Social Media and Service Innovation in Tourism - Research Opportunities from a Service Dominant...

Marianna Sigala, University of the Aegean, Greece

ENTER PhD workshop 2014

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Social Media and Social Media and Service Innovation in Tourism: Service Innovation in Tourism:

Research Opportunities from a Research Opportunities from a Service Dominant ApproachService Dominant Approach

Social Media and Social Media and Service Innovation in Tourism: Service Innovation in Tourism:

Research Opportunities from a Research Opportunities from a Service Dominant ApproachService Dominant Approach

Marianna Marianna SigalaSigalaUniversity of the AegeanUniversity of the Aegean

Service Dominant ApproachService Dominant ApproachService Dominant ApproachService Dominant Approach

Product dominant logicProduct dominant logicThe market is separate from the The market is separate from the

value creation processvalue creation process

The consumer The MARKET

The firm creates value

destroys value: Is a target for

the firm

VALUE-IN-EXCHANGE

Intermediaries facilitate the Intermediaries facilitate the transfer of value transfer of value

ProductProduct, , possessionpossession, , placeplace, , credibilitycredibility & & time utilitiestime utilities

Assumptions about the marketAssumptions about the market

The market exists, is given and stableThe market exists, is given and stable

The market is a target to exploitThe market is a target to exploit

The market is a constrain to a firm and it The market is a constrain to a firm and it has to be managedhas to be managedhas to be managedhas to be managed

Market understanding, sensing and Market understanding, sensing and forecasting are the key issuesforecasting are the key issues

Information alertness and awareness are Information alertness and awareness are mustmust

RERE--ACTIVE ACTIVE

Service dominant logicService dominant logicThe market is integral of the The market is integral of the

value creation processvalue creation process

The firm: The consumer:

Collaborator in co-creating value and competitor in

extracting economic value

Collaborator in co-creating value and competitor in

extracting economic value

The Market:

The Market: is a service ecosystem responsible for the co-creation of experiences of value-in-context of an individual

at a specific moment and place

PDL SDL

Role of customers Use – destroy value created by firms

Co-create value by integrating resources

Role of firms Create value Create value propositions

Role of goods Embed value Vehicle of operant resources

Creators of value Firms – value chains Actors, network partners, firms, customers

Process of value creation

Value is added by adding attributes

Value co-creation

Value driver Transaction value Value in use / value in context

Measurement of value Nominal value of exchange

Adaptability, viability of the actors

Purpose of value creation

Firm Profits Mutual betterment

Resources used Operand resources Operant resources

The market is a forum/space for The market is a forum/space for coco--creating tourism experiencescreating tourism experiences

Value is not distributed but coValue is not distributed but co--createdcreated

Markets and Demand are contextual (space Markets and Demand are contextual (space + time)+ time)+ time)+ time)

Markets do not preMarkets do not pre--existexist

Markets are dynamic and ever changingMarkets are dynamic and ever changing

The aim is to collaborate with customers to The aim is to collaborate with customers to coco--create marketscreate markets

PROACTIVEPROACTIVE



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Thus, to coThus, to co--create value, create value, firms must be able to:firms must be able to:

Access, adapt and integrate resources from Access, adapt and integrate resources from network partners and make their resources network partners and make their resources

accessible, adaptable and accessible, adaptable and integratableintegratable

CoCo--creation within the context creation within the context ofof

cybercyber--intermediariesintermediaries

CUSTOMER RESOURCES•UGC: wikis, customer reviews, videos•Social Capital: (networks

d l ti t l )

SOCIAL WEB ADVERTISING

Campaigns

FOURSQUARERedefine how we live in a city by inviting friends and experiencing places also with those not being there

Tripadvisor

•Selling licenses•Selling Ads•Selling reputation monitoring services and relations amongst people)

•Trust creation: reputation systems•eWOW•Collective Sense making (folksonomy)•Collective ranking of importance•Collective sentiment analysis

FACEBOOK-social graph for personalisedadvertising and information provision

services

TOURISM FIRM•Promotion •Service improvement•Competitor benchmarking – innovation

MARKET INNOVATION is A MARKET INNOVATION is A CONTINUOUS WORKCONTINUOUS WORK--ININ--PROGRESSPROGRESS

A value creation ecosystem that can A value creation ecosystem that can l d idll d idl ddscale up or down rapidly scale up or down rapidly and and

reconfigure its reconfigure its resources in real time resources in real time to to accommodateaccommodate shifting consumer shifting consumer desires, to desires, to discover, discover, influence and influence and create latent needscreate latent needs, and allow the co, and allow the co--creation of creation of personalisedpersonalised experiences experiences

Social seating applicationSocial seating applicationKLM with Meet and SeatKLM with Meet and Seat

Select who seats next to you based on Select who seats next to you based on FacebookFacebook , , LinkedinLinkedin profile etc profile etc



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Tourism Intermediaries should continuously upgrade their

service ecosystem by ‘plug & y y p gplaying’ new actors that can

exchange and integrate resources for co-creating value !

DEDE--think of think of service distribution service distribution

RERE--think of think of service participatory design and service participatory design and value covalue co--creationcreation

DEDE--Think of Think of distribution chains (sequential)distribution chains (sequential)

Re-Think of distribution networks and open distribution networks and open ppecosystems (value flows in any direction)ecosystems (value flows in any direction)

DeDe--Think of Think of C2B, B2C, B2B, B2C ….. ModelsC2B, B2C, B2B, B2C ….. Models

Re-Think of ActorActor--22--Actor interactions and Actor interactions and resource exchange interfaces (everyone is an resource exchange interfaces (everyone is an actor)actor)

What is the role of distributors in a market ?

To enable and To enable and educate customers educate customers how to cohow to co--create valuecreate value

Provide customers with Provide customers with access to resources access to resources at at th i ht l ti it ti / t t dth i ht l ti it ti / t t dthe right place, time, situation / context and the right place, time, situation / context and space for integrating them and creating valuespace for integrating them and creating value

Create an open environment Create an open environment for enabling the for enabling the actors to meet and exchange resources for coactors to meet and exchange resources for co--creating valuecreating value

Enhance and support the Enhance and support the creativity of customers creativity of customers

IntegratedIntegrated--connected capabilityconnected capability

a critical asset for building aa critical asset for building aa critical asset for building aa critical asset for building acompetitive business modelcompetitive business model

The HRS friends app, which is in beta, shows users a The HRS friends app, which is in beta, shows users a map of where their map of where their FacebookFacebook friends live or where friends live or where they have recently checkedthey have recently checked--in in using the social using the social networknetwork

The app also enables users to view The app also enables users to view available hotels available hotels in in the the areaarea where friends or people within their group where friends or people within their group p p g pp p g plivelive or search for properties with or search for properties with those ‘likedthose ‘liked’ by ’ by friends highlighted in the results.friends highlighted in the results.

FacebookFacebook checkcheck--ins ins and data from and data from FoursquareFoursquare are are also used to create a also used to create a heatmapheatmap of areas of interest of areas of interest in a in a city enabling city enabling travellerstravellers to draw on friends’ to draw on friends’ experiences before experiences before finalisingfinalising plans.plans.



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If firms have to create markets, If firms have to create markets, then… how they can do it? then… how they can do it?

WHAT IS A MARKET WHAT IS A MARKET

AND AND

HOW MARKETS ARE FORMED HOW MARKETS ARE FORMED AND EVOLVED ?AND EVOLVED ?

'the term market is 'the term market is everywhere and nowhere"everywhere and nowhere"

((VenkateshVenkatesh et al., 2006: p. 252)et al., 2006: p. 252)

Market theories should Market theories should recogniserecognise that:that:

markets do not simply exist, but rather markets do not simply exist, but rather they are formed and are continuously they are formed and are continuously evolvingevolvinggg

markets are malleable, dynamic, markets are malleable, dynamic, subjective, and subject to multiple change subjective, and subject to multiple change efforts efforts

(e.g. Rosa et al. 1999, (e.g. Rosa et al. 1999, KjellbergKjellberg and and HelgessonHelgesson2006, 2006, DepeyreDepeyre and Dumez 2009, and Dumez 2009, StorbackaStorbackaand and NenonenNenonen 2011, 2011, KjellbergKjellberg et al. 2012)et al. 2012)



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Evolution of Evolution of marketing theoriesmarketing theories

from from

developing processdeveloping process--based models that based models that describe market changesdescribe market changesdescribe market changes describe market changes

(e.g. product life cycle, market maturity, market readiness (e.g. product life cycle, market maturity, market readiness imply a limit to exploit markets that are given and imply a limit to exploit markets that are given and already exist)already exist)

ToTo

better understanding the processes of better understanding the processes of market construction and operationsmarket construction and operations

Research goalResearch goal

FROMFROM

'market sensing' => market driven 'market sensing' => market driven strategiesstrategiesstrategies strategies

TO TO

‘market scripting’ => market driving ‘market scripting’ => market driving strategiesstrategies

A middle ground market hypothesis(Granovetter, 1985 and 1992; Geiger et al., 2012)

Two extremes of market theories:Two extremes of market theories:

the traditional economic approachesthe traditional economic approaches, , which arewhich are characterisedcharacterised as 'underas 'under--which are which are characterisedcharacterised as underas undersocialisedsocialised', as they view the market as a ', as they view the market as a solely solely price mechanism price mechanism ((materialisedmaterialised approach)approach)

the classic structural sociology the classic structural sociology approachapproach, , which is which is categorisedcategorised as 'overas 'over--socialisedsocialised''

A similar way of thinking is found A similar way of thinking is found in the approaches explaining in the approaches explaining

the technologythe technology--society relationsociety relation

HOW TECHNOLOGY SHAPES HOW TECHNOLOGY SHAPES EXPERIENCES EXPERIENCES

AND VICE VERSAAND VICE VERSA

PHILOSOPHICAL VIEWS PHILOSOPHICAL VIEWS on technologyon technology

Technological determinismTechnological determinism: : technology causes technology causes certain ways of doing or ways to come aboutcertain ways of doing or ways to come about

Social constructionist view: Social constructionist view: technology is technology is socially constructedsocially constructed –– outcome of socialoutcome of socialsocially constructed socially constructed –– outcome of social outcome of social processes / practicesprocesses / practices

Phenomenological approach: Phenomenological approach: Heidegger Heidegger (1977) “the (1977) “the EnframingEnframing””

Technology is revealing and challenging, as it is Technology is revealing and challenging, as it is an horizon of meanings that reveals the world in an horizon of meanings that reveals the world in various waysvarious ways

Middle ground market approaches Middle ground market approaches have a have a better ability in better ability in addressing addressing market emergence, formation and market emergence, formation and

change, because:change, because:



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the the highly highly materialisedmaterialised and and socialisationsocialisationapproaches approaches ttreat reat change as exogenous change as exogenous (caused by technical conditions or social (caused by technical conditions or social developments taking place independently of the developments taking place independently of the market under study); market under study);

the approaches low in both dimensions the approaches low in both dimensions do do not consider change at allnot consider change at all;;not consider change at allnot consider change at all; ;

the middle ground approaches the middle ground approaches (that (that recogniserecognisethe blurred impact of the blurred impact of socialisationsocialisation and and materialisationmaterialisation) treat ) treat change as endogenous change as endogenous and demonstrate how markets posses the and demonstrate how markets posses the capabilities, dynamics and the mechanisms to capabilities, dynamics and the mechanisms to continually create and retain forms. continually create and retain forms.

THUSTHUS

marketsmarkets are increasingly viewed are increasingly viewed

as selfas self--empowered ever changing empowered ever changing

'socio'socio technical arrangements'technical arrangements'sociosocio--technical arrangements technical arrangements

((KjellbergKjellberg & & HelgessonHelgesson, 2007; , 2007; CallonCallon 2007) 2007)

CORE QUESTION CORE QUESTION

WHAT IS THE MARKET WHAT IS THE MARKET CHARACTERISTICCHARACTERISTICCHARACTERISTIC CHARACTERISTIC

ENABLING THE MARKETS TO ENABLING THE MARKETS TO

FORM AND CHANGE ?FORM AND CHANGE ?

Market plasticityMarket plasticityNenonenNenonen et al. (2013)et al. (2013)

The ability to change, form/create and The ability to change, form/create and retain a shaperetain a shape

It includes change but also stability It includes change but also stability

Plasticity IS NOT elasticity Plasticity IS NOT elasticity

Factors that can create Factors that can create Market PlasticityMarket Plasticity

1.1. Exchange Object (value creation)Exchange Object (value creation)

2.2. Market Actors Market Actors ((number & rolesnumber & roles) )

33 Market structureMarket structure ((relations/networksrelations/networks3.3. Market structure Market structure ((relations/networks relations/networks amongst actors)amongst actors)

4.4. Market InstitutionsMarket Institutions regulating markets regulating markets ((legal, social, cultural, economical, legal, social, cultural, economical, politicalpolitical) )

5.5. Market practicesMarket practices

An examination of An examination of

the business models of the business models of

tourism cybertourism cyber--intermediaries for intermediaries for investigating the ways in which they investigating the ways in which they

perform to rism marketsperform to rism marketsperform tourism marketsperform tourism markets

The role, manipulation and Influence of The role, manipulation and Influence of the 5 features of market plasticity the 5 features of market plasticity



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Business models & Business models & market market perfomativityperfomativity

the business model is a the business model is a ‘market device’ ‘market device’ defining how actors relate to markets defining how actors relate to markets ((CallonCallon andand MuniesaMuniesa, 2005), 2005)((CallonCallon and and MuniesaMuniesa, 2005) , 2005)

business models perform the market business models perform the market

((MacKenzieMacKenzie and and MilloMillo, 2003; Pollock and , 2003; Pollock and Williams, 2009; Williams, 2009; StorbackaStorbacka and and NenonenNenonen, , 2011a)2011a)

Changing market practicesChanging market practices

NormalisedNormalised practicespractices

Representational practicesRepresentational practices

Flight search engine that Flight search engine that maximisesmaximises miles earnedmiles earned Comparing the cost to drive Comparing the cost to drive

with the cost to flywith the cost to fly

https://www.tripwatcher.comhttps://www.tripwatcher.com



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Ways of consuming Ways of consuming servicesservices

Market structureMarket structure

zero commission for hotelszero commission for hotelstravellerstravellers pay to access the database (3$)pay to access the database (3$)



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Market actors:roles, functions and numbers

www.hallst.comwww.hallst.com//

http://www.tripbod.com/http://www.tripbod.com/

https://www.airbnb.comhttps://www.airbnb.com

Changing market practicesChanging market practices

Exchange practicesExchange practicesExchange practicesExchange practices

(negotiation, payment, risks of purchasing)



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Use miles to pay for productsUse miles to pay for products Pay with your mobile phonePay with your mobile phone

Sell second hand tickets Sell second hand tickets

Price guarantee servicesPrice guarantee serviceswww.steadyfare.comwww.steadyfare.com




Purchase of price optionsPurchase of price options

You can delete the intermediaries You can delete the intermediaries but you can never delete the but you can never delete the

distribution services !distribution services !

•Cyber-intermediaries manage to survive when they give travellers the resources,

platforms and value propositions to co-create value = i.e. to perform markets

TO SUMMARISETO SUMMARISE

Impact of the Internet on tourism markets

eliminating players in a market eliminating players in a market (deconstruction approach) (deconstruction approach)

building a new or modified set of players in a building a new or modified set of players in a market market (construction approach)(construction approach)

changing the functions performed by players changing the functions performed by players (functional modification approach)(functional modification approach)

either directly or indirectly by changing the mindeither directly or indirectly by changing the mind--set of set of market players (e.g., customers, competitors, and market players (e.g., customers, competitors, and other stakeholders)other stakeholders)

How can we create markets:How can we create markets:2 concepts2 concepts

CONTEXTCONTEXT of of transactionstransactions

ΤΤhe he OBJECTOBJECT of of transactionstransactions

Which are the markets Which are the markets and how they are and how they are createdcreated,, i.e. where i.e. where and how people and how people transacttransact

What value is being What value is being exchanged, exchanged,

How value is being coHow value is being co--createdcreated

How tourism experiences are How tourism experiences are createdcreated




Does competitive advantage relate Does competitive advantage relate to the level of innovativeness or to the level of innovativeness or

the ability to the ability to normalisenormalise, , routiniseroutinise, , institutionaliseinstitutionalise and retain a and retain a

market? market?

How can we start How can we start ΤΤHINKING UP SIDE DOWNHINKING UP SIDE DOWN ??

Learning “Learning “with the market”with the market”

Building the abilities Building the abilities

to engage with and shape markets to engage with and shape markets

Learning outcomes for constructing markets

Learning abilities

Market structure Ability to actively engage in network and tie/bonds formation and structure development

Market practicesExchange practices:� Financial transactions.�exchange object� Price formation mechanisms.� Customer readiness (to participate in the market and use the product).Normalised practices:

Formating exchange practices: - Ability to reconfigurate resources within a network in order to actualise value proposition and economic exchanges

Formating normalised practices:Normalised practices:� Technological standards� Legislation.� Social and relational norms.Representational practices: � Commonly agreed terminology.� Market research & statistics� Coverage in media.� Market/industry associations.

Formating normalised practices: - Ability to use normalisation practices for stabilising the business models

Formating representational practices:- Ability to knowledge and to engage in dialogues for creating inter-subjective meanings or consensus

Market pictures (Interpretations of the market): How actors interpret the market network (where it starts and where it ends)

-ability to change existing mental models and institutionalise new (cognitive market learning) - ability to overcome the institutions, e.g. existing understandings and patterns of actions

Learning outcomes for constructing markets

Theories

Market structure Social capital theory Resource-based view Networking

Market practicesExchange practices:Normalised practices:Representational practices:

Practice theory

social normalisation

formalization, institutionalization, routinization, and materialization

Market pictures (Interpretations of the market): How actors interpret the market network (where it starts and where it ends)

EmbeddednessStructuration theory

THANK YOU THANK YOU !!

ΜΜariannaarianna SigalaSigalaUniversity of the AegeanUniversity of the Aegean

([email protected])([email protected])

Social Media and Service Innovation in Tourism - Research Opportunities from a Service Dominant...

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