Compositional Offering as an Antecedent of Service and Financial Performance: Evidence from Pakistani Retail SMEs

Integrated solutions, which combine products and services to holistically meet customer needs, have been largely overlooked within the context of resource-based theories. Additionally, developing such solutions from a service-dominant logic perspective remains under-researched. This study addresses these gaps by utilizing composition-based theory as its theoretical lens to investigate the impact of compositional offerings on service and financial performance within Pakistani retail stores. A survey of 120 small and medium retail stores, analyzed using structural equation modelling, reveals a positive association between a firm’s compositional offerings and its service and financial performance outcomes. Furthermore, service performance mediates the relationship between compositional offerings and financial performance. The findings have significant implications for managers, who can use compositional offerings to enhance the service and financial performances of their businesses. Thus, compositional offering boosts financial performance by improving customer satisfaction, retention and brand image.