The Smartphone Experience Marketing: Cocreating Value through

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The Smartphone Experience Marketing: Cocreating Value through
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research
ISSN: 1983-9456 (Print)
ISSN: 2317-0123 (Online)
Editor: Fauze Najib Mattar
Valuation system: Triple Blind Review
Languages: Portuguese and English
Publication: ABEP – Associação Brasileira de Empresas de Pesquisa
The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Marketing de Experiência do Smartphone: a Cocriação de Valor por meio dos Aplicativos de
Celular
Submission: 7 fev. 2013 - Approval: 17 jun. 2013
Mariana de Freitas Coelho
Studying Master in Marketing and Strategic Bussiness at Universidade Federal de Minas Gerais UFMG, Belo Horizonte, Brazil. Post-Graduate in Social Project Management at Centro de
Capacitação e Pesquisas em Projetos Sociais - UFMG. Degree in Tourism at UFMG.
E-mail: [email protected]
Address: UFMG - Av. Antônio Carlos, 6627 - Pampulha - 31270-901 - Belo Horizonte/MG Brasil.
Pedro Ferraz de Andrade Augusto dos Santos
Studying Master in Marketing and Strategic Bussiness at UFMG. Degree in Production Engineering
at UFMG.
E-mail: [email protected]
The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
ABSTRACT
This article aims to identify the elements present in experience marketing interaction among
consumers of Apple-branded smartphones and their applications. Based on the scenario of a
significant expansion of the software applications market, this study investigated the relationship
between the use of applications on smartphones and the transition in the locus of value creation by
the company, which would occur within the paradigm of experience economy. A qualitative
exploratory research evaluated interviews with iPhone users and their experiences with the
applications. Among the results, based on related elements present in the literature, the economics
of applications is contained in the paradigm of experience. This requires of the companies the
ability to move beyond the focus on products and services, so as to provide a complete customer
experience and thus achieve a higher position compared to its competitors.
KEYWORDS:
Consumer experience, marketing experience, co-creation of value, smartphone applications.
RESUMO
Este artigo visa identificar os elementos do marketing de experiência presentes na interação entre
consumidores de smartphones da marca Apple e seus aplicativos. Tomando por base o cenário de
expressiva expansão do mercado de softwares aplicativos, este trabalho investigou a relação entre o
uso de aplicativos em smartphones e a transição no locus de criação de valor pela empresa, que
passaria a ocorrer dentro do paradigma da economia da experiência. A condução de uma pesquisa
qualitativa, de caráter exploratório, avaliou entrevistas com usuários do iPhone e as experiências
provenientes de seus aplicativos. Dentre os resultados, tem-se que, embasado em elementos
relacionados presentes na literatura, a economia dos aplicativos está contida no paradigma da
experiência. Este exige das empresas a capacidade de ir além do enfoque em produtos e serviços, de
modo a proporcionar uma experiência completa ao cliente e, assim, conquistar uma posição
superior em relação a seus concorrentes.
PALAVRAS-CHAVE:
Experiência do consumidor, marketing de experiência, cocriação de valor, aplicativos de celular.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
1. INTRODUCTION
The competitive landscape is subject to intense turbulence as participants continually transform the
industries in which they are inserted. The growing rivalry of the markets, combined with the
increasing scarcity of natural and human resources necessary to the productive processes, require
the organizations to adopt new strategic approaches, in order to guarantee a sustainable advantage
over the competition. In this context, innovation becomes a crucial competitive factor (DAVILA;
EPSTEIN; OVERSTREET, 2007; TIDD; BESSANT, PAVITT, 2005; TIGRE, 2006).
However, Prahalad and Ramaswamy (2003, 2004) noticed that an innovation originated from a
product or service centric view is no longer able to provide a sustainable competitive advantage for
those organizations that adopt it. Managers from various industries have realized that the traditional
means of differentiation are no longer enough to guarantee superior returns.
In results of wide diffusion of Information and Communication Technologies - ICTs, information is
becoming more rapidly available to an ever-wider public (SMITS, 2002). More active consumers
subject companies to detailed evaluation processes, extracting the greater value possible from the
transactions for themselves (PRAHALAD; RAMASWAMY, 2004).
Thus, the emergence of a class of interconnected and empowered consumers, combined with the
convergence among industries and technologies, challenges the traditional premise of value creation
by offering only products and services (PRAHALAD; RAMASWAMY, 2003). In this scenario, it
becomes imperative to think strategy from the perspective of a value creation process as a whole,
and not the internal product development process in isolation (LUSCH; VARGO; WESSELS, 2008;
NORMAN; RAMIREZ, 1993).
As noted by Pine II and Gilmore (1998), the current competitive scenario is characterized by the
commoditization of many products and services. Consumers, unable to differentiate the attributes
and functional benefits of the products, become motivated to engage in unique experiences during
the interaction with the companies.
Thus, to succeed on competition, it is crucial not only to offer low prices and high quality, but also
to be able to create, with the consumer, a unique experience (GREWAL; LEVY; KUMAR, 2009).
The focus of the innovative process, therefore, must change from the technology to compose the
product, to the co-creation experience offered to the consumer (PRAHALAD, RAMASWAMY,
2003).
Considering the expressive expansion of the application software market, this paper suggests there
is a relationship between the use of apps on smartphones and a transition in the locus of value
creation by the firms, which has been transformed from a product-centric view to one that focuses
on the consumer experience. The following question emerges: which are the main elements of the
experience marketing present in the interaction between users and mobile apps?
The start point is the premise that value would be created through the use of applications by users in
addition to the device’s initial value proposition, focused mainly on its technical features planned at
the time of its development. This would enable the emergence of unique experiences for the
consumer, and thus, sustain the former hypothesis.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
The purpose, therefore, is to investigate the main elements of the experience marketing involved in
the mobile apps usage. Furthermore, this paper’s specific objective is to describe the value creation
process through the consumer’s experience with the products and said softwares.
In this context, experience marketing provides management with a solid basis for managing
innovation processes, in order to maximize co-creation and contribute to the development of the
company's innovative capacity, as suggested by Prahalad and Ramaswamy (2003; 2004).
Upon developing new offerings, management must consider the design of an experience space that
enables value creation by the end consumer during the usage of the product or service. The cocreation of value would create new experiences, in which experience marketing would provide
fundamental source of competitive advantage.
This study is justified both by the growth of the apps market (GARNER, 2011; JUNIPER
RESEARCH, 2010), and by the need for marketers to understand how individuals perceive the
value of their mobile devices through such softwares and how they are inserted in their lives
(ANDREWS; DRENNAN; RESSEL-BENNET, 2012).
Key authors from the experience economy were used to support this research, such as Pine II and
Gilmore (1998), and Berry, Carbone and Haecke (2002) and Schmitt (1999; 2011), as well as the
notion of co-creation of value.
This study also includes a brief description of the area of study, delimited by Apple’s mobile
segment, including its App Store and the iPhone. The method used was an exploratory multicase
study (MALHOTRA, 2004). The considerations were based on secondary data collected about the
company and the information obtained through interviews conducted by the authors with iPhone
users.
2. FROM THE EXPERIENCE ECONOMY TO THE EXPERIENCE MARKETING
According to Holbrook and Hirschman (1982) much of consumer behavior can be explained by the
way they process information. This process, however, must be enriched with the experience
perspective. Although the concept of experience is central in marketing and consumer research, it is
a theme still in development and not established either as a conceptor as an empirical phenomenon
(SCHMITT, 2011).
For Schmitt (2011) the concept of experience involves the perceptions, feelings and thoughts that
consumers have when they acknowledge products and brands and engage in consumption activities.
From a company's perspective, the experience occurs when services are used as stage and goods as
property in the process of engaging individuals in creating memorable events (PINE II; GILMORE,
1998).
As Dacko (2008) points out, the effectiveness of the interaction depends on the ability of the
experience as a whole in communicating the identity of a brand or company.
Pine II and Gilmore (1998) were pioneers in the study of the experience economy. According to the
authors, the era of experience economy requires a new marketing philosophy that prioritizes the
consumer experience. For this to happen, companies should change their strategies from selling
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
products and services, to focusing on the sale of consumer experiences (PINE II, GILMORE, 1998;
TSAI, 2005).
The traditional view of marketing, which focuses only on consumer satisfaction, is not able to keep
up experience economy (TSAI, 2005). The paradigm of experience marketing arises in this
scenario, seeking to make consumers to feel, think, act and relate to a brand or company.
Experience marketing seeks to build an emotional bond between the company and its customers
through a rich sensorial experience. Among its features, there is a holistic communication with a
high level of interactivity and engagement in a personal level with consumers (DACKO, 2008).
According to Schmitt (1999), the holistic perspective of the experience marketing takes in
consideration the sociocultural context in the moment of consumption, in both micro and macro
levels and boundaries of categories and competition. In general, this paradigm seeks to identify
attitudes and values shared by an audience, even if the lifestyle and characteristics of its members
are relatively diverse (TSAI, 2005).
Therefore, as proposed by Tsai (2005) and Holbrook and Hirschman (1982), the main focus is on
making the daily customers’ lives more enjoyable and happier. Thus, the emotion becomes a
prominent element to be managed by companies.
3. ELEMENTS OF EXPERIENCE MANAGEMENT
Understanding the emotions of customers involves great subjectivity and may be challenging for
most companies. To Berry, Carbone and Haecke (2002), the first step to manage customer
experience is to understand the clues given about the service or product - a clue being "anything that
can be sensed or perceived or recognized by its absence" (BERRY; CARBONE; HAECKE,
2002:1).
According to Berry, Carbone e Haecke (2002), experience clues may be of two categories. The first
concerns the functioning of the product or service itself. The second refers to perceptions such as
the smell, sounds, vision, tastes and textures of the products or services and of the environment in
which their consumption takes place.
The latter may still be divided in two kinds of clues:
 Mechanic clues – emitted by the products.
 Humanic clues – emitted by people.
To Berry, Carbone and Haeckel (2002), the functional category holds an essential character, and
therefore so does the functionality of the product or service. However, to the authors, the role of the
emotional clues (mechanic and human) is not fully clear in the customer experience (BERRY;
CARBONE; HAECKE, 2002). For mobile apps, the issue can become even more complex, since
the applications allow you to combine functionality and emotion, for example, when using a
photograph that can be shared with the user’s social networks.
Pine II and Gilmore (1998) agree on the contribution of managing the clues to create a unique
experience. Harmonize the impressions of clients with clues that affirm the positive nature of the
experience and contribute to eliminate negative aspects, which diminish or distract on the topic, are
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
some of the directions proposed by the authors. Other directions include stimulating all five senses
of the users and conducting experiments to ensure that they are part of their memories.
Since experience management has many diverse elements, Pine II and Gilmore (1998) propose
characterizing the experience on two dimensions.
The first one relates to consumer participation. This dimension can range from passive
participation, which does not affect the event experience, to active participation, in which the client
has a key role in the creation of the event that produces the experience.
The second dimension describes the connection or environmental relation that unites the consumer
to the circumstances of occurrence of the experience.
On one side, there is the absorption of the experience in relation to the environment, such as notes
taken during a lecture. On the other, there is the immersion in the experience that involves the
consumer - something like the feeling of being in a paddock of a Formula 1 race, surrounded by
sounds, sights and smells around you.
Four classes of realms of an experience are suggested by Pine II and Gilmore (1998), in addition to
the dimensions of participation and environmental relation.
The first is the realm of entertainment (e.g., watching television, going to a show) which tends to
include a more passive experience composed of an absorption connection.
The second realm refers to educational events (such as going to a class or learning how to surf),
which tends to be more active and absorptive.
The third is the realm of escapist experiences, which may be either educational or entertainment,
but primarily immersive. An example is to take part in a play or an orchestra.
Finally, by minimizing the active participation of the consumer, the experience starts to shift to the
fourth realm, of esthetic experiences – for example, a visit in an art gallery.
With the internet, the experience of using the iPhone and its applications can be located in any of
the realms.
Schmitt (1999) proposed another classification of experiences, according to the emotions they may
trigger in the consumers. For the author, the Strategic Experiential Modules - SEM should be
managed by companies through marketing experience.
Among the main elements of this model are: sense, feel, think, act and relate (Chart 1). The
structures and processes of these elements may vary and be different according to the environment
in which business and consumers are inserted.
Once the consumer is regarded as central to the production of experiences, the process of value
creation by the company should be guided based on interactions with the user, triggering a process
of co-creation, as detailed in the following section.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
CHART 1
Strategic Experiential Modules according to Schmitt (1999).
MODULE
EXPERIENCE CONTENT
Sense
Sensory experiences.
Feel
Affective experiences.
Think
Creative cognitive experiences.
Act
Physical experiences and lifestyles.
Relate
Social-identity experiences.
Source: Adapted from SCHMITT, B. Experiential Marketing. Journal of Marketing Management, v. 15, n. 3, pp. 5367, 1999.
4. VALUE CO-CREATION
According to Berry, Carbone and Haecke (2002), customer value must be comprised of functional
aspects of the product or service and the emotional benefits customers receive, minus the financial
and non-financial costs that support them. In summary, customer value must not be reduced to a
simple comparison between functionality and price.
In this scenario, value co-creation is defined by the experience of a specific customer involved in a
unique context. In different circumstances, the same individual may have different experiences,
which therefore cannot be determined a priori.
Thus, co-creation cannot be achieved without intentional consumer interaction with a network of
organizations and communities that provide consumers with the occurrence of personalized
experiences (PRAHALAD; RAMASWAMY, 2003).
The heterogeneity of the consumer base and of the contexts in which they are inserted makes
impossible the management of individual experiences by members of the network. The challenge
lies in the ability to accommodate this heterogeneity through the creation of spaces of experience,
enabling the potential occurrence of a variety of co-creation experiences.
The utility of each offering becomes defined by the context, which may also consider other
products, services and experiences that eventually impact the way the user handles the good or
service purchased (LUSCH; VARGO; WESSELS, 2008).
Customizing the co-creation process means fostering individualized interactions and the results of
the experiences. Thus, it involves more than simply offering a "à la carte menu" (PRAHALAD,
RAMASWAMY, 2004:10), which maintains the locus of value creation centered on the company.
The process should reflect the ways the individual chooses to interact with the space of experience
facilitated by the company.
It is precisely the set of potential experiences offered that determines consumer willingness to
interact with businesses (PRAHALAD, RAMASWAMY, 2003).
Central to this approach is the adoption of collaborative procedures and methods between
companies (LUSCH; VARGO; WESSELS, 2008). Organizations should consider the networks that
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
surround the experiences, in which a nodal company becomes responsible for bringing together
suppliers, partners and consumer communities into building the necessary infrastructure for creating
personalized interactions with consumers.
Conceptually different from traditional supply chains, experience networks involve nonlinear and
non-sequential interaction flows between organizations and communities of active participating
consumers (NORMAN; RAMIREZ, 1993; PRAHALAD, RAMASWAMY, 2003).
In the context of the experience economy, companies remain as providers of physical products,
however, subject to commoditization.
Therefore, the key to achieving new sources of competitive advantage is by promoting interactions
of high quality, allowing the creation of unique consumer experiences (PRAHALAD;
RAMASWAMY, 2004).
To make the experience as part of a value proposition for the customer to be fully exploited by
organizations, Berry, Carbone and Haecke (2002) suggest that organizations must manage the
emotional component of experiences with the same rigor they bring to the management of product
and service functionality.
However, regardless of the classification of the experience and how the company strategically
manages this resource, there is no guarantee that the organization will be successful.
One problem, as noted by Pine II and Gilmore (1998), arises when the company charges a higher
value than the one perceived by the customer. However, since the demand becomes contextual
(PRAHALAD; RAMASWAMY, 2004), observing and talking with customers about their
experiences become crucial for obtaining a deeper understanding of the clues that are offered by
them during their encounters with the company or product. Thereby, it helps to identify aspects that
would favor the creation of value in these circumstances.
5. METHODOLOGICAL PROCEDURES
The method used in this study is qualitative and exploratory, implemented to achieve greater
familiarity with the research problem (GONÇAVES; MEIRELLES, 2004).
The option of a qualitative research is justified by the need to obtain greater depth about the
phenomenon under study.
The complexity and scope of events require methodological procedures that allow the capture of all
the details that will be useful for the analysis, in order to ensure a holistic view of the phenomenon
(CRESWELL, 2007).
The research strategy adopted was a multiple case study (Yin, 2005), aiming to explore the
experiences of individuals with Apple-branded smartphones.
In order to identify the main elements of the experience of a smartphone consumer through the use
of applications and also to understand the creation of value through the experience of the consumer
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
with the product and its applications, interviews were conducted with iPhone users using semistructured questionnaires.
Apple was chosen because of its brand equity, which places the brand as a benchmark in its
segment, exhibiting great value to its clients (PALAIO, 2011).
The relevance of the study of the applications economy can be observed in the study by Mandel
(2012), which estimates that have been created over 460,000 jobs related to the development and
commercialization of applications in the United States alone, since the launch of the iPhone by
Apple in 2007:
Nothing illustrates the job-creating power of innovation better than the App Economy. The incredibly
rapid rise of smartphones, tablets, and social media, and the applications—“apps”—that run on them, is
perhaps the biggest economic and technological phenomenon today. Almost a million apps have been
created (…) greatly augmenting the usefulness of mobile devices (MANDEL, 2012:1).
CHART 2
Summary of the main phases of the study.
PHASE
1. Review of
the literature
ACTIVITIES
Review of the experience elements as discussed in
the existing literature. Gathering of secondary data to
contextualize the study area.
2. Pilot
Conduction of an interview to validate the
interview
questionnaire and to identify points of improvement.
3. Data
Conduction of semi-structured interviews in order to
gathering
understand the experience of the users involved in the
interaction with the smartphone and its applications.
4. Data
Investigation of the interview transcripts in search of
analysis
correspondences to the experience elements
identified in the literature and other subjects of the
analysis plan.
5. Validation
Review conducted by an outside researcher.
Source: Created by the authors.
MAIN METHODS AND
PROCEDURES
Selection of papers in journals,
books and internet.
Pilot questionnaire application and
review.
Semi-structured in-depth interviews.
(1) Pre-analysis, (2) Exploration of
the material, (3) Processing and
interpretation of results.
Peer debriefing.
The methodological steps taken began with a literature review, followed by the conduction of a
pilot interview (Chart 2). After an adaptation of the semi-structured questionnaire, new interviews
were performed, with a total of eleven interviewees, among men and women from 23 to 47 years
old.
The study sought to ensure diversity among the interviewees (Table 3) in order to better represent
the range of iPhone users and to find the application usage patterns among them.
Data collection was conducted through face to face in-depth interviews, applied individually. The
choice of in-depth interviews was due to the fact it is a suitable technique for collecting information
about feelings, beliefs, intentions, actions and detailed dimensions of the proposed analysis, as
pointed out by Gil (1999). Interviewees were instructed about the research purpose and the
experience concept used in the paper.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
Each interview lasted an average of thirty minutes and aimed to understand the relationship between
the user and their product as a whole, from the purchase to the daily use of the product and its
applications.
Subsequently, the data were subjected to content analysis to find elements cited by interviewees,
comparable to marketing experience theory - including Pine II and Gilmore (1998), Schmitt (1999)
and Berry, Carbone and Haeckel (2002).
The content analysis was done through the categorical analysis technique. Hence, thematic
categories were prepared (in this case, the topics were chosen) to infer the results (BARDIN, 2008;
MOZZATO; GRZYBOVSKI, 2011) and followed three main steps.
The first step was the pre-analysis, in which the ideas were organized into a plan of analysis
(BARDIN, 2008). During this stage, the units of meaning were elaborated, based on the evidence
presented in the transcripts (MINAYO, 1998) and the theoretical propositions that led to the case
study (YIN, 2005).
At first, the units of meaning (themes chosen to be encoded) were limited to the elements of the
experience in the literature (see, feel, experience, action, relationship, memory, product
functionality, application functionality and economic value).
However, after an initial reading, other issues were also considered, such as, users' core values,
motivations for product purchase and repurchase, relationship with the Apple brand, and negative
aspects perceived by Apple users. This was a critical step since this is an exploratory study of
multiple cases. Then, the analysis plan chosen was replicated for all interviews.
The second stage of content analysis involved the examination of the material collected, for closer
proximity of the researchers with the data, and the clipping of excerpts from the interviews in
comparable units. This step required to identify the logical units (themes) on each of the transcripts.
Thus, all interviews were grouped into units of meaning and subsequently grouped into categories
corresponding to the elements of experience gathered in the literature review.
Finally, during the last stage of the content analysis (treatment and interpretation of the results) it
was possible to make inferences about the identified patterns (YIN, 2005). The analysis resulted in
a synthesis and highlighted information, as emphasized by Mozzato and Grzybovski (2011). A
qualitative analysis was performed by both authors to cross the results.
Peer debriefing took place to validate the data (CRESWELL, 2007), in which an external researcher
was responsible for reviewing and asking questions about the study in order to pass beyond initial
reports considered by the authors. Finally, the obtained results are shown below.
5.1 DESCRIPTION OF STUDY AREA
The global market of mobile applications recorded revenues of US$ 10 billion in 2009. It is
expected to reach US$ 32 billion by 2015 (JUNIPER RESEARCH, 2010). The number of
smartphones sold, mobile devices equipped with high-capacity computing that functions as
platforms for software applications, is increasing significantly, both in Brazil and in the world
(GARNER, 2011).
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
Recent surveys estimate there are 19 million smartphones in the country, reaching a growth of
165% between 2010 and 2011 (CAVALLINI; REIS, 2011). It is expected that, by 2015, there will
be over 58 million smartphones in Brazil, which will account for one quarter of total mobile devices
in the country (CISCO, 2011).
With the growth of this market and the increasing spread of the use of other mobile devices such as
tablets, the opportunities related to software applications are also growing. Applications are
complete and independent programs that perform specific functions directly to the user.
The Apple App Store, the virtual platform of the North American company for commercialization
of applications, reached, in 2013, the mark of 50 billion downloads alone (APPLE, 2013). The
boom experienced by the applications market suggests a transition in the locus of value creation by
firms – from a vision focused on the product, to a view focused on customer experience.
The App Store works through a platform model that integrates a collaborative community in the
process of creating value for users (BOUDREAU, 2009). In this model, smart phone manufacturers,
such as Apple, are the nodal network of the experience network formed, as suggested in the
framework proposed by Prahalad and Ramaswamy (2003).
The App Store allows the development of a network of application suppliers, which is diverse and
constantly expanding thanks to its low entry barriers. It currently consists of more than 170,000
developers in the U.S. alone (148APPS.BIZ, 2012).
6. RESULTS E DISCUSSION
Through the conducted research, it was possible to identify the elements related to the experience of
iPhone users and the unique value provided by the smartphone of each respondent.
Among the results, the themes to be developed consist of: the core values of the users, the
motivations of purchase and repurchase of smartphone users, the elements of the customer
experience, the relationship between the Apple brand and its users, and the negative aspects
associated to it.
Core values of users - One of the main findings in this study concerns to the fact that the
applications are central to the creation of value by each user when handling their smartphones. This
conclusion could be reached by analyzing the responses of respondents, who were categorized as
shown in Chart 3.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
CHART 3
Core value assignments of Apple Smartphone users.
NAME
AGE
E1
23
E2
23
E3
24
E4
27
E5
28
E6
28
E7
29
E8
30
E9
31
E10
36
E11
47
Source: Created by the authors.
PROFESSION
International Analyst
Production engineer
Student
Dentist
Lawyer
Occupational Therapist
Planning Technician
Interpreter and translator
Public Server
Teacher
Veterinarian /Administrator
GENDER
Male
Female
Female
Male
Female
Female
Male
Female
Male
Female
Female
MAIN CORE VALUES
ASSIGNED
Relationship
Games, interaction
Study, interaction
Games, interaction
Leisure, music, research
Brand, work, bank
Communication, brand
Brand, Photos
Communication, brand
Games for son, e-mail, bank
Work, trips
Some respondents also clearly highlighted the integration of the smartphone to their daily lives:
Among the [applications] that come on the device, I use the email and Safari [browser] a lot. From the
ones I got, I often use Whatsapp [messaging] – the frequency depends on the day and if I'm exchanging
messages with colleagues, Instagram [photography] – about three times per day, Facebook [social
network] whenever I get a notification, and Messenger [messaging] in accordance with the flow of
messages I exchange in the day. E3.
My son plays and he always asks me to download a new game. E10.
In this sense, it becomes clear the existence of value creation by the users, which is strictly related
to their lifestyle and routine. Still, through the interviews, different patterns of the usage of the
iPhone and its applications were found. Respondents who use the device with a professional
motivation reported a more frequent use of applications such as calendar, e-mail and document
viewers, while others preferred games and programs for messages exchange.
Motivations of purchase and repurchase of smartphone users - Among the main reasons for
buying the iPhone, the physical characteristics of the product, such as design and touch screen were
recurrent. Most respondents stressed the interactivity and the ease of use, especially with regard to
the touch commands. A variety of applications available has also been mentioned as decisive for the
purchase.
Amid the respondents, those with previous versions of iPhone (iPhone 3GS or 4) said they were
satisfied with the product. The focus on experience is evident in the fact that respondents said they
did not intend to promptly acquire the latest models of the product, since they didn’t acknowledge
value in newer models to justify the purchase, as told by interviewee:
When my [iPhone 3GS] gets very outdated, I'll change it. Every time they come up with something
different, so I do not know what will determine the time of exchange yet. At the moment, I'm just not
entirely satisfied with the quality of the camera, but I don’t see the need to change it. For now, I do not
see many differences with the newer model [4S]. E11.
On the other hand, respondents that attributed high value to the brand said they would buy the
product in the near future:
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
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Sure, I always buy the new iPhone version when it arrives and everything that’s Apple. E8.
Yes [I would buy the newest version]. My iPhone is already starting to present problems. E10.
It is interesting to note that in the last answer, even a problem in the device would not prevent the
purchase of another of the same brand. In this sense, the value assigned to the Apple brand was
recurrent in several interviews, highlighting the brand perception as positive as a whole, even in
cases where a memory or an asset was perceived as negative.
The existence of unique applications for iPhone was another factor that influenced the smartphone
purchase over other similar products equipped with Android operating system, for example:
The App Store has apps that do not run on other platforms, as was the case with the Instagram for a while.
You could only access it with the iPhone. E7.
Another factor that affected the observed buying behavior was the influence of reference groups
such as family and friends (GRØNHAUG; KLEPPE, 2010).
This influence was also observed in the process of downloading apps, once the recommendation
was indicated as one of the greatest reasons to purchase the device (whether free or upon payment).
Elements of the customer experience - According to the literature, the elements of the experience
may be of emotional or functional basis (BERRY; CARBONE; HAECKEL, 2002).
The interviews made it possible to deploy the elements indicated by experience marketing theory
and to relate them to the value creation by Apple smartphones users.
Among the emotional elements found there are: perceive, feel, think, act, relate, (SCHMITT, 1999)
as well as a new element indicated by Pine II and Gilmore (1998), the memory.
Related to the functional elements we list: the product functionality, the applications functionality,
and also the economic value (BERRY; CARBONE; HAECKEL, 2002). Chart 4 illustrates the
occurrence of these elements in the interviews.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
CHART 4
Elements of the experience of iPhone users leading to value co-creation.
ELEMENTS
AUTHORS
INDICATIONS OF ELEMENTS OF EMPIRICAL EXPERIENCE
Perceive
Schmitt (1999)
I got a clock application which is great. It emits both sounds and lights. E1.
Feel
Schmitt (1999)
I really like the iPhone for everything. E8 / There are many applications
that are fun at the time, but lose it very fast. E11.
Think
Schmitt (1999)
I'm a bit addicted to seeking new applications, I usually take a look at the
App Store every week. E3.
Act
Schmitt (1999)
Applications I download every week. E4. / As for applications, they do
portray my lifestyle. Many applications of reading, communication, travel
and some games. E9.
Relate
Schmitt (1999)
[The iPhone offers] all communication networks that I need and I use. E2 /
I always get applications that someone used and enjoyed. E3
Memory
Pine II e Gilmore
(1998)
I bought the iPhone in my exchange program [United States]. E1 / When I
bought the iPhone there were only Blackberry and iPhone for smartphone
options. E5.
Product
Functionality
Berry, Carbone e
Haecke (2002
[IPhone 4] has a frontal camera. E8 / I found interesting, both the design
(...) and the features [iPhone]. E1.
Applications
Functionality
Berry, Carbone e
Haecke (2002)
And there is an application that I'm using a lot, the Instagram (...).It is for
photos. You take and share photos. E6.
Economic
Value
Pine II e Gilmore
(1998)
Although the iPhone has a closed [operating] system, there are many free
apps. E7 / Normally, for every paid application there is a similar app that is
free. E5.
Source: Created by the authors.
One factor worth mentioning is the economic value. The price was presented by some respondents
as crucial to the applications’ choice, many opting for those softwares offered for free. Those who
paid for the acquisition of an application only did it because they could not find a free version that
offered the same functionality. This conclusion contradicts the assertion that:
To realize the full benefit of staging experiences, however, businesses must deliberately design engaging
experiences that command a fee (PINE II; GILMORE, 1998:98).
Therefore, the price (or gratuity) is a very important factor influencing the experience of creating
value for users of smartphone applications.
Relationship between users and Apple brand - The high frequency of applications’ downloads
indicate the ability of the App Store to meet the demands of its users. All the respondents claimed to
be satisfied with the platform, emphasizing its ease of use and the diversity and variety of
applications available.
[The App Store] offers free devices, and facilitates the search when I want something specific. It has
everything I need. E1.
Everything I seek [at App Store] I find. E2
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
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The usefulness of the applications was a recurring issue. Many stressed the fact that each
application meets a specific demand. Thus, the set of multiple applications purchased - all
respondents claimed to have at least 20 applications, reaching 150 in some cases - contributes to the
creation of unique experiences according to the context experienced by the user.
There is an application for everything. E2.
The advantage of the application is that they have a very specific functionality that and one can access
what you want very fast you. E1.
Applications are very specific, each one has a utility, depending on the time that I need it. If I need to
know an address, I use Google, for example. If I need to check an appointment, I consult my schedule.
E11.
Therefore, it is possible to infer that the various combinations of applications lead to product
differentiation in the hands of consumers. The high possibility of customization according to
interests and needs allows the company to achieve various market segments with a single product.
Negative aspects associated to the Apple brand – Even though Apple is a reference brand and
many respondents have positioned themselves favorably to it, some clues were provided by them. It
is worth noticing that finding negative perceptions about the Apple brand was not the focus of this
research, neither of the proposed questions. However, this issue was found in the speech of some of
the interviewees.
The iPhone alarm clock is unbearable. E1.
I do not listen to music on the iPhone very much because it discharges very fast. E1
I'm just not fully satisfied with the quality of the camera. E11.
There could be different ringtones, I don’t like the songs available. E11.
These phrases are in accordance with Pine II and Gilmore (1998) who claim that customers can
provide clues about their experience. Thus, the management of these clues in order to eliminate the
negative ones can contribute to both innovations in new product versions and to improve
relationships with current customers. It is worth mentioning the example of one of the interviewees,
which brings evidence on the relationship with customers from the App Store:
I once bought an application [in the App Store] which cost 0.99 Euros and they charged me 9.99 Euros. I
wrote them and half an hour later I had the money back placed on my card, and they offered me the
application [for free]. E8.
Thus, the possibility of service recovery when faulty is also a way to improve the relationship
between the company and the service user. In accordance with Gilmore (2003), technology is
enabling new ways to create synergies between industries, suppliers and consumers. In Apple’s
case, the App Store platform enables more sophisticated communication between users and the
company.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
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7. FINAL REMARKS
The fast expansion experienced by the applications market is related to the transition to an
experience economy. By providing an extensive range of options for unique interactions, creating
space for the combination of functional and emotional aspects, companies such as Apple develop a
significant competitive advantage compared to its competitors. The iPhone maker enjoys a
privileged position on the global scenery, having achieved the top ranking of market value
companies (FINANCIAL TIMES, 2012). Such recognition was also demonstrated in this study, in
the form of brand appreciation by the interviewed consumers.
Hence, as pointed out by Prahalad and Ramaswamy (2003), it becomes imperative to gradually
introduce the marketing experience as the main focus of the innovation process. Once, unlike
products and services, experiences cannot be commoditized, only companies that achieve above
average results through differentiated offerings can achieve value co-creation with consumers.
The key, as stated by Berry, Carbone and Haeckel (2002) is on how companies manage
experiences. To ensure competitive success, a growing number of organizations apply the principles
and tools of customer experience management as a way to primarily foster their loyalty. As noted in
the case of the App Store, which allows more concretely the management of an experience network,
it is also necessary to invest in structuring a space that enables collaboration and, thus, fosters cocreation.
It was possible to achieve the objectives proposed by this study, by understanding the possible ways
the smartphone user obtains unique experiences through the same product. The applications usage
adds unique value to the product and allows value to be co-created beyond the initial iPhone value
proposal. Perceptions, actions, thoughts, feelings, relationships, memory and economic value were
some of the elements found on the experience when using the iPhone. Furthermore, the physical
attributes such as design and functionality were also mentioned by the respondents. The brand value
was another attribute of the smartphone that has shown to have influenced both the buying behavior
of some users and their future purchase intents.
Applications contribute to the reputation of iPhone and Apple, while the App Store contributes to
the continuity of the interactions between the brand and its customers. Through the applications
commercialization platform, Apple maintains a collaborative network that contributes to the
innovation process. The generation of ideas and their development are left to developers affiliated
to the App Store, while Apple manages marketing and promotion actions and upholds the quality
standards, in similarity to processes of open innovation (CHESBROUGH, 2003).
This research is limited due to its methodological approach, which does not allow generalizations.
The number of respondents and the personal information collected are also subject to external
influences and biases that have not been identified by researchers, due to the high degree of
subjectivity from projective techniques, including in-depth interviews (FRANCISCOMAFEZZOLLI et al. 2009). Likewise, since the phenomenon of applications is recent, it still
presents few academic publications to explain theoretically the research topic and, thus, deserves
further investigation. Furthermore, only one company was focused (Apple) and may not match the
reality of smartphone users of other brands.
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
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Moreover, this research points to further studies that may seek relationships between age or gender
and the behavior of smartphones users. Another possibility is to study the clients’ clues in relation
to a reference brand in the cellphone industry such as Apple. It is possible to extend the search for
both a quantitative analysis and for users of mobile devices other than those manufactured by
Apple. Understanding the company’s management reality may also complement this study, which
was narrowed to smartphone users.
Among the managerial implications, this paper reaffirms the importance of the experience economy
proposed by Pine II and Gilmore (1998), indicating that more companies should go beyond the
focus on products and services and provide a complete customer experience. Thus, as the authors
propose, managing customers’ clues, stimulating all the five senses of the users and conducting
experiences which can take part of their memory, may consist of strategies to be adopted by
companies. Finally, value co-creation can also be used strategically by businesses, enabling the
innovation of its products and services according to the value perceived by their users.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
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Appendix 1 - Script for in-depth interviews
This research is developed by the Center of Studies and Strategies of Integrated Marketing
Communication, from the Federal University of Minas Gerais. We intend to understand the
relationship between the use of iPhone applications and the experience provided to its users.
Experiences are all perceptions, feelings, thoughts and memories that consumers have about a
product or service.
Thank you for contributing to this research. Your data and information is confidential and your
name will not be exposed at any time in the research. However, we would like to ask for your
consent to publish your answers exclusively for academic purposes. If you are interested, we may
contact you to disclose the results of this research. In addition, our contact can be made through the
following e-mails: ... or...
Instructions:
Please answer the questions below according to your perceptions.
Date:
Name:
Age:
Profession:
IPhone version:
1. How long have you had an iPhone?
2. Who was responsible for purchasing the product?
3. What was your motivation to buy the iPhone? (If presented, what was the motivation of the
person who gave it to you).
4. Why did you choose the iPhone instead of a similar device? (If presented, it is not necessary to
answer).
5. Would you buy the newest version of the iPhone? Why?
6. For what purpose do you use your iPhone more often?
7. Do you own applications? How many?
8. Have you joined the AppStore, the application store from Apple? Feature your experience with
this platform.
9. Which applications do you use most and how often? Are they different from the applications
you used in the past month?
10. What are the benefits of your applications? You may exemplify through applications you have.
11. How often do you download an application?
12. What criteria do you use to download an application?
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
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The Smartphone Experience Marketing: Cocreating Value through Mobile Apps
Mariana de Freitas Coelho / Pedro Ferraz de Andrade Augusto dos Santos
13. Have you already paid for any application? Why?
14. Do your applications contribute to your relationship with other people? If so, give examples.
15. Is your iPhone is similar to you? If so, why?
Thank you for being part of this study and to contribute to the achievement of our goal.
Do you authorize the publication of your responses for academic propose only?
( ) Yes ( ) No
Please leave your phone and email contacts for future contact in order to clarify any questions and
for feedback about the research.
E-mail:
Phone:
PMKT – Brazilian Journal of Marketing, Opinion, and Media Research (ISSN 1983-9456 Print and ISSN 2317-0123 Online), São Paulo, Brasil, V.
13, pp. 46-66, October, 2013 – www.revistapmkt.com.br
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