In this thesis, I examine how mobile phone consumers understand and experience value in 3G mobile phones, from the perspective of innovation theory. Innovation theory aims to tell businesses how to bring innovative products successfully into the marketplace (Burgelman, Christensen and Wheelwright 2004). Yet innovations often fail (Chesbrough 2006, Christensen and Raynor 2003, Ulwick 2005), leading to delays in new technology reaching consumers, and losses for shareholders. I argue that innovation theory has focussed too heavily on novelty (Schumpeter 1934) and differentiation (Porter 1980) to understand innovation. Innovation theory has not focussed enough on how consumers understand or experience new technology. Recent research suggests innovation needs to create a leap in value to be successful (Kim and Mauborgne 2005). Yet value is an important (Drucker 1999, Vargo and Lusch 2004, Porter and Kramer 2011), but under-analysed (Woodruff and Flint 2006, Grönroos 2011, Arvidsson 2011) and incompletely understood concept. In this thesis, I open the black box of value, and develop a value theory of innovation in 3G mobile phones.
The research findings presented in this thesis examine one fast-moving new technology to build a dynamic, consumer-centric value theory of innovation in 3G mobile phones. I use grounded theory as a methodology for theory building around complex dynamic social processes, consistent with my interpretive approach. I interviewed consumers and used grounded theory analysis to build concepts, relations and a model that explains consumers’ actions and experiences with 3G technology. I further tested the results with three triangulating consumer datasets, and by searching for disconfirming evidence in relevant innovation and consumer value literature.
Value emerged from the data as a consumer meaning construction process, guided by social and individual practices of discovery and filtering. Central to this process is the emotional aggregation of multiple meanings to a single overall attitude, facilitating consumer action. Three other value concepts also emerged; value meanings, value practices and attitude. Value was described in many ways by consumers; the value meanings. Importantly, new value meanings arose after purchase different from those consumers constructed before purchase. Value appears highly dynamic and shifts with new information. Value practices add to the dynamics of value by attracting, rejecting, or sharing new value information. The most important value practices I found were filtering / closing, exploring, comparing, recommending, observing and inquiring. A third concept, attitude, expressed value emotionally, either positively or negatively and with varying strength. Attitude importantly arises as a single overall attitude which aggregates multiple competing attitudes to value meanings and I propose emotion as a mechanism enabling such aggregation. I found emotional reactions to value information to be important markers of value construction.
Drawing on these value concepts, I developed a dynamic model of value from three interlocking value conversations (social, physical/individual and with the telco), based on three phases (pre-purchase, post-purchase and action phase). Attitude and emotion I placed as a central hub in the model. Action, such as adoption of a new technology, follows indirectly from assessing value and positive attitude (due to value momentum) but more directly following loss of value. Value as an empirical explanation of consumer actions is however inconsistent with the view in the consumer value literature that consumers are goal oriented (Zeithaml 1988, Holbrook 1996, Woodruff 1997).
Two value concepts emerged for innovators and two others for policy-makers. Value Management suggests innovators could continuously monitor what is of value to consumers and to adjust to shifts in their value. Value Leadership suggests innovators sometimes go further to tell consumers what they need. For policy-makers wanting to measure innovation or encourage new technology, it is important to (1) measure consumer attitude alongside tangible innovation indicators and (2) to encourage innovators to focus on value creation. A value perspective opens the black box of value to explore what value is and how the process of value works. However, emotion emerged as a black box at the core of value, requiring further investigation.
A value theory of innovation in 3G mobile phones expands Rogers’s (2003) diffusion theory of adopter categories, suggesting consumers can move freely between early and late adopter categories, and casts doubt on income, education and connectedness as important indicators of new technology adoption behaviour rather than perceived consumer value. A focus on value expands the way innovation is defined. This thesis moves away from traditional definitions of innovation that see it simply as bringing something new to market (Kotler 1991, Rogers 2003, Porter 1990). Instead, I argue innovation is better understood as something new that creates value for consumers. This definition emphasises the consumer value creation aspect of innovation found in other innovation authors (Schumpeter 1934, Drucker 1999, Porter 1990, Kim and Mauborgne 2005).