Supervisor: Helle Haurum
Charlotte Gade Agerskov Gine Rosenberg Stauning
May 17, 2016
253,022 characters (111 pages)A study on the strength of young consumers’ relationship with their
smartphone applications
Master thesis |Cand. Soc. Service Management Copenhagen Business School
Consumer-app
Relationships
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
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
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
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.
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.
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
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
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.
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.
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.
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).
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
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.
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)
& 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
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).
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).
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
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).
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
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.
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
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
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
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
