to identify the influences of specific environmental factors on quality perception and behavioral intentions.Findings – Perceived quality regarding services and foods had a partially mediating effect. Further, the indirect effect of perceived atmospherics on behavioral intentions through perceived quality was greater than the direct effect.Research limitations/implications – This study emphasized the important role of atmospherics on quality perception to induce favorable behavioral intentions, suggesti...

The relationship between employee satisfaction and customer satisfaction

Abstract: Purpose – This study aims to examine whether the relationship between employee satisfaction (ES) and customer satisfaction (CS) is bilateral or unilateral based on dyadic data In addition, it seeks to examine the role of moderating variables which have incremental impacts on this linkDesign/methodology/approach – The authors conducted an empirical test on this relationship in an educational service context Structural equation modeling was employed to test the hypothesesFindings – Results indicate that employee satisfaction leads to CS but CS did not affect ES, which suggests that the relationship between ES and CS is unilateral rather than bilateral The findings also demonstrate that the dispositional variables (ie self efficacy, cooperative orientation) moderate the impact of ES on CSResearch limitations/implications – This study provided theoretical implications for the ES‐CS relationshipPractical implications – This finding suggests that top level management in the service industry must take a

Gender and age as moderators in the service evaluation process

Abstract: Purpose – Prior research exploring the relationships among sacrifice, service quality, value, satisfaction, and behavioral intentions in service evaluation models did not consider customer characteristics. This study aims to test the moderating effects of two demographic variables (i.e. gender and age) on all the relationships in the “comprehensive” service evaluation model.Design/methodology/approach – Responses from a diverse group of shoppers (n=2,727) in six retail categories (cosmetics, electronics, fashion, jewelry, telecom services, and department stores) were examined using structural equation modeling.Findings – The negative relationship between sacrifice and perceived value, and the positive association of perceived value and satisfaction with behavioral intentions, is stronger for the male and older customers; whereas the positive association of service quality with satisfaction and value is stronger for female and younger customers.Research limitations/implications – The study examined behavio...

Fan identification, Schadenfreude toward hated rivals, and the mediating effects of Importance of Winning Index (IWIN)

Abstract: Purpose – The purpose of this paper is to explore potential negative outcomes of high fan identification as well as to identify the causal mechanism or mediator by which high identification may result in such negative responses.Design/methodology/approach – A scale development process was used to develop a new mediating construct for the fan identification literature, the Importance of Winning Index (IWIN). Structural equations modeling was used to analyze the surveys.Findings – The IWIN construct represents a new and distinct construct from fan identification. Additionally, IWIN mediates the relationship between fan identification and negative outcome behaviors, thus serving as an explanatory mechanism of when fan identification can produce negative behaviors (in this study Schadenfreude, or wishing ill/harm on rivals).Research limitations/implications – A student sample and limitation to one context of negative outcomes leaves opportunities for future research to assess the generalizability of these res...

Other customers in a service encounter: examining the effect in a restaurant setting

Abstract: Purpose – The purpose of this paper is to identify how the mere presence of other customers in a service encounter influences customers' evaluations of restaurant services.Design/methodology/approach – Phenomenological interviews were used to reveal the dimensions of other customers and to develop hypotheses on the moderating variables that influence the effect of other customers. A scenario‐based experiment was used to test the hypotheses.Findings – The analysis reveals that “other customers” is a multidimensional construct consisting of number, age, gender, appearance, attire, and public behavior. Also, the importance of each dimension varies according to situational variables such as evaluation stages (pre‐ versus post‐encounter stages), the context of a visit (task‐ versus recreational‐orientations), and the quality‐related risks (high versus low).Practical Implications – The study provides a rationale for service providers to strategically manage their customers. It also gives guidelines of how custo...

Intercultural service encounters (ICSE): an extended framework and empirical validation

Abstract: Purpose – This paper aims to extend the intercultural service encounters (ICSE) framework using role theory and information asymmetry perspective, to hypothesize differences in the strength of many relationships based on service role (customers versus employees).Design/methodology/approach – The paper presents the results of a field‐experiment with 204 restaurant employees and 241 customers in Hong Kong using a service failure scenario and photographs of Western versus Asian customers to manipulate perceived cultural distance.Findings – Perceived cultural distance has a stronger negative effect on inter‐role congruence, interaction comfort has a stronger positive effect on perceived service level and inter‐role congruence on adequate service level, for customers versus employees. Intercultural competence has a stronger positive effect on inter‐role congruence for employees versus customers, and it moderates the influence of perceived cultural distance on interaction comfort and inter‐role congruence.Resea...

The role of emotions in online consumer behavior: a comparison of search, experience, and credence services

Abstract: Purpose – The main objective of this paper is to compare consumers' online shopping behavior across three types of services (i.e. search, experience, and credence). Reviewing the marketing and psychology literatures, this study aims to propose that consumers' emotions (pleasure, arousal, and dominance) influence their perception of site atmospheric cues (site informativeness, effectiveness, and entertainment), which, in turn, impact consumers' site attitudes, site involvement, and purchase intention. It also aims to test the proposed model for three major types of services (i.e. search, experience, and credence) and to compare the path coefficients of all the relationships in the model across the three groups.Design/methodology/approach – Lab experiments were conducted for data collection and structural equation modeling was utilized for multi‐group analysis.Findings – The results supported the proposed model and revealed several non‐invariant structural paths across the three groups.Research limitations/...

In good and bad times: the interpersonal nature of brand love in service relationships

Abstract: Purpose – The purpose of this paper is to address two important gaps in the brand love and consumer‐brand relationships literatures. First, this study aims to investigate several interpersonal antecedents of brand love in a services setting. Second, this study also aims to examine the differential influence of the valence of the service delivery process and the way that brand love develops under qualitatively varied conditions.Design/methodology/approach – A between‐subjects experiment that varied the valence of the service delivery process (positive/negative) in a relational context was designed to examine the influence of interpersonal antecedents across service delivery levels on brand love.Findings – This study provides empirical support for the importance of interpersonal antecedents in driving brand love in service relationships. The results also reveal an asymmetrical pattern of effects between study variables across service delivery levels.Research limitations/implications – These findings can hel...

Motives of dysfunctional customer behavior: an empirical study

Abstract: Purpose – This paper aims to examine the associations between individual factors (personality and demographic variables) and contextual factors (servicescape and situation-specific variables), and the motives that drive episodes of dysfunctional customer behavior. Design/methodology/approach – Self-report data were collected from a survey of bar, hotel, and restaurant customers (n=380). Confirmatory factor analysis and hierarchical cluster analysis were utilized to analyze the data. Findings – Analysis of the data revealed three clusters of motives labelled: financial egotists, money grabbers, and ego revengers. Statistically significant differences were revealed across the personality, servicescape, and situation specific variables for each motive. However, no differences were found concerning demographic variables. Research limitations/implications – This research emphasizes the primacy of three customer behavior motivations. Future research might investigate the motives for dysfunctional customer behavior across different organizational contexts and the dynamics between such motivations. Practical implications – The findings of the study indicate that service managers can proactively control and manipulate servicescape and situation-specific variables that relate to customer misbehavior motives. Originality/value – No existing scholarly research has developed a data-grounded understanding of the motivations of dysfunctional customer behaviors. Moreover, to date, no study has explored the associations between customer's motives to misbehave and personality, situation specific, servicescape, and demographic variables.

Modeling customer satisfaction and loyalty: survey data versus data mining

Abstract: Purpose – The loyalty literature has investigated the association between customer satisfaction and customer loyalty and revealed mixed results. Some studies have indicated that the relationship is linear, whereas others have found it to be non‐linear. This study examines the nature of this association in retail banking, an issue that has not been tested empirically.Design/methodology/approach – A survey study examined bank customers' attitudes, perceptions, and behavior. Bivariate and multivariate testing was applied to develop two loyalty models: one based only on variables typically known to a bank, such as demographics and recent consumer behavior, and the other based on additional survey data.Findings – A non‐linear relationship between customer satisfaction and customer loyalty was found, and a model explaining 56.9 percent of the variation in customer loyalty was developed. Predictors of loyalty beyond the attitudinal dimensions traditionally tested for their association with loyalty were found to ...

The role of cause and affect in service failure

Abstract: Purpose – The primary purpose of this paper is to explore the role of emotions that consumers experience as a result of assigning causal attributions to service failures. The secondary purpose is to consider the effects of each of these emotions on behavioral outcomes.Design/methodology/approach – This paper extends the work of Wetzer, Zeelenberg, and Pieters regarding emotions and draws upon the existing literature to present a series of research propositions tying attributions to emotions and emotions to behavioral outcomes.Findings – When a service failure occurs, customers experience any of a variety of negative emotions. The particular emotional reaction depends on the customer's perception of why the service failure occurred in the first place. Behavioral outcomes associated with service recovery therefore depend directly on the negative emotion and indirectly on the customer's perception of the cause.Practical implications – To the extent that marketing managers can frame the cause of the service f...

Explanations: if, when, and how they aid service recovery

Abstract: Purpose – This study aims to investigate if, when, and how the use of four different types of explanations affect customer satisfaction after a service failure.Design/methodology/approach – The study used written scenarios of a hypothetical service failure to manipulate explanation type, failure magnitude and compensation offered. Participants were randomly assigned to read and respond to one version of the scenario, whilst imagining they were the customer experiencing the service failure.Findings – The paper finds that explanation type, explanation quality, failure magnitude and compensation each had significant effects on customer evaluations. Explanation type and explanation quality interactively affected the extent to which customers were satisfied with service recovery: Apologies and excuses yielded higher satisfaction levels than did justifications and referential accounts but only when the explanations were perceived to be of high (vs low) quality. Specific types of attributions and forms of justic...

Service loyalty: accounting for social capital

Abstract: Purpose – To the extent that customer relationships with service providers provide value to service firms suggests that these relationships can be viewed as social capital. This paper seeks to use social capital as a theoretical framework to examine the effect of these relationships on customer loyalty.Design/methodology/approach – Data were collected using an online survey of 342 adult consumers of services.Findings – Results of structural equation modeling analyses indicate that social capital variables explain unique variance in customer responses. The effect of each of the three forms of social capital – structural, cognitive, and relational – are contingent on whether the service is personal (e.g. hairstylist, medical services) or non‐personal (e.g. mechanic, banker).Research limitations/implications – This research suggests that customer relationships can be viewed as social capital and that the form and content of such relationships are important in terms of influencing customer loyalty.Practical i...

Problematic customers and turnover intentions of customer service employees

Abstract: – The purpose of this paper is to examine the effects of problematic customer behaviors on customer service employee attitudes and subsequent turnover intentions from the organization and also the occupation., – Data from five semi‐structured depth interviews and 215 quantitative surveys using structured questionnaires were used to develop and test the theoretical model. Customer service employees working in different call center companies serving American customers were approached using an established survey panel., – Results using the partial least squares (PLS) methodology showed that problematic customer behaviors drain customer service employees emotionally. Emotional exhaustion is negatively related to job satisfaction, and subsequently, employees' turnover intentions. The results also show that turnover intentions with organization and occupation are positively related to each other., – As regards implications, this study provides an understanding of the relationship between problematic customer behaviors and employees' turnover intentions. Future researchers can utilize the findings from this study for investigating other consequences and antecedents of problematic customer behaviors. A limitation of the study is its use of cross‐sectional data., – This paper provides call center managers with an understanding of the effects of problematic customer behaviors on employee attitudes. It discusses the need for understanding problematic customers and ways to manage the effects of such experiences., – The study investigates an under‐researched phenomenon, i.e. problematic customer behaviors. The study provides evidence of the relationship between problematic customer behaviors and turnover intentions in service employees. This study is also one of very few in marketing to investigate the relationship between organizational and occupational turnover intentions.

Frequency of CRM implementation activities: a customer-centric view

Abstract: Purpose – Customer relationship management (CRM) is considered a means to create competitive advantage for a company, as well as influence organizational performance. Much research has explored CRM users' point of view vis‐a‐vis successful CRM implementation, yet little concern has been shown regarding customers' viewpoints toward these same actions. This is surprising given that one of the beneficiaries of CRM is the customer. This paper aims to report the results of a study that explored the gap between actual bank CRM actions and customers' expectations of those actions in relation to CRM customers' intention to remain in the relationship.Design/methodology/approach – This study explores the gap between actual bank CRM implementation and customers' expectations of those actions in relation to customer retention using a survey method. A research model is presented to illustrate the theoretical relationships of the research.Findings – The findings indicate that an incompatibility exists between the inter...

An empirical assessment of consumers' evaluations of web site service quality: conceptualizing and testing a formative model

Abstract: Purpose – The objective of this study is to develop and test a specific conceptualization and modeling specification of web site service quality and the influence web site service quality has on e‐service provider loyalty and word‐of‐mouth.Design/methodology/approach – Data from an online survey of consumers across two studies were obtained.Findings – The results support the conceptualization and operationalization of web site service quality and its effects on word of mouth and loyalty.Research limitations/implications – Implications for the measurement of consumer perceptions of web site service quality are highlighted for researchers, and directions for future research are discussed.Practical implications – E‐service providers should carefully consider customer experiences on their web sites, and their management efforts to ensure they design and deliver the appropriate levels of service quality derived through the specific components of web site service quality.Originality/value – The findings are of ...

Service convenience and social servicescape: retail vs hedonic setting

Abstract: – While there have been numerous studies on the antecedents and consequences of service quality, there has been little investigation of the moderators of service quality. The purpose of this study is to demonstrate the effects of two moderators: service convenience and the social servicescape. The moderating effects are tested in two service settings: retail and hedonic (concert)., – A survey of 270 customers at kitchen display showrooms and 320 concert‐goers was undertaken. The results were analysed using regression analysis., – The results show support for ten of the 12 hypotheses. Service convenience moderated the relationships between perceived service quality and its three sub‐dimensions (interaction, environment, and outcome quality), differently in different settings (retail vs hedonic). This supports the authors' general argument that the outcome dimension tends to be more important to customers in a retail setting, while interaction and environment quality dimensions tend to be more important in hedonic service consumption., – These findings suggest that managers need to use different service management tactics in retail and hedonic service settings. Specifically managers in retail settings need to pay more attention to service convenience to achieve service quality and managers in hedonic settings should concentrate on the social servicescape., – This paper is the first to test the moderating factors of service convenience and social servicescape on service quality.

Developing a scale for measuring the personality of sport teams

Abstract: Purpose – The purpose of the study is to develop a reliable measure of sport team personality that incorporates the relevant dimensions/traits consumers attribute to their sport teamsDesign/methodology/approach – Initially, content analysis of sport teams' web sites and magazines were used to identify the items of the scale Following this a survey research method was used to gather data from consumers Exploratory and confirmatory factor analyses were conducted on a sample of 301 consumersFindings – The analyses of the data resulted in a sport team personality scale consisting of five dimensions: competitiveness, prestige, morality, authenticity, and credibilityPractical implications – Sport brand managers can use the scale for benchmarking purposes and for examining how their sport teams/brands are perceived by sport consumers in terms of the five dimensions identified in this researchOriginality/value – The study expands the concept of brand personality to sport services and provides insights into t

Performance effects of involving lead users and close customers in new service development

Abstract: Purpose – Customer involvement has been recognized as a key factor for successful service development. One important aspect affecting the outcome of new service development (NSD) projects in whose development customers are involved is the choice of the appropriate participating customer. This study aims to examine the effect of two customer characteristics (relational closeness and lead‐userness) on four indicators of new service performance.Design/methodology/approach – The paper uses data from 102 NSD projects. Covariance‐based path analysis is used to test the model.Findings – The results reveal that involving close customers in the NSD process has a positive direct effect on service advantage and speed to market and a positive indirect effect on market performance. The involvement of lead users, on the other hand, has a positive effect on service newness and service advantage, and a negative effect on market performance.Research limitations/implications – The focus on Spanish companies puts constraint...

Interactions and consequences of inertia and switching costs

Abstract: Purpose – Service research typically relates switching costs to customer loyalty, and portrays them as effective switching deterrents that engender harmful word‐of‐mouth (WOM). Rather than to customer loyalty, this paper aims to relate switching costs to consumer inertia, and show that while switching costs may result in customer retention, they can engender positive and negative WOM. This depends on whether the inertia stems from satisfaction or indifference.Design/methodology/approach – A mall‐intercept survey investigated 518 customers' perceptions of their mobile phone service providers. Structural equation modelling fitted the data to the conceptual model.Findings – Switching costs deterred switching and engendered negative WOM, but only with low‐inertia customers. With high‐inertia customers, retention and WOM behaviours depended on whether the inertia stemmed from satisfaction or indifference. Satisfied customers with high switching costs tended to stay, gave more positive and less negative WOM. Wi...

Factors influencing relationship development in franchise partnerships

Abstract: Purpose – This paper aims to identify and evaluate the factors which influence relationship development between franchisors and franchisees in international service franchise partnerships.Design/methodology/approach – Case studies of two international hotel firms were the focus of the enquiry. Interviews and document analysis were used as the data collection techniques.Findings – Findings demonstrate that role performance, asset specificity and cultural sensitivity influence relationship development in franchise partnerships. The influence of these factors, however, varies in different forms of franchise partnerships, namely individual and master franchises.Research limitations/implications – The findings are based on case studies in the international hotel industry and therefore may not be generalizable to other industry sectors.Practical implications – Service firms should adopt a systematic organization‐wide approach to, and management of, relationship development in franchise partnerships. In particul...

An extended service recovery model: the moderating impact of temporal sequence of events

Abstract: – The purpose of this empirical paper is to explore for the first time, in a temporal sequence of events framework, how the various forms of justice (procedural, interactional and outcome) impact on customer satisfaction with service recovery., – Employing scenarios, an experimental design was employed with data collected from a student sample in an Eastern collectivist culture (Thailand)., – The results reveal that affirmation of perceptions of all three forms of justice positively impact overall service recovery satisfaction. However, unlike previous models of recovery satisfaction, the findings presented here suggest a temporal sequence of events model involving the causal ordering of the three justice dimensions such that distributive justice mediates the relationship between procedural and interactional justice, and ultimate recovery satisfaction., – Based on the findings here, future studies using the three forms of justice should consider the temporal element and undertake longitudinal analysis., – The findings suggest that organizations should pay special attention to delivering high levels of interactional and procedural justice as they precede, and have an impact on, subsequent perceptions of outcome justice (i.e. compensation, re‐done work, etc.) in a service recovery situation., – This study adds to the knowledge on how firms can best recover from a service failure situation.

Overcompensating for severe service failure: perceived fairness and effect on negative word‐of‐mouth intent

Abstract: Purpose – This study aims to examine the perceived fairness of overcompensation for severe service failures. The mediating effect of perceived fairness in the overcompensation‐negative word‐of‐mouth (NWOM) intent relationship is also explored.Design/methodology/approach – An experimental design approach was utilized to test the study's hypotheses. Overcompensation amount was manipulated at three levels (50 percent, 100 percent, 200 percent of purchase price), with two forms of overcompensation (cash or credit) tested.Findings – Cash‐based overcompensation yielded higher perceptions of distributive justice than full compensation, with no significant difference in distributive justice perceptions across cash amounts. Credit‐based overcompensation was perceived as no fairer than full compensation. Perceived distributive justice fully mediates the overcompensation‐NWOM intent relationship.Research limitations/implications – The study's findings are based on a single service context. Further research across di...

The effect of on‐the‐spot versus delayed compensation: the moderating role of failure severity

Abstract: Purpose – The present study compares two types of compensation – i.e. on‐the‐spot and delayed – and tries to reveal how and when firms can utilize delayed compensation effectively. For this, failure severity is considered how these two types of compensation affect satisfaction and repurchase intentions.Design/methodology/approach – A scenario‐based experiment in the hotel and restaurant industries was used with a sample of 292 students.Findings – The results show that failure severity acts as a moderating variable in a recovery process of compensation‐satisfaction‐repurchase intention. The more severe consumers perceive the failure is, the more they depend on satisfaction to decide repurchase intentions. The two types of compensation are also moderated by failure severity on their effects on satisfaction and repurchase intentions. On‐the‐spot compensation leads to more satisfaction and repatronage intentions when failures are severe, but the results are not as straightforward when failures are insignifica...

Service receivers' negative emotions in airline and hospital service settings

Abstract: Purpose – The purpose of this paper is to examine service receivers' negative emotions in two different service settings, namely at an airport and in a hospital.Design/methodology/approach – A descriptive, convenience sampling survey method was used to collect data in South Africa consisting of a sample of 294 respondents at an airport and 288 respondents in a hospital. Data analysis included an exploratory factor analysis, and the results reported in this paper are based on the critical incident technique.Findings – The findings indicate both similarities and differences in service receivers' negative emotions between the two service settings. Furthermore, the results were found to be valid and reliable.Research limitations/implications – The results obtained pertaining to the negative emotions that service receivers experience in two service settings in South Africa may provide the foundation for further research and replication in other countries. Furthermore, the results can aid in refining and extend...

The determinants of consumer attitude toward service innovation – the evidence of ETC system in Taiwan

Abstract: Purpose – Innovation has attracted considerable interest in recent years in improving competitive advantage for both profit and nonprofit organizations. Service innovation offers the potential for substantially improving the performance, but performance gains are often obstructed by users' unwillingness to accept and use available systems. This research aims to use the concept of Reasoned Action Theory to further examine consumer attitudes toward service innovation and its antecedents.Design/methodology/approach – By focus group discussion and literature review, a conceptual model with six postulated hypotheses is proposed. The Electronic Toll Collecting (ETC) system launched by the Taiwanese government is selected as the service innovation to test the model. A structured questionnaire is designed to collect field data. The structural equation model with LISREL VIII program is used to estimate the structural coefficients and to test the hypotheses.Findings – The results show that perceived ease of use, pe...

Market‐creating service innovation: verification and its associations with new service development and customer involvement

Abstract: Purpose – The present study aims to develop a measure of the market‐creating service innovation (MCSI) proposed by Berry et al., verify the typology, identify the relationship between MCSI and each new service development (NSD) stage, and assess the degree to which the role of customers involved in each NSD stage contributes to each type of MCSI.Design/methodology/approach – A mail survey was sent to service companies in Taiwan, the target respondents being senior managers with experience in developing successful new services in the past three years. A total of 179 usable questionnaires were collected, resulting in a respondent rate of 21.2 per cent. The responses covered a wide range of service industries.Findings – The present study confirms that the four MCSIs proposed by Berry et al. do indeed exist in practice. The degree of association between each NSD stage and each type of MCSI varies according to MCSI type. The statistical weights for customers involved in each type of MCSI are also different.Res...

Servicescape interior design and consumers' personality impressions

Abstract: Purpose – The personality impressions evoked by service environments play a key role in attracting and retaining customers. This paper explores the interior design of service and retail environments, and links the designer perspective with the consumer perspective to assist managers in creating and managing interiors for achieving desired responses.Design/methodology/approach – The authors propose and test a conceptual model that relates types of interior design to consumer impressions of that environment's personality. Two studies establish holistic types of interiors based on design elements and factors with a sample of professionals, and then link those types to generic impressions evoked with consumers.Findings – Store personality relates systematically to five holistic types of interiors. Minimal‐shell interiors score high on unpleasantness, complex‐shell designs score high on enthusiasm, genuineness, and solidity, moderate‐shell interiors generate below‐average impressions of sophistication, genuine...

Evaluating digital piracy intentions on behaviors

Abstract: Purpose – The purpose of this paper is to assess how well digital piracy self‐report intentions predict actual digital piracy behaviors in service marketing research.Design/methodology/approach – Study 1 collects 321 surveys to investigate potential measurement issues related to digital piracy intention formation. Study 2 replicates Study 1 based on a separate sample of 267 respondents, and additionally links digital piracy intentions to directly observed digital piracy behaviors across a peer‐to‐peer network.Findings – The results first validate a strong predictive relationship between self‐report intentions and observed digital piracy behaviors (R2=0.36). Second, common method bias and measurement error do not appear to threaten the veracity of reported results. Third, a social psychological model of how digital piracy behaviors emerge is validated based upon the folk theory of the mind. Finally, a two‐dimensional conceptualization of frequency of past behaviors is identified based upon exploratory fact...

Creating new market for industrial services in nascent fields

Abstract: Purpose – In recent years, industrial firms have been moving from selling pure products to selling smart services. Yet limited empirical evidence exists about how the new markets for these novel services are created. This paper seeks to extend current theory and create new insights by studying the new services market creation process in nascent industrial fields.Design/methodology/approach – The authors' research design is a multiple‐case, inductive study that uses in‐depth archival and field data to track closely how five industrial firms created new market for new types of services.Findings – The authors find that firms adopt a holistic initiative to address the challenges in new services market creation. In particular, they use three interrelated strategies to create a new market: co‐creating with customers, innovating in different ways and exploiting institutional forces.Research limitations/implications – The study focused only on life science research services. Moreover, in‐depth field interviews we...