Value in smartphones (2004 to 2013)

Richard Ferrers edited this page Mar 17, 2017 · 20 revisions

This case I wrote my PhD on asked the question "how do consumers understand value in their 3G mobile phone?" Back in the nougties, they weren't very smart phones, but nowadays they are and easier for readers now to understand with that name.

In this case, I want to introduce and demonstrate:

  • there are many types of value, I call 'value elements'
  • types of value vary by person
  • for smartphones, some types were noted by every person
  • the value types can be conveniently shortened to a short list of 12 value dimensions
  • the value types appear based on activities, which together form a value process.

Advanced topic: how do value types vary for a person over time? More work required on this topic, and it is not covered in my Phd.

Introduction / Background

Why smartphones? 3G had just launched in Australia in 2003, so as I wrote my proposal in late 2003, 3G mobile phones were a very new technology consumers were thinking about buying. There were new 3G stores from Hutchison Whampoa, called '3' and some marketing money being splashed around on a football team, the national cricket team, brochures, big value phone plan, and so on.

How did I collect my data? I interviewed a number of consumers (N=23) and telco analysts (N=10) about why and how people would buy 3G phones. See Table 2, p.39 in Ferrers (2013). The methodology I used, grounded theory (see Wikipedia), aimed for theoretical saturation (see more at Wikipedia on Theoretical Sampling). Theoretical saturation means you keep interviewing until the stories start repeating. You vary the interviewees by types, aiming for types who are likely to have different answers. So I started with young international students who I observed with 3G phones in one city, Brisbane. Then older couples with 3G phones in Melbourne. Then country people to see if they had a different story, then office professionals. Value kept coming up in its many manifestations. I used a coding system when I recorded the interviews and gave people codes as identifiers such as V006, a 46 year old Greek man, a father who lives in Prahran, Melbourne or MIC014, a 25 year old Chinese postgraduate student. The codes eliminate any preconceptions that using a fake name might create. A comprehensive description of the research methodology (35pp) forms Chapter 2 of the PhD (Ferrers 2013).

Many types of Value - the Value Elements

I use elements more like the Periodic Table rather than components, though in my data consumers mentioned many value elements. Each element is different. On reflection, I postulated that there may be limitless elements, since they were a benefit that a consumer links the product with their context. I will provide some examples. But a limitless list is not really helpful for anyone, so I condensed (clustered) the value elements - see value dimensions (or value meanings).

Here are some examples from the PhD Data.

Value elements by consumer Fig S1: What do consumers value in smartphones? NB: The * items are value dimensions.

You can see the count of Value elements by interviewee. Figure 11 - Value in Pictures.

You can see the matrix showing which consumer identified which Value dimension. See below - Figure S3.

Universal Value Dimensions

Four types of value appeared for each smartphone consumer (see items shaded in Fig S1 above). These value dimensions were:

  • price; what does it cost
  • function; what does it do
  • time; when can I have it
  • service / reliability; does it do what I want it to do, or can I get help when I need it.

It is uncertain for other technologies or objects, whether these dimensions will always be found. In seven triangulating datasets, the universal dimensions did not always appear. For instance when a service was free, price did not appear. Where a future technology was discussed, mention of its reliability did not appear. In advertising material, service/reliability did not appear. See Table 6, p.104 in Ferrers (2013).

Function and time appeared in all triangulating data. Price appeared in all but two triangulating datasets (not mentioned by telco analysts or in relation to a free news service). Service/reliability was missing in two datasets (a future technology and a free news service, and low in two others (3G advertising brochures and an ebook reader) in comparison to its high frequency mention by consumers.

Other Value Dimensions

There were eight other dimensions noted in the smartphone interview data (from most to least common) that were not universal:

  • new (70%)
  • emotion (70%)
  • simple (60%)
  • need (60%)
  • duty (60%)
  • power (40%)
  • connection / community (40%)
  • beauty (30%).

The value dimensions can be conveniently displayed on a circle (relative frequency cited by consumers not shown).

Source

Figure S2 - Value Dimensions found in Smartphone interviews (2011).

A graphical version showing which consumers identified with which value dimensions is shown in Figure S3.

Value Dimensions by ConsumerEnlarge

Figure S3 - Value Dimensions found in Smartphone interviews. Appendix 5 in Ferrers(2013).

Several other value elements were clustered within value dimensions. See Appendix 2, p. A7 in Ferrers (2013).

Value Dimension Value Elements
Function tool, use, fun*, play*, potential, accessories, archive
Price bonus, free, pay later, pay less, something for nothing, expensive*
Time convenience, quick, timely, delay*
Service/Reliability warranty, solution, standard, personalise, problem*, trouble*
New learning, different, interest, important, potential, relevant, known*, old*, past*
Emotion exciting, love, surprise, trust, less stress, reason*, logic*
Need necessity, necessary evil, don't need*, pleasure*
Simple complex, doubt, uncertainty, bundle, easy, clarity, complex*, doubt*, uncertainty*
Duty commitment, parental, interest*, choice*
Power control, flexible, freedom, mystique, secure, unlimited, powerless*, limits*
Community brand, status symbol, disconnection*, privacy*
Beauty size, style, complete
NB: Negative items included within dimension are marked with *. Since negative items also appeared in discussion, each dimensions is though of as a continuum from good to bad. So price can be high or low, attractive or not attractive. A product can be simple (good) or complex (bad). This continuum of impact/attitude did not seem to distract from the unity of the value dimension. Some elements were linked to multiple dimensions, but usually they fitted well within one dimension. Two value elements proved difficult to allocate to a single value dimension were: sexy and cool.

Comparing Value dimensions with the value literature

The value dimensions were found across the literature, particularly Richins (1994), Holbrook (1996), Zeithaml (1988), Flint, Woodruff and Gradual (2002). For detail linking of value dimensions with the value literature see Appendix 2, Part 2 Ferrers (2013). No dimensions were found which were unsupported in the literature. So the consumers in talking about smartphones seemed to produce a superset of dimensions found in the value literature.

The Value Process

Along side the Value Dimensions were activities I call Value Practices. Some of these are personal or individual and some are social.

The personal ones include:

  • exploring, finding new information or experiences
  • comparing, making some sense of that new information by comparing to what already know or have seen
  • filtering, excluding some information as not relevant
  • closing, blocking some sources or types of information as not relevant

The social activities include:

  • observing, seeing what social peers are doing
  • inquiring, asking for information from social peers
  • recommending, getting specific information from your social peers

Other relevant information comes from, in the case of smartphones, the vendors or salespeople, including:

  • inducements, such as special offers, discounts
  • lock-in, through contracts.

You can see a comprehensive model of the Value Process, including value dimensions (or value meanings) and value practices here. This diagram is Figure 4, p.127 in Ferrers (2013). Simple diagrams of the process - refer Value in pictures.

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