Consumer-app Relationships
A study on the strength of young
consumers’ relationship with their
smartphone applications
Master thesis |Cand. Soc. Service Management Copenhagen Business School
Gine Rosenberg Stauning Supervisor: Helle Haurum
May 17, 2016 Charlotte Gade Agerskov 253,022 characters (111 pages) 1. Executive Summary 4 2. Introduction 5 2.1. Problem Statement 6 2.2. Research Question 6 3. DAYFAIR Company Profile 6 3.1. The DAYFAIR app 8 4. Delimitation 9 5. Clarification of Concepts 10 6. Philosophy of science 10 6.1. Research Paradigm 10 6.2. Ontology 11 6.3. Epistemology 11 6.4. Hermeneutic Heritage 12 7. Theoretical Foundation 13 7.1. Service Dominant Logic 13 7.1.1. Critique of SD-Logic 17 7.2. Co-Creation of Value 18 7.3. Experience Economy 19 7.3.1. Definition of Experience 19 7.3.2. Origin of Experience 20 7.3.3. Pine & Gilmore´s Experience Economy 20 7.3.4. What is an App Experience? 23 7.4. The Concept of Self and the Extended Self 24 7.4.1. Technology’s Influence on Self 26 7.5. Brand Relationship Theory 28 7.5.1. The Concept of Anthropomorphization 28 7.5.2. Fournier’s Relationship Theory 29 7.5.3. The Brand Relationship Quality Scale (BRQ) 31 Interdependence 31 Love and Commitment 31 Partner Quality 31 Self-concept of Connection 32 Nostalgic Attachment 32 Commitment 32 Intimacy 33 7.5.4. Limitations of Fournier 33 7.5.5. Paradox of Technology 34 7.6. Diffusion of Innovation Theory 37 7.6.1. Word-of-Mouth Marketing 41 8. Methodology 42 8.1. Research Design 42 8.1.1. Mixed Methods 43 8.2. Selection of informants 45 8.3. Presentation of Informants 46 8.4. Interviews 48 8.4.1. Interview Guide 48
1 8.4.2. Type of Questions 48 8.4.3. Two Interviewers 49 8.4.4. Structure of the Interviews 49 8.5. Transcription 50 8.6. Thematic Network Analysis 51 8.7. Software versus Manual Transcription and Thematic Analysis 52 8.8. Validity and Reliability 52 9. Findings and Analysis 54 9.1. Informants’ General Relationship with their phones 54 9.1.1. Smartphones Disturb Physical Social Interactions 56 9.1.2. Smartphone Applications 59 Time spent on Smartphone Applications 59 Sources of App Discovery 60 9.2. Communication 62 9.3. Part of a Network/Community 64 9.4. Fear of Missing Out (FoMO) 65 9.5. The Brand Relationship Quality Scale 68 9.6. Interdependence 69 9.6.1. Love/Commitment 71 9.6.2. Partner Quality 74 9.6.3. Self-Concept Connection 75 “Likes” and the perception of self 76 9.6.4. Deletion 77 9.6.5. Nostalgic Attachment 80 9.6.6. Intimacy 81 9.7. Consumer Shopping Behavior and Preferences 83 9.7.1. Informants’ Shopping Behavior 83 9.7.2. What is a good deal? 85 9.7.3. The Importance of App Design 86 10. Discussion 88 10.1. From BRQ to ARQ 88 10.2. The Effect of WOMM Strategies 91 10.3. Characteristics Contributing to the Rate of Adoption 93 11. Conclusion 95 12. Suggestion for Future Research 96 13. References 98 14. Appendixes 110 14.1. Appendix 1: DAYFAIR – App design 110 The first App design 110 The second app design 111 14.2. Appendix 2: The Four Realms of an Experience (Pine & Gilmore, 1998) 112 14.3. Appendix 3: Typology of Consumer – Brand Relationship Forms (Fournier, 1998) 113 14.4. Appendix 4: Four Social Media Communication Strategies (Kozinets, et al., 2010) 114 14.5. Appendix 5: Survey 115 14.6. Appendix 6: Interview guide 119 14.7. Appendix 7: Fournier’s Brand Relationship Quality Scale (2008) 121 14.8. Appendix 8: The Brand Relationship Quality Scale with added sub-facets 122
2 14.9. Appendix 9: Transcription of Semi-Structured Interview 123 Informant A - Sebastian 123 Informant B - Charlotte 126 Informant C - Elisabeth 130 Informant D - Christina 133 Informant E - Lili 136 Informant F – Kean 140 Informant G - Casper 142 Informant H - David 146 Informant I - Daniel 148 Informant J - Kirsa 151 Informant K - Cecilie 154 Informant L - Maja 157 Informant M - Anna 160 Informant N - Jacob 164 Informant O - Joakim 168 Informant P - Andreas 170 15. Appendix 174 15.1. Appendix 10: Overview of identified themes 174 15.2. Appendix 11: Results from Survey 175 15.3. Appendix 12: Informants top-3 Smartphone Applications 186 Prio 1 186 Prio 2 186 Prio 3 187 15.4. Appendix 13: Sub-facets chosen by informants (top-3) Prio 1-3 188 Prio 1 188 Prio 2 195 Prio 3 201 15.5. Appendix 14: App Relationship Quality (ARQ) 208
3 1. Executive Summary
We’re living in a technological society where consumers increasingly enjoy great comfort of the advancement within technology. Especially, smartphones have become a vital part of consumers’ lives, always being within arm’s reach. Consumers have become dependent on their smartphones as they provide a wide range of advanced functionalities and services. Studies show that 90% of the time spent on these devices is dedicated to apps, a hyper-competitive market that continues to grow at unprecedented pace (Chin, 2015; Eddy, 2016). Guided by a general curiosity of what drives and determines young consumers’ relationships with these apps, this thesis aims to identify the key facets behind young people’s relationship with their smartphone applications.
Prior studies show that consumers can attribute brands with anthropomorphic characteristics and develop relationships with these (Fournier, 1998; Blackston, 1993). In general, the marketing discipline has undergone a paradigm shift by having gone from a transaction based orientation to a relationship orientation. However, with smartphone applications being a relatively phenomenon not much yet exist on consumers’ relationships with these. Thus, this thesis develops a measurement scale for evaluating the quality and strength of consumer-app relationships. Fournier’s (1998) work on brand relationships was used in identifying the dominant dimensions of brand relationship quality.
Methodologically, we applied the technique of triangulation as our empirical data was collected through a quantitative survey with 260 respondents and 16 qualitative, semi-structured in-depth interviews with young Copenhageners in the age 15-30 years old. Through this method we gained significant insight and identified six main facets of consumer-app relationships; interdependence, commitment, partner quality, self- connection, intimacy versus intrusiveness and FoMO (fear of missing out). Combined they constitute our proposal for an app relationship quality scale (ARQ) These facets can be individually present, however, if they are all present there’s a greater chance of building a strong consumer-app relationship.
Especially, young consumers’ FoMO and their need to be part of a network/community and express who they are (both their actual and ideal self) prevails in explaining the strong relationship they have formed with certain apps. Contrary to Fournier (1998) who believes consumer-brand relationships to resemble interpersonal relationships, we found this not to be the case with consumer-app relationships, mainly due to the participating informants’ lack of deep affective feelings towards apps and the fact that they do not perceive apps to be living entities. Consumer-app relationships are thus not directly analogous to interpersonal relationships.
4 2. Introduction
Over the course of a few years, especially with the advent of smartphones, phones have become significantly integrated into our lives. They have changed not only how we communicate and how we’re social but also redefined our perception of time and accessibility (Roberts, 2016). With smartphones also came smartphone applications, a market that is growing exceptionally fast (Eddy, 2016), and which provide consumers an unlimited range of apps offering everything from entertainment to task facilitation. Consequently, our phones have developed from being simply a means of dyad communication to an all-encompassing device that grant us constant access to information and social networks and allow us to perform daily tasks with only the tap of a screen. They have become virtually indispensable in today’s fast-paced world, always being within arm’s reach (Certeza, 2014). Consumers are seemingly in a strong relationship with this incl. their applications.
The integration of apps in consumers’ lives have led to symptoms of addictiveness for some and popularized the phenomenon FoMO (Fear of Missing Out). FoMO occurs when consumers feel anxiety because they feel they are missing out on something and not keeping up with what’s going on, which may lead to a compulsive concern about being excluded (Busch, 2016). Even if wanting to, most consumers have troubles reducing their use of apps as they seem to have formed relatively strong relationships with these. For better or worse smartphone applications seem to have become, and probably will remain, an important part of consumers’ lives. But, what drives these strong consumer-app relationships?
This thesis was originally inspired by an app developed by the Danish company DAYFAIR ApS. When the thesis process started the DAYFAIR app was still active and trying to make it in the intense, saturated and hyper- competitive market. However, during the thesis process DAYFAIR decided to temporarily withdraw the app due to poor penetration and feedback from users. This inspired us to research why DAYFAIR did not become a success and what drives consumers’ relationship with an app. Through our research we have explored young consumers’ relationships with their existing apps to try to understand their needs, expectations to and what drives these relationships.
Taking an offset in Fournier’s (1998) relationship theory and brand relationship quality scale we set out to identify some of the key facets of consumer-app relationships. The thesis concludes with our proposal of a conceptual model for an app relationship scale, based on modifications applied to Fournier's BRQ scale, and a discussion of the interpersonal relationship analogy in regards to apps.
5 2.1. Problem Statement
There exists extensive literature on consumers’ relationships with brands and plenty of tools marketers can use to create, maintain or measure these. Through the last 20 years, the subject of young consumers’ use of mobile phones has also been researched a great deal. However, since smartphone applications are a relatively new phenomenon not much research has been done yet on consumers’ relationship with these, not least a measurement scale for the strength of consumer-app relationships. Being a fast growing market that is expected to continue to grow, we find it interesting to investigate what relationship facets typically qualify the strength of consumer-app relationships, and thus which facets an app ideally should try to accommodate. Given that young consumers are perceived to be so- called digital natives and the most addicted users, we limit the research to young Copenhageners between 15-30 years (cf. 4.)
2.2. Research Question
RQ: Which key relationship facets determine the strength of consumer-app relationships?
Sub-RQ1: What are the main tendencies in consumer behavior of young Copenhageners in regards to their use of smartphone applications?
Sub-RQ2: How can Fournier’s (1998) brand relationship quality scale be applied to consumer-app relationships?
3. DAYFAIR Company Profile
To give the reader an insight into the app that inspired this thesis, a company profile of DAYFAIR is presented in the following. Given that DAYFAIR ApS is a small startup with no official company profile or much other public company information available, the following company profile is based on an interview1 with the two founders in January 2016. As the company profile was developed before DAYFAIR paused the app, it is written in present tense.
DAYFAIR ApS is a Danish mobile app company founded in January 2015. The company provides a service that combines shopping with a social platform where consumers can connect and share experiences and recommendations using their smartphones. The company delivers this service through a self-developed free
1 The audio file is available on the USB drive attached to the thesis
6 smartphone application which is focused on consumers and their fear of missing out (FoMO). Essentially, it exposes offline marketspace to the customer through a mobile platform. Its main purpose is to revitalize the local environment by bringing consumers back to the offline stores in an age where online shopping is gaining ground incredibly fast (Ruddick, 2015). Through the DAYFAIR app retailers can entice consumers to visit their store(s) by showing new arrivals or offer good discounts that can only be redeemed by showing the DAYFAIR app. For consumers the DAYFAIR app offers a social mobile-based platform where they can share bargains, interests, opinions and what “their city”, as they experience it, has to offer. The idea is that consumers would want to share if they stumble across a good deal or something else they believe others would value. Like other social media platforms, users are able to follow each other for inspiration and build a profile that shows who they are expressed through their posts. The target audience is primarily generation Y and generation Z (15-35 year-olds) as these generations consist of digital natives to whom being connected and tech savvy is part of their DNA (Merritt & Neville, 2002) while their often limited income may also influence their appreciation of good deals.
The company is a privately held startup that has raised several rounds of funding from investors who liked the concept and saw great potential in the app. However, with investors also came ideas and requests that these would like to see implemented in the app, if they were to support it. This resulted in an intricate DAYFAIR app with too many functions bewildering the users which may have been one factor in a disappointing amount of users adopting the service. Thus, in January 2016, a year after the DAYFAIR idea was conceived, the app was redesigned due to poor penetration, lack of engagement from the low number of users (approx. 6,200) and adverse feedback. The new design included simplification of the app along with incorporation of ads as the company needed an extra income source if it was to survive. Essentially, the company went back to its original idea before it was sidetracked by others, namely, a simple app reflecting the idea of “Tinder for tilbud”2.
The app only delivers content from Copenhagen and, so is primarily of interest to people in Copenhagen. However, if DAYFAIR is successful the ambition is to expand to other cities in Denmark and subsequently bringing the app abroad. The goal is to reach 100,000 users in Denmark by the end of summer 2016. In terms of similar value proposition to the consumers, DAYFAIR’s direct app competitor is the American multinational corporation, Yelp, which help people find local businesses by publishing crowd sourced reviews. However, Yelp is not (yet) a big contender in the Danish market and, thus, not a big concern or threat for DAYFAIR at the moment, but of course needs to be considered if DAYFAIR at some point expands internationally. Other
2 See Appendix 1
7 than Yelp, the two founders don’t see any direct competitors in the Danish market, but are aware of DAYFAIR’s similarities to other apps, most prominently Instagram. So, it’s not so much that the founders saw a clear gap in the market, but rather that they saw an opportunity for doing things in a different, more exciting way.
DAYFAIR ApS is founded by Henrik Ravn and Morten Viktor, two personal friends and former colleagues. Both are experienced businessmen, with Morten Viktor being the former CIO and COO at Berlingske Media and Henrik Ravn was the Lead Developer at Trustpilot and IO Interactive. In January 2016, DAYFAIR employed five full time employees and 12 part-time employees. The company culture is characterized by egalitarianism and the owners focus on building an open and creative work environment, where there is room for new ideas and personal development. It’s a deliberate choice by the founders that DAYFAIR doesn’t have an official mission and vision statement. Being as small as they are at the moment they believe that their actions and personalities translate more what kind of culture and company they aspire to create than any written statement could ever do.
Later note: Three months after this interview was conducted (April 2016) the two founders decided to temporarily withdraw the DAYFAIR app from the market due to poor penetration and feedback from users along with financial issues. The founders will use the remainder of 2016 on a creative and less stressful brainstorming process for further development of the app and focus on a relaunch of a new app with a better concept and business model in early 2017.
3.1. The DAYFAIR app The relaunched DAYFAIR app (January 2016) is a social network platform. It’s build like the app Tinder, where users can swipe left or right according to whether they like or dislike what they see. Instead of potential romantic matches the users are presented with offers and good deals from nearby businesses as the app uses the GPS tracker in smartphones. In addition to this, users can also browse different categories or search for specific brands, offers, users, stores, events etc.
Like other social platforms, every user has their own profile where they can share pictures of offers or events they found in the city. They can also see how many points they have earned. To collect points, they have to like, share or comment on other users’ recommendations and content i.e. engage with the content. Points can result in surprises such as presents, special offers or other surprises, all of which is administered by DAYFAIR.
8
The app has replicated different known features from already existing apps like Tinder, Instagram and Facebook and yet still holds a unique value proposition. The content is created by users, subscribed stores3, DAYFAIR’s street team4 and content partners. However, all content is controlled and managed by staff at DAYFAIR who has to approve content before other followers and “friends” can see it. This is a screening process to make sure no inappropriate content enters the app. The subscribed stores can either sign up for a free account where they can have three posts up at the same time, or a premium account where they can post unlimited.
4. Delimitation
There are several limitations to this thesis. First, we only set out to identify young Copenhageners’ relationship with their smartphone applications. Restricting the study to focus on Copenhageners is a natural consequence of the researchers being residents of Copenhagen, and so mainly a question of facilitating the process of data collection. That we have further limited the study to young people aged 15-30 years old is primarily because this age group is the target group of DAYFAIR, but also because people in this age group are believed to be the ones using their phones incl. smartphones applications the most, and thus most likely to generate interesting and valuable insight in this matter. Possible gender differences will not be taken into account.
While one may be able to draw parallels between the tendencies of young people from Copenhagen and other big cities (for instance Aarhus and Odense), there may be significant differences when moving outside the big cities. This means that our findings are mainly limited to young people from Copenhagen.
Another limitation of the findings concerns the number of informants. It is a debated issue how many participants are needed in qualitative research. The findings from this study will not necessarily be representative of all consumers but may nevertheless reveal plausible relationships between young people and their smartphone applications. Further strengths and weaknesses of the method applied will be elaborated upon later (cf. 8.)
3 Stores like for instance Matas, Q8 and Føtex has subscribed and gotten an account where they can post new products, good discounts, happenings etc. to the DAYFAIR users and communicate directly with these in regards to availability of items. 4 12 teenagers who were scouting offers in stores and posting them in DAYFAIR to notify the users of good deals and new arrivals.
9 5. Clarification of Concepts
Community/Network: In the lack of a better term describing the Danish word “fællesskab”, these two will be used interchangeably to refer to this term. Offline shopping: Shopping that takes in the traditional physical stores as opposed to online. Offers/deals: These two words will be used interchangeably and both cover the Danish word “tilbud”. Physical social setting: As the term “social setting” nowadays also can refer to online social settings, we have chosen to add the word “physical” when talking about offline real world social settings, in order to avoid any misunderstandings. Smartphone applications: With this term we refer to the smartphone applications which consumers have actively downloaded to their phone, and not the ones that are pre-installed on the phone before purchase. A distinction we also asked our informants to keep in mind during the interview process. We assume, that consumers may have stronger relationships with the apps they have actively and voluntarily chosen to download.
6. Philosophy of science
In the following we will present and explain our philosophical assumptions and the beliefs based upon which we generate knowledge as researchers. The purpose of explaining our world-view and the foundations upon which we draw our conclusions is to help the reader interpret our findings and conclusions, and evaluate the applicability of these to other areas.
6.1. Research Paradigm This thesis follows the paradigm of social constructivism, where reality and our knowledge of reality is a social construction (Rasborg, 2013). This philosophy stresses that knowledge is constructed in interaction with others. Each individual is shaped by his or her experiences and interactions with others. All of these experiences or interactions are transmitted into our schemata and contribute to the shaping of our perspectives and behavior (Elliot, 2009). Thus, social constructivism perceives reality, or at least the individual’s perception of reality, as a social construction, and the individual’s perception is consequently subjective. This stands in contrast with positivism which believes in objective truth independent of the individual (Rasborg, 2013). Essentially, social constructivism is an anti-realist, relativist stance.
10 6.2. Ontology
Following the social constructivist paradigm, our ontology is one of relativism, since our perception of reality is a product of social interaction between individuals and our subjective interpretation. Ontology concerns what exists and what is real and in social constructivism reality does not exist as meaningful or an absolute truth separated from human beings. Hence, reality is actively constructed and not merely awaiting to be discovered (which also makes the distinction between ontology and epistemology within social constructivism somewhat blurred) (Guba & Lincoln, 1994). The perception and thinking about the world may be individual, but the construction process involves other social actors which means that the reality perceived by individuals is constructed in the interaction between these others. Thus, according to social constructivism there do exist an external reality and world “out there”, however, it will not be meaningful to us unless it is socially constructed. We human beings have no direct access to it, we simply cannot access it in an objective and unambiguous manner because our general approach to the world is dependent on our preconceptions of it. Consequently, we can only access representations of the world in our consciousness (Waters, 2010). For instance, take the color pink. How do you know how this “looks” to another individual? All human beings possess the same physical apparatus e.g. how we capture reflected light on our retina, but the color pink is something we construct in our consciousness and must be unique to each of us (Harman, 1996).
6.3. Epistemology From our ontological viewpoint that reality, and the perception of this reality, is created in the interaction between individuals and through subjective interpretation, it follows that truth is dependent on the eyes of the beholder (Berger & Luckmann, 1966). Consequently, the epistemology of social constructivism is subjectivist. With its roots in relativism, the subjectivist approach holds that knowledge cannot exist without individuals to construct it. It perceives knowledge to be essentially subjective with each individual constructing their own world in a unique way based on their background, preconceptions, external forces and their surroundings affecting them (Guba & Lincoln, 1994).
As we have generated knowledge during the process of this thesis, we ourselves have constructed the perspective from which we have regarded reality. The reality we have constructed might not be the reality others would construct if they applied the same methodology and, thus, it is not perfectly reproducible. Consequently, the knowledge we have generated cannot be viewed as an absolute and fixed truth. However, when operating within the paradigm of social constructivism the scientific objective is not that of generating absolute truths, but rather that of generating rational knowledge which explicitly recognizes that it has been created within a reality that is socially constructed (Rasborg, 2013).
11
Furthermore, within social constructivism, a construct is never rigid but can at any time be given a new meaning through social interaction and interpretation. Nevertheless, Rasborg (2013) argues that some constructs can cut their own umbilical cord and eventually be perceived as being objective facts. Berger and Luckmann (1966) refers to this as the concept of reification. One example is the dominant perception that has prevailed since the industrialization, namely that companies produce goods which consumers buy and consume i.e. the Goods Dominant logic (G-D logic). This clear distinction between production and consumption within the G-D logic has also defined the company-consumer relationship. Within this view, companies produce the goods with embedded value and consumers merely act out a passive, predetermined role of buyer and consumer. This production and company-oriented perspective emphasizes value delivery where the provider i.e. the company is assumed to solely control the value-creation (Grönroos & Voima, 2013). Despite this perception slowly dissolving with the recognition of the value of co-creation, many business people still possess the deeply entrenched goods-dominant logic mindset. However, Vargo & Lusch (2008) argue that the focus of exchange and the company-consumer relationship is changing. The matter is currently being heavily discussed and the company-consumer distinction may in the future completely lose its status as an objective construct.
6.4. Hermeneutic Heritage
As we ourselves are contributing to constructing reality through the process of writing this thesis, we cannot disregard our existing knowledge, prior experiences and preconceptions and the effect this have on our generation of knowledge. Consequently, our interpretations will not be objective but affected by our experiences and knowledge, which relate heavily to the philosophy of hermeneutics (Gadamer, 2013). The central premise in hermeneutics is that our interpretation of the world cannot be separated from our preceding experiences and existing knowledge (Højbjerg, 2004). The conclusions we draw will therefore be profoundly influenced by the context which we are in, along with our knowledge and experiences. Basically, our conclusions will be influenced by our preconceptions and prejudices, and accordingly, they cannot be readily applied to different contexts without some consideration and reservations.
However, as stated earlier, the objective of social constructivism is not to produce knowledge that can be perceived and verified as an absolute truth, as this would imply that truths are rigid and invariable, which contradicts the central premise of the paradigm. This is in line with Gadamer (2013) who disrupted the dominant principle in science concerning the relationship between truth and method, by arguing that no matter which method is being applied, it is not possible to discover an absolute truth. Rather, as Habarmas
12 argues, truth is found in the strongest argument (Hesse, 1978). Consequently, in this thesis we will attempt to identify young consumers’ relationships with their smartphone applications based on as convincing evidence as possible.
To sum up, we recognize that we ourselves are not free of interpretation from our personal experiences and preconceptions in accordance with social constructivism and its hermeneutic heritage. We practice the hermeneutic circle that describes the relationship between parts and the whole in the process of interpretation. The hermeneutic circle occurs when the interpreter keeps investigating a text5 and projects his or her meaning and understanding into the text (based on the above mentioned preconceptions and past experiences). During this process, new understanding may emerge which can lead to conflicts between what the interpreter thought she knew, what she expected and what she discovered. These conflicts can be worked out in the interpreter's interpretation by going over the text again (Højberg, 2004).
7. Theoretical Foundation
7.1. Service Dominant Logic In the following, the Service Dominant (S-D) logic will be presented as we perceive smartphone applications as services. It will start with a short historical presentation of marketing, leading up to the S-D logic. The main focus is on the disruptive and fundamental paradigm shift in marketing presented by Vargo and Lusch (2004) in their award-winning paper, “Evolving to a New Dominant Logic for Marketing”. S-D logic is described and discussed to establish an understanding of the researchers’ viewpoint and comprehension of the world. For many, marketing is considered to be a science of exchange. According to Kotler (1991, p. 7) exchange is “...the act of obtaining a desired product from someone by offering something in return”. Hunt (1991) contends that the overall purpose of marketing as a science is to explain, predict and understand marketing phenomena. However, an increasing number of researchers argue that the discipline’s predominant product- centered orientation, with the 4Ps at the center, prohibits the development of a theory that sufficiently serves these purposes. The dominant focus on products is simply “unable to explain much of the higher order phenomena of marketing” (Randall, 2007, p. 1). Thus, much debate centers around the adequacy of the product orientation in the evolving marketplace (Randall, 2007).
To address this debate, Vargo and Lusch (2004) recently proposed a new dominant logic for marketing, the service dominant logic. With their recognized paper,” Evolving to a New Dominant Logic for Marketing” from
5 In our case text refers to the audio files and the transcription of the interviews with informants.
13 2004, they caused renewed interest in the reformulation of marketing. In this, they promote a fundamental paradigm shift in marketing by slaughtering above-mentioned holy cow of the field, exchange theory (Knudsen & Refslund, 2015). They provide a new perspective that redefines the long-standing concept of goods and services, namely the S-D logic. Within this perspective, goods and services are no longer viewed in the same, conventional sense, where goods are the primary object and focus is on tangible resources, embedded value and discrete transactions. Rather, according to them, services prevail over goods, and goods should be perceived as a medium for a company’s services. For a long time, marketing was simply considered as distributing and exchanging manufactured goods with the purpose of driving revenue (Kotler, 1991). However, the focus of exchange has changed and has shifted to intangible resources, the co-creation of value and relationships. So, the concept of S-D logic effectively reverses the established roles of goods and services, while, still recognizing that both perspectives remain important in the field of marketing. The main argument presented by Vargo and Lusch (2004), is that businesses can no longer preserve a competitive advantage by practicing marketing which focuses on producing commoditized goods with embedded value, pushing them to the markets and automatically assume consumers will accept and take the bait. Consumers increasingly expect to be listened to and be actively involved in the value-creation process, and thus businesses can no longer rely on a make-and-sell strategy, but have to embrace a sense-and-respond approach (Roberts & Grover, 2012)
Emerging from already established theories, one of the probably most well-known antecedents of S-D logic is Theodore Levitt and his 1960 article “Marketing Myopia”. Levitt is considered to be one of the fathers of the customer-oriented view of marketing. According to him, the main purpose for any company is to satisfy the customer, which can only be done by listening to customers’ needs and demands. Businesses must not think of themselves as producing goods or services, but as doing what will make consumers want them to do business with them (Levitt, 1960). With this argument, Levitt marked a shift in marketing orientation by replacing the established product-orientation with a customer-orientation – which also constitute the first small steps toward S-D logic.
To date, the S-D logic as presented by Vargo and Lusch (2004) is based on 10 foundational premises (FP) with further premises evolving. The first premise states that the application of specialized skills and knowledge is the fundamental unit of exchange between parties (FP1). Previously, in the G-D logic, operand resources6 were considered primary, whereas the S-D logic consider operant resources7 to be the primary ones (Vargo
6 Resources on which an operation or act is performed to produce an effect (Vargo & Lusch, 2004 p.2) 7 Resources that produce effects e.g. skills and knowledge (Vargo & Lusch, 2004 p.2)
14 & Lusch, 2004). As Vargo & Lusch (2004) put it, the skills of the individual alone may not be ideal or sufficient for his survival and well-being, demonstrating that specialization is better both for society as a whole and for the individuals within it. With other words; If we collaborate we have a better chance of survival. Therefore “market actors interact and collaborate for the capabilities of the other party that renders service” (Karpen et al., 2012, p. 22), rescinding the former clear distinction between goods and services. A service can be provided either directly through a company’s activities, or indirectly through enabling service platforms such as goods, institutions, internet websites or application use. Since the service can be provided through complex combinations of the above, the service’s basis of exchange is not always clear and apparent. Therefore, FP2 holds that indirect exchange conceals the fundamental unit of exchange (Vargo & Lusch. 2004).
According to FP3, goods are simply distribution mechanisms for service provision. Essentially, people want goods because they provide services (Vargo & Lusch, 2004) which is supported by Kotler (1991, p. 5) who states that “the importance of physical products lies not so much in owning them as in obtaining the services the render”. For instance, one buys a car because it provides a transportation service, or an oven because it delivers a food cooking service. Physical products are to be seen as vehicles that perform services for us (Kotler, 1991). In addition to their direct service provision, goods also serve to meet individuals’ higher-order needs such as self-confidence, happiness, accomplishments etc. People often acquire goods “...because owning them, displaying them, and experiencing them…provide satisfactions beyond those associated with the basic functions of the product” (Vargo & Lusch, 2004, p. 9). This relates to the progression of economic value model from the experience economy, where countries and their consumers are believed to move along different economic stages, starting from wanting commodities moving up through the ladder of goods, services, experiences and transformations (cf. 7.3.3.)
According to Vargo and Lusch (2004, p. 2) services are “...the application of specialized competences (knowledge and skills) through deeds, processes and performances for the benefit of another entity or the entity itself”. A service is the interactive process of doing something for someone else. Thus, the fundamental proposition of the S-D logic is that organizations, markets and society are essentially concerned with the exchange of services i.e. the application of competences (i.e. knowledge and skills) for the benefit of another party. FP5 holds that, ultimately all economies are service economies, however this may be masked by service intermediaries such as goods, money or institutions (FP2). One popular misconception about the S-D Logic is that it reflects a transition into a service era, and that “it is justified by the fact that many national economies has become or are just now viewed “service economies” (Vargo & Lusch, 2008, p. 4). But, services have always
15 been around and been important and so, is not a new and emerging concept. What has changed is that they are now becoming more evident in the economy, as specialization continuously increases, and less of what is being exchanged fits the prevailing manufactured-output classification system of economic activity (Vargo & Lusch, 2004). Thus all businesses are essentially service providers. Companies that produce goods do so as a means of “transmitting” their service to the customer. Let’s use the example of cars again. In this view, automakers like Volkswagen are not in the business of selling cars, but rather they are providing a mobility service to the customer through the cars they manufacture. Accordingly, goods render services and have value-in-use, however, but it is the service that is perceived as the unifying purpose of any relationship (e.g. between the organization and the customer).
The S-D logic also redefines the relationship between the organization and the customer. In the conventional school of thought the producer and the customer are viewed as ideally separated with the producer solely developing and delivering an output with embedded value and the customer as a passive recipient acting out a predetermined role (Prahalad & Ramaswamy, 2004). FP6, and FP7 emphasize the consumer's’ role in the value-creation process. These two premises contend that value is always co-created between the company, the consumer and possibly other stakeholders. The customer has been promoted to being a co-producer of value (FP6) who is continuously communicating directly or indirectly with the company to improve the offering. Hence, the customer moves from being an operand resource, to being an operant resource (i.e. co- producer). This means that the focus of marketing has shifted from value distribution of finished goods with embedded value, to value-creation incl. facilitation and support of the value-creating process on part of the organizations (Vargo & Lusch, 2004). As Gummesson (1998, p. 247) states, “if the consumer is the focal point of marketing, value-creation is only possible when a good or service is consumed”. Value is thus not inherent in or added to a product, but rather what the consumer gets out of the product (cf. 7.2.). So, businesses cannot exclusively produce and deliver value to the customer, they can only offer value propositions to the customer (FP7). Value will be individually determined by the beneficiary i.e. the customer through value-in- use (FP10), making value idiosyncratic and linked to experiences (Vargo & Lusch, 2004). Because a service is defined in terms of customer-determined benefits and co-creation, a service-centered view is inherently customer-oriented and relational (FP8). Creating value with rather than for customers naturally implies a relational context and further indicates the operant and co-creative nature of network partners noted in FP1 and FP6. Also, the S-D logic embraces the idea that value co-creation is a process of integrating and transforming resources, which requires interaction among network partners in order to attain mutual betterment (Vargo & Lusch, 2004).
16 Moreover, FP9 proposes that organizations exist to integrate and transform micro-specialized competencies into complex services that are demanded in the marketplace (Vargo & Lusch, 2006). Finally, the company’s own operant resources, e.g. employee competencies, have replaced operand resources as the main source of competitive advantage, therefore competitive success (FP4). Operant resources become the imperative in actualization of value-in-use with network partners (Karpen et al., 2012).
7.1.1. Critique of SD-Logic While the S-D Logic possess considerable potential for changing the field of marketing, it is not without flaws, nor is it accepted by all. Some have argued that it is not so much a prescription for a revolution, but rather a mere description of what has already taken place over the course of the last few years. Ergo, sceptics find little of it to be groundbreaking. Furthermore, critics believe it to be too firm-centric, while it also does not provide any actionable theory such as, for instance, the four Ps of marketing does (Randall, 2007; Maglana, 2007). However, the S-D logic is not intended to be a theory, but rather a mindset to adopt or a lens to look through, in order to see social and economic phenomena more clearly. Ergo, the S-D logic operates at the pre-theoretic, paradigm stage. It is important, however, to note that it is not a currently paradigm, as it has not (yet) obtained a “worldview” status (Vargo & Lusch, 2008). In addition, Vargo and Lusch has been criticized for not truly adhering to the shift they themselves are advocating. The lexicon they use are still heavily dominated by G-D logic terms and does not truly represent the shift they themselves are proposing (Randall, 2007). The language of commerce is goods-centric in nature, which “reflects an underlying paradigm for thinking about commerce, marketing and exchange in general” (Vargo & Lusch, 2008, p. 2). This pose a challenge when discussing a counter-paradigmatic view such as the S-D logic. However, in one of their subsequent papers, where they address the criticisms that have surfaced, Vargo and Lusch (2008) have, corrected some of the more lexicographical slips. For instance, FP6 has been changed from “The customer is always a co-producer” to “The customer is always a co-creator” (Vargo & Lusch, 2008) in order to underline the collaborative nature of value co-creation, as production often is associated with producing units of output, which has strong connotations to the G-D logic.
Moreover, Vargo & Lusch (2006) have gone from using the term services in plural form, which reflects a special type of output, to service in singular form which reflects “the process on using one’s resources for the benefit of another entity” (Vargo & Lusch, 2008, p. 2). Other phrases have been substantially harder to change, as no suitable replacements (yet) exists. One example is the terms “producer” and “consumer” which contain very specific meanings grounded in the G-D logic and are incompatible with the S-D logic. Consequently, some of the wording might be a bit misrepresentative but yet still used (Vargo & Lusch, 2006).
17
Nevertheless, the work of Vargo and Lusch is by no means without importance. They have initiated a redefinition of marketing that tries to unify the two previously disparate concepts of goods and services. Many researchers supporting the S-D logic claim that it is a strong alternative to the traditional view (Webster, 2006). The marketing discipline has already shifted much of its dominant logic “away from exchange of tangible goods (manufactured things) and toward the exchange of intangibles, specialized skills and knowledge and processes (doing things for and with)” (Vargo & Lusch, 2006, p. 4) which direct it toward a more comprehensive dominant logic that integrates goods and services. Thus, the S-D logic provides a richer foundation for marketing theory and practice and also has potential as a foundation for the development of a general theory of marketing (Randall, 2007).
7.2. Co-Creation of Value Central to the S-D logic is that the consumer is upgraded to co-creator of value (FP6) from their previously passive role of consumption. Traditionally, value-creation occurred within the company through its activities with no involvement from consumers. The whole concept of the value chain exemplifies this unilateral role of the company as a value creator (Porter, 1980). Ergo, the company and the consumer had distinct roles as respectively active producer and passive consumer. Within this view the market is viewed as a place of exchange and has absolutely no role or influence in the value-creation process. It is merely a target of companies’ offerings. Thus, the traditional view of value-creation is very much company-centric. The focus of companies lies on the exchange and thus their focus becomes one of economic value extraction. The interaction between the company and its customers is not perceived to be a source of value-creation. As the companies unilaterally decide which products and services to produce they also decide what is of value to the customers (Prahalad & Ramaswamy, 2004). However, consumers are abandoning their traditional role and are instead becoming co-creators of value, fundamentally changing the dynamics of the marketplace. They are no longer merely interested in passively purchasing a product, rather the product has come to be an object around which they have experiences. Importantly though, they won’t have these experiences fully orchestrated by companies, but instead shape those themselves. This means that value is co-created with the consumer when they are able to personalize their experience using the company’s product or service proposition (Payne et. al, 2008). As Prahalad argues in an interview, co-creation of personalized experiences requires at least two problem-solvers, namely the the company and the consumer (Leavy & Moitra, 2006). Co-creation should allow the consumer free reins to work with the resources provided by the company, so that they can produce their own value, thus throwing the company off its throne as autocrat of value (Darmody, 2009). Following this development, consumers increasingly demand to be listened to and actively
18 involved in the processes of value-creation. This means greater interaction between the company and consumer is necessary for collaboration and creation of mutual value. Companies should ideally perceive consumers as a new source of competence (Prahalad & Ramaswamy, 2000).
The consequence of not recognizing this shift towards the centrality of the consumer can be high e.g. loss of consumers and consequently market share. Companies therefore need to escape from the highly ingrained company-centric view which belongs to the past, and embrace co-creation of value with customers through a focus on personalized interactions between the company and individual customers. “High-quality interactions that enable an individual customer to co-create unique experiences with the company are the key to unlocking new sources of competitive advantage” (Prahalad & Ramaswamy, 2004, p. 7). Accordingly, value ought to be jointly created by both the company and the consumer.
7.3. Experience Economy In line with what the S-D logic argued about it no longer being the product itself that takes center stage, but rather the intangible features we now present and discuss the concept of the experience economy as presented by Pine & Gilmore (1998). In order to provide the reader with a thorough understanding of what the experience economy is, this chapter begins with establishing an understanding of what experience is. In most experience economy literature consumers are referred to as guests, a term adopted from the renowned Walt Disney, but throughout this thesis we have chosen to keep the term consumers, as we perceive the term “guest” a bit misrepresentative within the context of smartphone applications.
7.3.1. Definition of Experience To start off, experience is a mental concept. It does not concern physical needs such as goods do and it does not solve any material or intellectual problems such as services do. We cannot store an experience in the same way that we can store goods, and an experience does not necessarily solve any problems for us. It is something that happens in the minds of individuals (Sundbo & Sørensen, 2013). An experience is “determined by external stimuli and elaborated via the mental awareness that people have from earlier experiences, mental needs (such as self-realization, un-stressing, avoiding everyday life through escapism) and personal strategies” (Sundbo og Sørensen, 2013, p. 2).
19 7.3.2. Origin of Experience Within the context of consumer behavior, Alvin Toffler was, back in 1970, one of the first authors to address the concept of experience in his book “Future shock”. In this he states that “from a system designed to provide material satisfaction, we are rapidly creating a new economy geared to the provision of psychic gratification” (Toffler, 1970). The development Toffler foresaw in the seventies was essentially ignored by management consultants and economists, who were more preoccupied with the strong growth of the service sector. Not until the late nineties were the concept brought into the context of marketing by the two pioneers, Joseph Pine and James H. Gilmore (Boswijk et al., 2007). In 1999 these two published their groundbreaking work “The Experience Economy”, a year after their article in Harvard Business Review on the same subject. Their thesis is that as soon as a country reaches a certain level of wealth, consumers’ attention shifts from goods and services to experiences. The increasing number of suppliers and consequently the intense competition that exist within most categories of goods and services often lead to cost reductions and commoditization. Thus, competition on price increases and this will naturally “force companies to look for new ways of bringing goods and services to the attention of consumers” (Boswijk et al., 2007, p. 2), which is where experiences come in.
7.3.3. Pine & Gilmore´s Experience Economy To address this dilemma, Pine and Gilmore (1998) introduced the concept of the experience economy, where they refer to experiences as a new source of value-creation. According to them, experiences constitute a fourth economic offering, an economic offering that actually always has existed, but remained unnoticed. In general, they perceive countries to go through different economic development stages which they refer to as the progression of economic value. This development consists of four stages with the service economy predating the experience economy as the experience economy is a transition from selling services to selling experiences. In line with Toffler, they argue that when societies are at an early stage of economic development, the focus is on consumption of basic commodities which are required for survival, and thus consumers are less concerned about customized experiences (Etgar, 2008). Again, this is in line with Maslow’s hierarchy of needs which suggest that an individual's most basic needs must be met before the individual will progress to desire, or turn their focus to, secondary or higher order needs (McLeod, 2007).
Within the experience economy, Pine and Gilmore (1998) emphasize that businesses have opportunities to charge higher prices when adding experiences or selling an experience. They argue that the postmodern ways of consumption relate to a changed economy founded in experiences instead of just services and goods. Furthermore, they work with a discourse of the Experience Economy seen as a theater stage also referred to
20 as staging and “...when a person buys (...) an experience, he pays to spend time enjoying a series of memorable events that company stages - as in a theatrical play - to engage him in a personal way” (Pine and Gilmore, 1998 p. 2). They emphasize the significance to the consumers of creating memorable experiences associated with the consumption of services and products (Pine & Gilmore, 1998). Essentially, Pine and Gilmore (1998) distinguish between goods and services, but argue that ultimately it is the experience surrounding them that can benefit a business the most in a saturated market.
The demand for customized experiences and expectations from consumers have increased rapidly over the years (Andrus, 2015) and consumers have become co-creators of value (FP6 in the S-D logic). Shaw et al. (2011, p. 6) states that “S-D Logic views co-creation of value as determined by the user during the actual process of consumption”. This is somewhat linked to the usage and demand of experiences as discussed by Pine and Gilmore (1999). Single exchange transactions are changing into relationships where value is created through the interaction process itself (Grönross, 1990; Edgar, 2008), which is related to the concept of the S- D logic. Pine and Gilmore (1998) argue that a business must orchestrate memorable events for its consumers and that that memory itself, i.e. the experience, becomes the core product and that the creation of experiences have amplified the importance of co-creation. Furthermore, they state that interactions with products, services, and the surrounding environment construct and develop a memorable experience for participants. Top experience makers like; Apple, Amazon and Disney build their business around this to certify that their customers have the most positive possible memory of their brand (Van Tyne, 2013). Pine and Gilmore (1999) also argue that for experiences to be remembered and to increase the impact of these, the senses have to be activated. Senses lead to emotions and emotions are a part of the evaluation process. Enhancing sense interaction with the experiences is perhaps the most straightforward approach according to Pine and Gilmore (1999). For instance, some concept coffee shops inject scents of cake out in the air every hour to entice customers to buy their pastries.
21 Staging experiences is not about entertaining customers, but about engaging them. By categorizing different experiences Pine and Gilmore (1999) have generated the Four Realms of an Experience, which is a way to think about experiences across two dimensions8. The first dimension indicates the level of consumer participation which varies from passive, where the consumer is an observer or listener of the event and don’t affect the performance at all, to active consumer participation where the consumer personally contributes to the performance and often even plays a key role in the performance. The second dimension shows the level of connection that unites customers with the experience. This varies from absorption, which entails getting a consumer's attention by bringing the experience into the mind, to immersion, making the consumer become an integrated and active part, either physically or virtually, of the experience itself (Pine & Gilmore, 1999).
The four realms symbolize different types of experiences. An entertainment experience, which is passive participation combined with absorption, “…is passively absorbed through the senses” (Pine & Gilmore, 1999 p. 31) which can be when a consumer sees a play or a movie. With educational experiences, the mix of active participation and absorption, the consumer can learn and “... a guest absorbs the event unfolding before him while actively participating” (Pine & Gilmore, 1999 p. 32). Combining these two, entertainment and education, results in edutainment, which is an experience with characteristics from both realms. An example can be a computer game which in itself is entertaining while also containing elements of learning. The third type of experience is the escapist experience, which involves greater consumer immersion and active participation in the performance (Pine & Gilmore, 1999). The fourth and final experience is the esthetic experience, where “...individuals immerse themselves in an event or environment but themselves have little or no effect on it, leaving the environment (but not themselves) essentially untouched” (Pine & Gilmore, 1999, p. 35). For instance, a visitor at an art gallery. In sum, the consumer can do in an escapist experience and can sense and just be there in an esthetic experience. Pine and Gilmore (1998), state that a company should not just emphasizes one realm, but strive to use the entire framework in designing a compelling and engaging experience while creatively enhancing the different aspects of the experience they want to stage.
Beyond Pine and Gilmore, the Danish author Rolf Jensen also deserves to be mentioned. In his book “The Dream Society” (1999) he contended that most of future consumption would be characterized by intangibility and an emphasis on the story surrounding the product which he believed would come to play a key role in consumers’ purchase decisions. Michael Wolf (1999) argues something somewhat similar in that he believes that the entertainment element will be the key differentiator in the future economy. To the extent that
8 See Appendix 2
22 products without an element of entertainment don’t stand a chance. However, it is important to note that Pine and Gilmore do not share Wolf’s view, for them it’s all about engaging the consumer.
Many people have explored the experience economy and tried to define what an experience is, thus there are many contrasting views. In general, the point of departure varies from author, culture and orientations. Schmitt (1999) starts with the company and the premise that the experience staged by the company determines the unfolding of the experience and the conditions and procedures of consumption (Schmitt, 1999). Pine and Gilmore (1999) focus on the experience as it is perceived by the consumer, while Jensen (1999) focuses on the goods themselves with a dimension of emotions and storytelling added. Most authors, however, do agree on multiple aspects. Firstly, more is more, meaning that attaching more dimensions to the experience equals a more comprehensive experience. Secondly, there is consensus that the senses play a vital role and function as a tool for consumers to remember past experiences. Finally, it is broadly recognized that because the market is changing, marketers need to be aware of how brands and products are experienced (Etgar, 2008).
In sum, the experience economy is about tailoring an experience to fit the individual customer's needs and requirements. While consumers usually expect there to be something recognizable, adding new intriguing elements once in awhile elevates the experience. Therefore, it is crucial to update the experience every now and then. If customers have the same experience time after time again without any new initiatives, they are likely to lose interest and search for alternative rich and compelling experiences from competitors. Thus, the staged performance by the company needs to vary a bit from performance to performance (Pine & Gilmore, 1999).
7.3.4. What is an App Experience? An experience can be defined in several ways depending on the context. Overall, an experience can be described as knowledge obtained through involvement with or exposure to an object or event or the acquirement of skills through actual practice over a time period (Taylor et. al. 2013). It can be discussed when and what an experience specifically is, and in our case what an experience is in regards to an app. In this thesis, we perceive an experience to be the actual involvement with an app’s interface, which means that the actual experience is when a consumer actively opens the app and uses its functions. We do recognize that the distinct terms pre- and post-experiences exist. For instance, a pre-experience with an app may be what an individual hear about it from others or read about it in an article before acquiring it themselves. Examples of post-experiences may be a romantic relationship as a result of using (i.e. experiencing) Tinder
23 or receiving unwanted commercial emails from third parties because one unknowingly agreed to this when downloading the app. However, in this thesis we disregard these and focus on the actual involvement with the app.
Customer Experience Management (CEM) focuses on seeing consumers as individuals and delivering personalized experiences that not only make them loyal to the company, but also evangelize about the company to others (SAS, n.d.). Marcus (2007, l. 3-5) states that “...great experiences need to accommodate the specific needs, wants and aspirations of individuals - who just happen to also be customers”. The way apps are visually designed and how they operate is imperative in giving a good experience and achieving success. The app experience is very much affected by the apps interface, which is its design layout, aesthetics, level of convenience and accessibility. Consumers will instantly form an impression about the app the first time they open it, based mainly on the layout and user-friendliness with free apps it is especially important to impress straight away and have a clear value proposition due to the high churn rate (Brian, 2012).
The user interface is crucial in establishing a positive experience and it needs to be unobtrusive and focusing only on few important functions. Marcus (2007) and Brian (2012) both express that too many design elements can give an app an unintuitive experience. Consumers don’t necessarily understand or see the processes behind the screen that deliver their experience, which emphasize the importance for companies to view the app experience from the outside in and understand the consumer’s point of view (Springer, 2011). An app, in this thesis, is viewed as a self-service technology (SST). It can differentiate what purpose an app have in a company, it can be the main product or service, or a smaller part as a substituting experience with a brand.
7.4. The Concept of Self and the Extended Self An individual's identity is in literature often referred to as the self. The concept of self refers to how one thinks about, evaluates and perceives oneself and essentially includes all that you know about yourself. While there is some ambiguity about the exact conceptualization of the self-concept, there is a general agreement that it is a multidimensional concept constituting different types of selves: however, how many and which types of selves differ among researchers. Some argue that the self-concept is made up of two components; the actual self and the ideal self. The actual self is who you actually are based on your current actions, behaviors, habits and your personality while the ideal self is who you aspire to be (Sirgy, 1982) which is often highly affected by societal and environmental influences (Green, 2013). Others go beyond the duality dimension. Most recognized is perhaps Sirgy (1982) who also included the social self, which is how you
24 present to others and the ideal social self which contains the image you would like others to hold of you. If an individual's ideal self and actual experience are vastly similar, a state of congruence exists. However, rarely (if ever) does complete congruence exist as all people always have an ideal self they strive for and thus experience some amount of incongruence whether small or large (McLeod, 2008). According to Carl Rogers’ theory of personality, all human beings possess the basic instinct to improve themselves and realize their full potential. Like Maslow, Roger´s called this self-actualization. Only when an individual's ideal self and actual self are aligned is this achieved (Sunstrum, 2014).
Essentially, the self is unique to the individual, distinguishable from others and made up by our past and present along with our future desires. Self-presentation is the tangible way in which consumers strive to express their identity to others, mainly intentionally. According to Schau and Gilly (2003, p. 387) “The social actions required from self-presentation are consumption oriented and depend upon individuals displaying signs, symbols, brands, and practices to communicate he desired impression”.
In the context of consumer’s behavior, the concept of self has received interest from researchers for well over fifty years. Originally, consumer behavior was believed to be influenced (solely) by a product´s functional attributes (Morgan, 1993). However, inspired by others who had proposed that products also held a symbolic value, Levy (1959) argued that consumer behavior may be more influenced by the image perceived to be associated with a product, and especially by the interaction between this product image and the consumer's self-image. “The consumer is not as functionally oriented as he used to be – if he ever really was” (Levy, 1959, p. 117). Rather, the individual's sense of self, which is an ingrained part of his or her psychological makeup, is maintained and developed through the use of symbolic goods (Heath Don Scott, 1998). We naturally attribute meanings to things (Schau & Gilly, 2003) and thus we are certainly no longer merely mechanistic buyers of goods (Solomon, 1990). With this argument, Levy is perceived to be the first to really draw attention to the potential influence of consumers´ self-concept on consumption behavior (Sirgy et al., 1982).
Following Levy, several scholars emerged (i.a. Grubb and Grathwohl, 1967; Schenk and Holman, 1980) who recognized the reciprocal relationship between possessions and consumers´ sense of self. Most notable is perhaps Belk (1988), who presented a new perspective on the concept of self in consumer behavior. According to him “…a key to understanding what possessions mean is recognizing that, knowingly or unknowingly, intentionally or unintentionally, we regard our possessions as parts of ourselves” (Belk, 1988, p. 139). The most established fact in consumer behavior research today is that we are what we have. We express ourselves through the things we associate ourselves with. Our personal and cultural beliefs along
25 with our value system are all intangible and thus we attempt to express them (i.e. ourselves) through our material holdings. This is supported by Schou and Gilly (2003, p. 385) who content that “...people often choose products and brands that are self-relevant and communicated a given identity”. We make our identities tangible by associating ourselves with material objects and places. However, according to Belk (1988) the extended self include not only external objects and possessions, but also the body, internal processes, ideas and experiences, and those people, places and things to which we feel attached. However, the latter three (i.e. people, places and things) are often the ones most easily extended.
7.4.1. Technology’s Influence on Self However, since Belk´s article in 1988 there has been significant advances in technology and especially social media has in the last decade taken us by storm which has affected how individuals consume, communicate and not least how we present ourselves. Thus, in 2013 Belk published an updated version adapted to this change, but still based on the same principles presented in his 1988 article. Here he contends that with the current digital technologies the possibilities for self-extension are greater than ever before, and goes beyond the possession of products. A large part of the molding of the self now takes place within social media, and people spend increasingly more time on these platforms which correlates with Belk (2013, p. 487) who claims that “for the most part our digital involvements are social in nature” (Belk, 2013, p. 487).
We now live in a largely global society where creating and maintaining an online presence has become paramount to presenting yourself and developing your personal brand (Green, 2013). Social media constitute a large part of our online presence, and social media thrive on interaction, it´s the air they breathe. And with phones decreasingly being used for simply calling or e-mailing one another, but instead increasingly being used for not only messaging but taking and posting photos and videos, comments and status updates, this interaction is also increasing. The people we are interacting with contribute to the construct of our extended sense of self through an updated version of Cooleys´s looking glass (Belk, 2013). Cooley´s concept of the looking glass self, states that an individual's sense of self grows from the social interactions with others. How we see ourselves do not come from who we truly are, but rather from how we believe others see us. Thus; our self-concept is shaped by how we believe others perceive us (Isaksen, 2013) and how we want them to see us, which relates to Sirgy´s (1982) ideal social self. Perception is king in social media and “many of us are driven by competition, achievement, and status; hence, the creation and portrayal of our ideal selves” (Green, 2013, l. 12-14). Consequently, social media have come to have an imperative role in the psychological development of individuals, especially between adolescence and adulthood (Steinffiled et. al., 2008). Friends within social networks “…co-construct and reaffirm each other's sense of self through their postings, tagging
26 and comments” (Belk, 2013, p. 487). Most individuals consider their social media profiles as presentations of who they are, but most consumers, more or less consciously, strive to present their ideals selves and eliminate some of their real offline selves, ending up presenting an hyper-idealistic version of ourselves (Green, 2013).
Moreover, Belk (2013) argues that sharing has become easier. The concept of sharing has always been around, but the digital devices of today makes sharing much easier and consequently we share more than ever before and more broadly. One´s social media “friends” may know more about your activities, thoughts and opinions than immediate family. What was once private is now shared with just about everyone (Belk, 2013). We have further entered an era of self-portraiture which includes the sharing of these portraits online. One profoundly convincing piece of evidence is the explosion in so-called “selfies”. A word that had its international breakthrough between 2006-2012 (Pearlman, 2013), despite photos with selfie characteristics predating the use of the term. Previously, the photographer had his place behind the camera and, thus excluded from the picture, but now with arm´s lengths photography they are very much included, if not taking the central position. To this comes that the traditional family photo album has been replaced by an individual photo gallery in our digital age. Social media, blogs and websites have caused greater self- reflection, and we are increasingly representing and expressing ourselves through digital bits e.g. through our social media posts, content and updates. Social media have evolved to become a key part of our self- expression/presentation and “…we now do a large amount of our identity work online” (Belk, 2013, p. 484). The internet, and especially social media, constantly ask us “Who are you?” and “What do you have to share?”, which with time have led to more open self-extension and consequently greater disinhibition. One possible factor influencing the self-disclosure is that people can still “hide” behind a screen and avoid direct eye contact with their online audience. And while we might truly believe we exert self-control, controlling our digital self-representation is difficult, as others can influence it by uploading unwanted content about us or re-share our own content to unintended audiences or in unintended settings (Belk, 2013). This tendency of sharing more of yourself online have led to greater self-reflection as well. Greater reflection goes into what to post, as this represent small digital bites of ourselves (Belk, 2013). Within the world of social media, perception is everything and it is a popular belief that people only extend their best (although unrealistic) selves onto social media – a modern way of keeping up wit the Joneses (Sunstrum, 2014).
27 7.5. Brand Relationship Theory
In the following we will take a look at brand relationship theory based on Fournier’s (1998) seminal study of brand relationships and theory development thereof. As our purpose is to identify the key facets qualifying the strength of young people’s relationships with their smartphone and appertaining applications, we find it essential to highlight the theory on which our work is based.
For many years, the marketing mix paradigm dominated marketing thought and practice, however, it has been argued that the marketing discipline has undergone a paradigm shift by moving from a transaction- orientation to a relationship orientation, which has called for a new focus. Building and maintaining enduring long-term and mutually beneficial relationships with consumers has become of the utmost importance for a business to sustain a competitive advantage (Grönroos, 1994; Sheth and Parvatiyar, 1995).
7.5.1. The Concept of Anthropomorphization With the introduction of relationship thinking in the context of consumers and brands, the anthropomorphization of brands gained ground. The concept of anthropomorphization is not new but has been documented in literature throughout history. The term is derived from the Greek word anthropos, “human”, and was in the beginning referring to the attribution of human traits to divinities. It has, further, significantly contributed to the shaping of religions. However, by the mid-19th century the term gained a broader meaning by being adopted into all parts of human life e.g. daily life, arts and culture (Guthrie, 1993). Guthrie defined anthropomorphization as the perception and recognition of humans in objects in the surrounding environment. Essentially, adding “life to the lifeless” (Guthrie, 1993, p. 39). Some use the terms animism to describe nearly the same concept, however, as the term might imply it only relates to animals being assigned human characteristics (Levy, 1985). The terms anthropomorphization and animism are by some researchers segregated due to slightly different assigned meanings and interpretations, however, within marketing the two are often used interchangeably. Yet, Fournier (1998) argues that there is a substantial difference between these concepts. Surely brands can be animated through brand characters, but she argues that complete anthropomorphization requires imbuing the brand with human qualifications e.g. emotion and thoughts.
In the 20th century the concept of anthropomorphization gained recognition and has had significant implications on marketing research. For instance, Fournier (1998) contends that consumers easily attribute human characteristics to brands. Levy (1985) and Plummer (1985) both support this by proving through their studies that consumers easily view brands as having human-like features, along with Aaker (1997), who
28 defines anthropomorphization as imbuing brands with human personality traits. This acknowledged personification of non-human objects was taken further with the introduction of a discourse based on relationships i.e. relationship marketing. The logic behind it is that “if brands have personalities, we can treat them as people; if they are people then we can have relationships with them” (Patterson & O’Malley, 2006). Thus for consumers, brands contain meaning beyond their functional attributes. We ascribe them personalities much like we do humans. Consequently, we can have relationships with them (Patterson & O’Malley, 2006; Fournier, 1998). According to Blackston (1992) “a brand relationship is a logical extension of the idea of a brand personality”.
7.5.2. Fournier’s Relationship Theory In her pioneering 1998 study on brand relationships, Fournier introduced a relationship theory which demonstrate the role of brands in the lives of consumers and the brand-consumer relationship (BCR). The central premise in Fournier’s brand relationship theory is the postulate that consumers decode the behavior of a brand into specific personality characteristics of that brand. According to her, it’s “the everyday execution of marketing mix decisions that constitutes a set of behaviours” (Keller et al., 2008) which the consumers interpret and develop a brand personality from. She believes, consumers easily imbue a brand with human qualifications and this makes her argument that brands can be perceived to be living entities. Based on the consumers’ attribution of personality traits, Fournier reasons that brands pass the personification qualification, and thus becomes an active partner in the relationship dyad. Therefore, she perceives the consumer-brand relationship as a relationship between a consumer and a personified brand similar to that between two people (Kim et al., 2005). However, others have argued that “the personification of brands does not necessarily imply that the brand can become an active partner with the consumer” (Bengtsson, 2003, p. 154). Bengtsson (2003) does not disagree with the anthropomorphous characteristics of a brand, but also contends that just because consumers attribute these to brands, it does not necessarily make theories of interpersonal relationships adequate. Given that brands are inanimate objects they cannot think or feel, and consequently their interaction with consumers may become very standardized - reducing the reciprocity of the relationship. Therefore, Bengtsson (2003) criticizes that just because we are able to think of a brand in terms of a personality this should not be equivalent to actually having human-like relationships with that brand. Both Bengtsson (2003) and Güse (2011), further, believe the vocabulary used by Fournier is incompatible with representing consumer-brand relationships as terms such as “love” is associated with deep interpersonal relationships. Fournier (1998) acknowledges this criticism of lack of parallelism to interpersonal relationships, however, she dismisses this issue of reciprocity. According to her, it does not influence the consumer’s ability to understand a brand relationship and perceive the brand as a relationship partner.
29
Patterson and O’Malley (2006) have also entered this debate by emphasizing that we cannot simply draw direct parallels between brand personalities and human personalities. It may be a popular belief that because consumers infuse brands with personalities, these personalities should reflect the ones we ascribe to humans, and should therefore be perceived as living entities. However, this is not necessarily the case. That brands are living entities is only one of two dominant (and contending) metaphors in the branding literature. The other metaphor perceives brands to be lifeless manipulable artifacts, a metaphor that certainly does not fit Fournier’s relational theory. Which one you adopt depends on your worldview and it is basically a matter of opinion. Within this thesis, we follow in the footsteps of Fournier and perceive brands as active relationship partners much like living entities.
In order to identify consumers’ relationship with brands, Fournier conducted a modified life-history case study based on three different female informants with different lifestyles and situations. Women were chosen as informants based on previous research suggesting that women disclose more and stronger interpersonal relationships and brand involvement than men do (Guest, 1964; Sherrod, 1989). Qualitative interviews were conducted where the informants’ described their usage of brands and the evolution hereof. All interviews were in-home interviews and to stimulate discussion kitchen cabinets were opened after which the “informants were instructed to “tell the story” behind any brand in the inventory” (Fournier, 1998, p. 347). The idiographic analysis of these informants exemplified “how the projects, concerns and themes that people use to define themselves can be played out in the cultivation of brand relationships and how those relationships, in turn, can affect the cultivation of one’s concept of self” (Fournier, 1998, p. 359). Based on the findings from her study, Fournier identified fifteen meaningful types of relationships9 named with terms known from the interpersonal sphere. These fifteen relationship types can be divided into more generalized clusters. For instance, compartmentalized/circumscribed friendships, childhood buddies, best friends and casual friends all fall under the category of “friendship”, while marriage of convenience, committed partnership and arranged marriage fall in the “marriage” grouping. Several “dark side” relationships are also identified e.g. dependency, enslavement, enmity and secret affairs. These types of relationships highlight a darker side of brand relationships which indicates some form of addiction and/or compulsive consumption. Further, a few temporarily oriented relationships are identified, represented by courtships and flings.
9 See Appendix 3
30 7.5.3. The Brand Relationship Quality Scale (BRQ) Besides identifying the fifteen types of brand relationships, Fournier (1998) developed a six-faceted brand relationship quality (BRQ) construct indicating the quality, depth and strength of a given relationship. She argues that these six facets lead to a strong and long-lasting relationship, and extensive work have validated the BRQ construct (Keller et al., 2008; Kim et al., 2005). The multifaceted nature of this BRQ construct indicates that it takes more than the pull of positive emotions of consumers to retain a relationship. Fournier (1998) argues that affective and socio emotive attachments (love/passion and self-connection), behavioral ties (interdependence and commitment), and supportive cognitive beliefs (intimacy and brand partner quality) combined, strengthen and increase durability of relationships over time. The six facets of brand relationship quality are elaborated in the following:
Interdependence This facet reflects the degree to which the brand is embedded into the consumers’ daily lives both behaviorally (in terms of frequency, scope and strength of interactions) and cognitively (in terms of longing for and preoccupation with anticipated brand interactions) (Keller et al., 2008). High interdependence involves frequent brand interactions along with increased scope and diversity of brand-related activities. Even though a brand may be highly ingrained into consumers’ daily lives they do not necessarily experience affective emotions or intimacy toward the brand (Fournier, 1998; Keller et. al., 2008).
Love and Commitment At the foundation of strong brand relationships, Fournier (1998, p. 363) found that there is “a rich affective grounding reminiscent of concepts of love in the interpersonal domain”. The intensity of the emotional bond varies from feelings of warmth, caring and affection to passion, infatuation and selfish, obsessive dependency. Having love for a brand includes the belief that the brand is irreplaceable and quite often lead to a biased, positive perception of the brand partner. One often becomes blind to the negative and can fall victim of idealizing the image of the loved one (Ben-Zeév, 2010).
Partner Quality The perceived partner quality is a personal judgment of the partner based on three central components which resembles the qualities we often seek in a partner in an interpersonal relationship. The three components are “(1) an empathic orientation toward the other (ability of the partner to make the other feel wanted, cared for, respected, noticed and important; responsive to needs); (2) a character of reliability,
31 dependability, and predictability in the brand: and (3) trust and faith in the belief that the brand will adhere to established relationship rules and be held accountable for its actions” (Keller et al., 2008, p. 351).
Self-concept of Connection This facet addresses the degree to which the brand delivers on important identity concerns, tasks and themes. This way it expresses a significant part of the self-concept both in relation to past, present, personal and social self. Grounding of the self provides feelings of comfort, connectedness, control and security. Having a strong self-connection helps maintain the brand relationship, while also increasing one’s zone of tolerance in adverse circumstances. Fournier (1998) further argues that when a brand comes to play a role in one’s self-concept or self-image affective attachment is likely happen, thus contributing to a strong relationship.
Nostalgic Attachment Nostalgic Attachment is the latest added facet in Fournies BRQ scale. In her journal article “Lessons Learned About Consumers´ Relationships With Brand” from 2008, however, she does not describe the explicit reason for adding it. Nevertheless, we can deduce that originally nostalgic attachment was part of the facet of self- concept connection, which then was subdivided into two sub-facets; Self-connection which expresses the congruity between past, present, real or ideal self-image and that image that he/she has of the brand and nostalgic connection which concerns an individual's memories of the brand. Fournier (2008) perceives these two to be highly correlated and strongly associated, which is why she had originally combined them in the same facet. The more a brand correlate with an individual's real or desired self-image, the more consumers tends to integrate it in their daily life. When integrating a brand into their lives, the consumers will develop a nostalgic attachment to the brand in future settings. In this thesis, we are applying the latest version of Fournier's BRQ scale, where this two-dimensional facet is split up in two. The facet “Nostalgic attachment” is viewed as mentioned above, as an individual's nostalgic memories of the brand. Commitment According to Fournier (1998) strong BCR relationships are characterized by high levels of commitment. Commitment involves dedication to continued brand association and staying by the brand’s side even in hard times. The commitment is often explicitly pledged and expressed externally and often leads to dismissal of alternative brands (Keller et al., 2008).
32 Intimacy Intimacy entails a deep understanding and knowledge of the partner. It’s a two-dimensional concept in that consumers develop a deep intimate familiarity with and understanding of the brand, while simultaneously feeling a sense of individual intimacy i.e. attention from the brand. From the brand’s perspective it often reveals itself in the little-known personal details they hold along with extensive memory about the consumer (Fournier, 1998; Keller et. al., 2008; Kim et al., 2005).
While these are the six facets Fournier (1998) believes determine relationship strength and quality, there still exist discussion about the whole concept of relationship quality. Other researchers have identified what they believe to be the key indicators of a successful relationship. For instance, Crosby et al. (1990) and Güse (2011) define the quality of a relationship as an overall assessment of the strength and depth of a relationship which can been conceptualized into a multidimensional composition of commitment, trust and satisfaction. Güse (2011) argue commitment to be the constant need to continue the relationship combined with the consumer’s willingness to make efforts in maintaining it. Morgan and Hunt (1994, p. 23) argue that trust generally can be defined as “confidence in an exchange partner's reliability and integrity". Finally, relationship satisfaction represents the customer’s affective or emotional state toward a relationship (Crosby et al. 1990). Dwyer et al. (1987) and Blackston (1992) agree with trust and satisfaction being the primary determinants of relationship quality, and Hennig-Thurau and Klee (1997) also highly agree with commitment dimension.
7.5.4. Limitations of Fournier These six facets all influence the strength of a given consumer-brand relationship. However, one shortcoming of Fournier’s theory is an understanding of how the strength of a consumer-brand relationship is affected by the brand’s personality, especially in the event of transgressions. She has later addressed this issue in collaboration with Aaker and Brasel with the article “When Good Brands Do Bad” from 2004. In this, they found that relationships with sincere brands deepen over time similar to friendships, whereas relationships with exciting brands resembles more short-lived, casual flings. However, these patterns only hold if no transgressions10 occur through the course of the relationships. If transgressions do occur, they have proved to be particularly damaging to relationships with sincere brands, compared to relationships with exciting brands. Aaker et al., (2004) found that with sincere brands recovery did not seem possible, despite subsequent attempts of reparation. Due to the stronger relationship with sincere brands, consumers consequently also had higher expectations for the brand, and thus felt severely let down in the wake of a
10 A violation of implicit or explicit rules of the relationship which guides performance and evaluation thereof (Aaker et al., 2004, p. 2).
33 transgression. Once a transgression has occurred, the intimacy between the consumer and the brand is seemingly violated and the expectations of the brand partner disconfirmed. “In essence, transgression reveals disconfirming evidence of the partner’s intentions to act according to the terms of the relationship contract and thus exposes vulnerabilities, doubts and uncertainties that alter and undermine partner quality perceptions” (Aaker et al., 2004, p. 3). In general, research has shown that once perceptions of a relationship partner begin to erode, it is really difficult to slow the decline of the relationship despite attempts hereof. Contrary to sincere brands, transgressions were shown almost to be somewhat positive in relation to exciting brands. While exciting brands usually are very attractive and champions at generating interest, they are often less-attractive as long-term partners, may be due to the lack of seriousness. This leads to a more superficial, fling-like relationship where people naturally have less expectations for the brand partner and thus is not as easily let down by wrongdoings of the brand (Aaker et al., 2004). Not surprisingly we have an easier time forgiving a short-term fling for a wrongdoing than a committed long-term partner.
While the influence of brand personality and transgressions on relationship strength is indeed interesting, it is not an area of focus in this thesis as we will keep our focus on the drivers of relationship strength inspired by Fournier’s (1998) original relationship theory.
7.5.5. Paradox of Technology Mick and Fournier (1998) recognize that no one escapes technology as it is gaining increasingly more momentum in society and thus, we naturally develop relationships with these. These technologies are, however, often paradoxical in nature as they present us with great possibilities and limitations simultaneously. A paradox entails that something is “both X and not-X at the same time” (Mick & Fournier, 1998, p. 125). Mick and Fournier identified eight paradoxes of technology, of which we find two, freedom/enslavement and control/chaos, most relevant here. These two paradoxes often appear together and are more widely experienced and, thus more salient while also being easy for people to articulate.
34
EIGHT CENTRAL PARADOXES OF TECHNOLOGICAL PRODUCTS
Paradox Description
Technology can facilitate regulation or order, and technology can lead to Control/Chaos upheaval and disorder
Freedom/Enslavement Technology can facilitate independence or fewer restrictions, and technology can lead to dependence or more restrictions
New/Obsolete New technologies provide the user with the most recently developed benefits of scientific knowledge, and new technologies are already or soon to be outmoded as they reach the marketplace
Competence/incompetence Technology can facilitate feelings of intelligence or efficacy, and technology can lead to feelings of ignorance and ineptitude
Efficiency/inefficiency Technology can facilitate less effort or time spent in certain activities, and technology can lead to more effort or time in certain activities
Fulfills/creates needs Technologies can facilitate the fulfillment of needs or desires, and technology can lead to the development or awareness of needs or desires previously unrealized
Technology can facilitate human togetherness, and technology can lead to Assimilation/isolation human separation
Engaging/disengaging Technology can facilitate involvement, flow or activity, and technology can lead to disconnection, disruption, or passivity (Mick & Fournier, 1998, p. 126)
Mick & Fournier (1998) argue that the paradoxes generate conflicts which stimulate stress and anxiety for consumers. While it is a popular belief that paradoxes are irresolvable, one can only try to cope with them through coping strategies. Jarvenpaa and Lang (2005) further contends that people who deal better with the paradoxes of technology are more likely to develop a positive relationship with their phone. Mick and Fournier (1998) suggest different coping strategies which can be categorized as either avoiding or confrontative and whether the paradox takes place pre-acquisition or during consumption.
As we in this thesis explore the young consumers’ relationship with their existing apps, we will naturally focus on consumption strategies rather than pre-acquisition strategies in the later analysis.
35
BEHAVIORAL COPING STRATEGIES FOR MANAGING TECHNOLOGY PARADOXES AND THEIR EMOTIONAL EFFECTS
Coping strategies Emotional effects
Pre-acquisition avoidance strategies:
Avoiding information about the characteristics or availability of certain Ignore technological products
Refuse Declining the opportunity to own a specific technological product
Delay Postponing but eventually owning a specific technological product
Pre-acquisition confrontative strategies:
Pretest (1) Using someone else's technological product temporarily or (2) purchasing a technological product but not assuming definitive ownership until the return policy or warranty expires
Buying heuristics (1) The latest, cutting-edge model; (2) a basic, less sophisticated model; (3) an expensive model; (4) a familiar, widely known brand; and (5) a reliable brand
Extended decision making Taking stock of one's needs, searching diligently for detailed product/brand information, and then purchasing the most appropriate alternative in a careful, calculating manner
Extended (1) Buying additional insurance at the time of product purchase to cover warranty/maintenance service and repairs or (2) buying an ongoing contract for periodic contract preventive maintenance and emergency repairs
Consumption avoidance strategies:
Neglect Showing temporary indifference toward a technological possession
Abandonment (1) Declining or discontinuing the use of a technological possession or (2) leaving a technological possession unrepaired if it has malfunctioned
Distancing (1) Developing restrictive rules for when or how a technological possession will or will not be used or (2) physically placing a technological possession in an unobservable or remote site
Consumption confrontative strategies:
36 Changing tendencies, preferences, routines, etc. according to the perceived requirements, abilities or inabilities of a technological Accommodation possession
Partnering Establishing with a technological possession a close, committed relationship of heartfelt attachment
Mastering Dominating a technological possession by thoroughly learning its operations, strengths and weaknesses (Mick & Fournier, 1998, p. 133)
Jarvenpaa and Lang (2005) haven’t developed specific coping strategies like Mick and Fournier (1998), however, they classify avoidance strategies as those actions used to minimize one’s interaction with the phone e.g. ignoring, neglecting, distancing or directly abandoning it.
7.6. Diffusion of Innovation Theory
In this section we describe the different stages of adoption for innovations from existing recognized literature. It should be noted that this section is presented in order for us to determine the adoption stage DAYFAIR reached in the analysis later on.
In general, the theory of diffusion of innovation seeks to understand how, why and at what rate innovations spread through different societies. An innovation is “an idea, practice, or object that is perceived as new by an individual or another unit of adoption” (Rogers, 1995, p. 12) and diffusion refers to “the process by which an innovation is communicated through certain channels over time among the members of a social system” (Rogers, 1995, p. 5). This communication takes place in order to create a mutual understanding between the members of the social system. Most notably within this field is perhaps Rogers (2003), who provided a central theory with his seminal work on adopter categories. In essence, he proposes five categories of adopters based on how quick people adopt innovations; innovators, early adopters, early majority, late majority and laggards. According to Rogers (2003) these adopters are roughly distributed in an S-shaped distribution curve where the diffusion takes off at around 10-20 percent adoption - which is usually when interpersonal networks have been activated and thus come to learn about the innovation and the critical mass is reached - that point where enough individuals have adopted it and further diffusion becomes self-sustaining (Rogers, 2003).
37
The diffusion process as presented by Rogers (2003)
Innovators are usually venturesome types who are not afraid of taking risks and thrives on being perceived as change agents. They function as initial gatekeepers who play a crucial role in the further diffusion to other users. Following these are early adopters (also known as trendsetters) who often are respected social leaders and key decision makers, and their accept and adoption of an innovation help trigger the critical mass. Then comes the early majority who are those individuals who will adopt the innovation before the average consumer, however, still slower in their adoption process than early adopters. Unlike early adopters, the early majority is not leaders per se but still not afraid of change. The late majority usually possess a higher degree of skepticism and thus tend to need greater encouragement resulting in them adopting the innovation later than the average user. Finally, we have laggards who are the last ones to adopt the innovation because they usually are highly antagonistic towards change (Rogers, 2003; Doyle et al., 2014). The basic idea behind this model is that the diffusion process moves smoothly through the different adopter categories.
Moore (2006) agrees with the overall diffusion model, however, referring to is as Technology Adoption Life Cycle, but proposes some modifications to it. He argues that for discontinuous or disruptive innovations the basic bell-curved shape and the components of the diffusion model remain unchanged, but that gaps between the different adopter groups gaps exist. These gaps exemplify the differences that reside between the different groups which affect their respective rate of adoption. According to Moore (2006) one adopter group may have difficulties in accepting a new product if it is presented to them in the same manner as it was to the adopter group that comes immediately before them. Two of the gaps are minor gaps, which he
38 calls “cracks”. The first crack occurs between innovators and early adopters when an innovation can’t be translated into a major new benefit that consumers want to adopt. The other crack occurs between early and late majority, where the product has moved into the mainstream market. The difference between these two groups often concerns the technical capabilities of the user. The early majority is usually capable and willing to learn and acquire the technical capabilities required for using the product, with the late majority often is more resistant or having difficulties learning this.
However, Moore (2006) argues that the major gap (or chasm) lies between the early adopters and early majority, as these have different expectations and need to be approached in different ways. Early adopters usually comprise visionaries who are quick to speculate about the benefits of a new innovation or take a risk while the early majority is the more conservative mainstream market. Early adopters usually expect customization, innovative products/services and accept some risk and inconvenience whereas the early majority wants what’s generic, stable and proven. The general lesson Moore (2006) is trying to teach is that you have to treat products and customers at different stages differently. What convinces and pleases early adopters may not convince and please the mass majority, and so, they need different marketing strategies.
Illustration of Moore’s fragmented perception of the Technological Adoption Life Cycle.
In addition to the diffusion curve, Rogers (2003), also identified five characteristics of innovations that affect the rate of adoption. These characteristics are as follows:
39
Relative advantage is “the degree to which an innovation is perceived as better than the idea it supersedes” (Rogers, 2003, p. 5), which may be measured not only by economic benefits e.g. that it’s cheaper, but also by factors such as convenience, satisfaction and social prestige. Compatibility reflects the extent to which an innovation corresponds with existing values, past experiences and the needs of the potential adopters. Complexity entails how difficult the innovation is to understand and to use. Trialability refers to the degree to which potential users can try the innovation on a limited basis. A trial period decreases any uncertainty the individual may have. Observability is “the degree to which the results of an innovation are visible to others” (Rogers, 2003, p. 16).
Rogers (2003) argues that potential users decide whether to adopt or reject a given innovation based on their perceptions about the innovation incl. their assessment of the above characteristics. Moore and Benbasat (1991) took Roger’s theory and used it as a basis for understanding people’s perceptions of adopting IT innovations. They saw great similarities between Roger’s two characteristics relative advantage and complexity and Davis’ (1996) concepts of usefulness and ease of use, respectively. Davis (1985) developed the Technology Acceptance Model (TAM) which predicts people’s intentions to use a given technology based on their perceptions of it’s ease of use and usefulness, i.e. it will improve performance with a given task. Moore and Benbasat (1991) ended up adding two characteristics to Roger’s existing five, which they believed to be important in people’s decision to adopt or not. The first one is Image which is the extent to which an innovation (e.g. an app) is perceived to enhance one’s image or status in the social system. For instance, mobile devices have gone from being purely a communication device to a fashionable piece of equipment. Many people purchase Apple products to present themselves as hip and trendy and thus enhance their social status (Sahn, 2006). The second is Voluntariness which entail whether or not the using the innovation (or the app) is perceived to be of free will.
One main criticism of the diffusion of innovation model is that it is a simplification of reality. Despite the fact that each adopter group is ascribed personality traits, consumers are not one dimensional beings, as they behave differently and a generic approach may mean loss of opportunities. Numerous researchers have explored the concept of diffusion with regards to mobile technology, however, the concept is much less developed with smartphone applications. In an article by Nickerson et al. from 2014 they state that they haven’t been able to find any studies on the diffusion of smartphone applications, and neither have we subsequently. Thus, we can only make assumptions concerning this matter essentially based on primary
40 empirical data supported by secondary data. However, as mentioned above, this thesis view smartphone application as an SST. Often, adoption of new SSTs demands consumers to significantly alter their existing and encoded behavior which can prohibit the adoption process. Many consumers are in general reluctant to make significant changes Sometimes consumers simply see no benefit in adopting and using a new SST or technology when they are satisfied with alternatives, (Wilson, et. al, 2012), or it can be a matter of a poorly designed SST which keep the consumer away (Matthew et al. 2000).
7.6.1. Word-of-Mouth Marketing Kozinets et al. (2010) have, however, examined how employing Word-of-Mouth (WOM) marketing can influence the diffusion process. Marketers have recognized the significance of organic WOM11 as it has been proved to influence the majority of all purchase decisions (Silver, 2011). Conversations among peers have shown to have greater influence on adoption than product and brand related marketing messages coming from companies. WOM marketing (WOMM) is thus when marketers intentionally try to influence consumer- to-consumer communication which is also by some referred to as social media marketing, buzz marketing or guerilla marketing. Essentially, WOMM is based on the assumption that marketers can exploit the credibility that resides in consumer-to-consumer communication (Kozinets, 2010). Usually marketers try to identify and “cooperate” with the influential consumers i.e. the innovators and early adopters and get them to spread the message. According to Kozinets et al. (2010, p. 71) “...marketers employing social media marketing methods face a situation of networked coproduction narratives”. The marketers are not in sole control of determining how the intended message is communicated as this role increasingly lies in the hands of the online networks with consumers as co-producers which is in line with Vargo & Lusch’s (1998) perception of consumers as co-creators.
According to Kozinets et al. (2010) WOM communication is influenced by four factors. The first is labelled “character narratives”, which refer to the particular character type of the WOM communicator e.g. mommy- bloggers whose narratives emphasize kindness, helpfulness and personal sharing. Each character narrative attracts a certain audience and also affects the expectations of the audience. Second, the forum in which the WOM communication takes place affect what and how it is communicated. Third, WOM communication is influenced by the communal norms within the given forum, which regulate the transmission and reception of a given message. Fourth and finally, WOM communication is influenced by the promotional characteristics of the WOM marketing i.e. the type of product or service (Kozinets et al., 2010).
11 Communication between consumers that is not prompted, influenced or measured by marketers
41
When the WOM communicator communicates marketing messages they’re taking on the dual role of acting both as a continuing community member and a marketing agent - a potential source of conflict. It’s a balancing act of delivering promotional messages while staying true to their character narrative and conforming to the communal norms and expectations. How the WOMM is communicated has immense influence on how it is received by the audience. Kozinets et al. (2010) identified four social media communications strategies that can be used; evaluation, embracing, endorsement and explanation12.
Which strategy to chose depend on the community and its communal norms and expectations of the character narrative. Some communities are completely resistant to commercial messages and profit motives, while others are more supportive and respond more positively toward these. However, Kozinets et al. (2010) also believe that what is communicated about i.e. the type of WOMM promotion, affect the appropriate communications strategy. They find that technology and other high-involvement products usually require an evaluation strategy, while an embracing strategy may be more appropriate for fashion items. As WOMM is increasingly being used as a marketing tool, we believe some individuals are becoming more skeptical of communication about (potential) sponsored products or services. Thus, in line with what Kozinets et al. (2010) claim it is paramount how the WOMM is executed. The findings of Kozinets et al. (2010) heavily question the belief of Brown et al. (2007) that a website constitute the primary actor in online WOM and not one or more persons. However, the article of Brown et al. is from 2007 where social media was just about to truly take off and companies online present primarily were made up by their website. With the internet a marketing message may also be transmitted substantially quicker than in the pre-internet era leading to quicker diffusion, if successful.
8. Methodology
Up till now the theoretical basis for exploring and understanding young consumers’ relationships with their smartphone applications has been presented and discussed. In the following part we turn to the empirical setup of the study, i.e. how empirical data has been collected and processed.
8.1. Research Design
This thesis is a case study, an empirical inquiry that investigates a contemporary phenomenon in depth and within its real-life context e.i. smartphone applications. The case study research design has evolved into a
12 See Appendix 4
42 useful tool for investigating trends and specific situations, also within the discipline of marketing and market research over the last years (Yin, 1984; Shuttleworth, 2014). The DAYFAIR app inspired us to investigate the consumer-app relationship due to the lack of theoretical material on this subject. To examine the key facets of these relationships, Fournier’s work on consumers’ brand relationship theory is employed as a primary guiding theory.
8.1.1. Mixed Methods
In line with our social constructive view, where there’s no single truth as all truth is relative and constructed by the individual or society, we employ the method of triangulation to uncover different perspectives. Triangulation occurs when “...researchers seek corroboration between two or more sources for their data and interpretation” (Rubin & Babbie, 2009, p. 232), and is often referred to as mixed methods. By applying different research methods i.e. utilizing mixed methods, we strive to increase the validity of this thesis. Following the social constructivist paradigm, we accept that our findings are not the absolute truth. We simply cannot research in an objective and unambiguous manner due to our approach to the world, which depends on our preconceptions of it.
For a long time, many researchers have associated social constructivism with the qualitative method of inquiry. It has generally been believed that “The constructivist researcher is most likely to rely on qualitative data collection methods and analysis” (Machenzie and Knipe, 1994, p. 195). However, while some paradigms may seem to be associated with, or favor, either qualitative or quantitative research, a paradigm cannot prescribe (or prohibit) the use of any methodological approach. Neither is there an inherent conflict between the two approaches, as has previously been believed. Instead the two approaches should be perceived to be complementary (Hesse-Biber, 2010). There are many different terms for combining qualitative and quantitative methods, and it has been suggested that mixed methods constitute a third methodological movement. In this thesis we apply the term “Mixed methods” as it is often used to refer to studies that combine quantitative and qualitative methods, either in parallel or sequence, that are applied within different ontological and epistemological assumptions (Blaikie, 2009).
Rasborg (2013) supports freedom of choice regarding methods by contending that the social constructivist approach does not exclude any methods from being applied as the method of inquiry. Machenzie and Knipe (1994) suggest that the constructivist researcher may choose to take the advantage of the somewhat newer and increasingly applied approach, mixed methods, which includes a combination of qualitative and
43 quantitative research approaches. They exemplify it by suggesting that quantitative data can be used to support or expand the qualitative data. The use of a mixed methods approach is further advocated by Guba and Lincoln (1994, p. 105), who claim that “...both qualitative and quantitative methods may be used appropriately with any research paradigm”. Therefore, in this thesis we have deliberately chosen to apply a mixed method approach to our research, rather than simply relying only on one approach. This is done to strengthen our research, since the two methods complement each other's strengths and weaknesses. Furthermore, it provides more comprehensive evidence and encourages us to compare data produced in different ways.
There are pros and cons with both qualitative and quantitative research methods. The research for this thesis was first executed through a survey regarding young people’s use of smartphone applications13. The survey was shared on our own social media, due to the fact that our networks predominantly is similar with the target audience. The survey website SurveyMonkey.com was utilized to produce a fifteen-question survey in which participants were asked about their smartphone and app use in general. The survey included closed- ended multiple-choice questions, and it took the participants approximately 5 minutes to complete the survey. All participants were informed that their response would be anonymous. We decided not to disclose much of the purpose of the survey to the participants in order to minimize the risk that the informants would give us the answers they believed we were looking for.
A total of 260 people between 15 and 35 years old answered the survey. 66% of the participants were female and people from 25-27 years old was the largest age group (37%) represented in the survey. The majority of participants are classified as Generation Y, the “net generation”. The findings from this survey inspired a semi-structured interview guide for our 16 in-depth qualitative interviews, which enabled us to ask more detailed questions. Our qualitative research method enabled the respondents to elaborate on their own opinions and expressions and create an in-depth understanding for us as the the interviewers. It should be noted that it is impossible to completely us influencing the informants and therefore difficult to arrive at something we could call the absolute truth. Furthermore, it is important to emphasize the strength of the interpersonal bond between us as the interviewers and interviewees, e.g. during the interviews we had the opportunity to sense if the interviewee understood the questions and could clarify in case of misunderstandings (Alvesson, 2011).
13 See Appendix 5
44 The value of mixing methods lies in gaining a fuller picture of the phenomenon under study. It is more specific as it offers the best of both worlds; the in-depth, contextualized, yet more time-consuming insights from qualitative research coupled with the more efficient, however, less rich quantitative research approach. Combining these two approaches is far more comprehensive than simply attacking the research question from o