1. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
Product dominant logic
The market is separate from the
value creation process
Social Media and
Service Innovation in Tourism:
Research Opportunities from a
Service Dominant Approach
The MARKET
The firm
creates value
Marianna Sigala
University of the Aegean
The consumer
destroys value:
Is a target for
the firm
Intermediaries facilitate the
transfer of value
 Product, possession, place,
Product, possession, place,
credibility & time utilities
Service dominant logic
The market is integral of the
value creation process
Assumptions about the market
The market exists, is given and stable
 The market is a target to exploit
 The market is a constrain to a firm and it
has to be managed
 Market understanding, sensing and
forecasting are the key issues
 Information alertness and awareness are
must
 RE-ACTIVE
RE-
VALUE-INEXCHANGE

The firm:
The consumer:
The
Collaborator in
Collaborator in
co-creating value Market: co-creating value
and competitor in
and competitor in
extracting
extracting
economic value
economic value
The Market: is a service ecosystem responsible for the cocreation of experiences of value-in-context of an individual
at a specific moment and place
PDL
SDL
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
Role of customers
M.Sigala@aegean.gr
The market is a forum/space for
coco-creating tourism experiences
Value is not distributed but co-created
coMarkets and Demand are contextual (space
+ time)
 Markets do not pre-exist
pre Markets are dynamic and ever changing
 The aim is to collaborate with customers to
coco-create markets
 PROACTIVE
1

2. Marianna Sigala, University of the Aegean,
Greece
Thus, to co-create value,
cofirms must be able to:
ENTER PhD workshop 2014
CoCo-creation within the context
of
cybercyber-intermediaries
Access, adapt and integrate resources from
network partners and make their resources
accessible, adaptable and integratable
SOCIAL WEB
ADVERTISING
Campaigns
Tripadvisor
•Selling
licenses
•Selling Ads
•Selling
reputation
monitoring
services
FACEBOOK
-social graph for
personalised
advertising and
information
provision
CUSTOMER RESOURCES
•UGC: wikis, customer
reviews, videos
•Social Capital: (networks
and relations amongst people)
d l ti
t
l )
•Trust creation: reputation
systems
•eWOW
•Collective Sense making
(folksonomy)
•Collective ranking of
importance
•Collective sentiment analysis
FOURSQUARE
Redefine how we
live in a city by
inviting friends
and experiencing
places also with
those not being
there
TOURISM
FIRM
•Promotion
•Service
improvement
•Competitor
benchmarking
– innovation
MARKET INNOVATION is A
CONTINUOUS WORK-IN-PROGRESS
WORK-INA value creation ecosystem that can
scale up or d
l
down rapidly and
idl
d
reconfigure its resources in real time to
accommodate shifting consumer
desires, to discover, influence and
create latent needs, and allow the coneeds,
cocreation of personalised experiences
Social seating application
KLM with Meet and Seat
Select who seats next to you based on Facebook ,
Linkedin profile etc
M.Sigala@aegean.gr
2

3. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014


Tourism Intermediaries should
continuously upgrade their
service ecosystem by ‘plug &
y
y p g
playing’ new actors that can
exchange and integrate
resources for co-creating value !
What is the role of distributors
in a market ?




To enable and educate customers how to cococreate value
Provide customers with access to resources at
the i ht l
th right place, time, situation / context and
ti
it ti
t t d
space for integrating them and creating value
Create an open environment for enabling the
actors to meet and exchange resources for cococreating value
Enhance and support the creativity of customers




DEDE-think of service distribution
RERE-think of service participatory design and
value co-creation
coDEDE-Think of distribution chains (sequential)
Re-Think of distribution networks and open
p
ecosystems (value flows in any direction)
DeDe-Think of C2B, B2C, B2B, B2C ….. Models
Re-Think of Actor-2-Actor interactions and
Actorresource exchange interfaces (everyone is an
actor)
IntegratedIntegrated-connected capability
a critical asset for building a
competitive business model
The HRS friends app, which is in beta, shows users a
map of where their Facebook friends live or where
they have recently checked-in using the social
checkednetwork
 The app also enables users to view available hotels in
p p
group
the area where friends or people within their g p
live or search for properties with those ‘liked’ by
‘liked’
friends highlighted in the results.
 Facebook check-ins and data from Foursquare are
checkalso used to create a heatmap of areas of interest in a
city enabling travellers to draw on friends’
experiences before finalising plans.
M.Sigala@aegean.gr
3

4. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
If firms have to create markets,
then… how they can do it?
'the term market is
everywhere and nowhere"
(Venkatesh et al., 2006: p. 252)
WHAT IS A MARKET
AND
HOW MARKETS ARE FORMED
AND EVOLVED ?
Market theories should
recognise that:
markets do not simply exist, but rather
they are formed and are continuously
evolving
g
 markets are malleable, dynamic,
subjective, and subject to multiple change
efforts

(e.g. Rosa et al. 1999, Kjellberg and Helgesson
2006, Depeyre and Dumez 2009, Storbacka
and Nenonen 2011, Kjellberg et al. 2012)
M.Sigala@aegean.gr
4

5. Marianna Sigala, University of the Aegean,
Greece
Evolution of
marketing theories
from
 developing process-based models that
processdescribe market changes
(e.g. product life cycle, market maturity, market readiness
imply a limit to exploit markets that are given and
already exist)
To
 better understanding the processes of
market construction and operations
ENTER PhD workshop 2014
Research goal
FROM
 'market sensing' => market driven
strategies
TO
 ‘market scripting’ => market driving
strategies
A middle ground market hypothesis
(Granovetter, 1985 and 1992; Geiger et al., 2012)
Two extremes of market theories:
 the traditional economic approaches,
approaches,
which are characterised as 'under'underunder
socialised',
socialised', as they view the market as a
solely price mechanism (materialised approach)
 the classic structural sociology
approach,
approach, which is categorised as 'over'oversocialised'
socialised'
A similar way of thinking is found
in the approaches explaining
the technology-society relation
technologyHOW TECHNOLOGY SHAPES
EXPERIENCES
AND VICE VERSA
PHILOSOPHICAL VIEWS
on technology




Technological determinism: technology causes
determinism:
certain ways of doing or ways to come about
Social constructionist view: technology is
socially constructed – outcome of social
processes / practices
Phenomenological approach: Heidegger
(1977) “the Enframing”
Enframing”
Technology is revealing and challenging, as it is
an horizon of meanings that reveals the world in
various ways
M.Sigala@aegean.gr
Middle ground market approaches
have a better ability in addressing
market emergence, formation and
change, because:
5

6. Marianna Sigala, University of the Aegean,
Greece



the highly materialised and socialisation
approaches treat change as exogenous
(caused by technical conditions or social
developments taking place independently of the
market under study);
the approaches low in both dimensions do
not consider change at all;
all;
the middle ground approaches (that recognise
the blurred impact of socialisation and
materialisation)
materialisation) treat change as endogenous
and demonstrate how markets posses the
capabilities, dynamics and the mechanisms to
continually create and retain forms.
ENTER PhD workshop 2014
THUS
markets are increasingly viewed
as self-empowered ever changing
self'socio-technical arrangements
sociosocio
arrangements'
(Kjellberg & Helgesson, 2007; Callon 2007)
Helgesson,
Market plasticity
CORE QUESTION
Nenonen et al. (2013)
WHAT IS THE MARKET
CHARACTERISTIC
ENABLING THE MARKETS TO
FORM AND CHANGE ?
The ability to change, form/create and
retain a shape
 It includes change but also stability


Plasticity IS NOT elasticity
Factors that can create
Market Plasticity
1.
2.
3.
3
4.
5.
Exchange Object (value creation)
Market Actors (number & roles)
roles)
Market structure (relations/networks
amongst actors)
Market Institutions regulating markets
(legal, social, cultural, economical,
political)
political)
Market practices
M.Sigala@aegean.gr
An examination of
the business models of
tourism cyber-intermediaries for
cyberinvestigating the ways in which they
perform tourism markets
to rism

The role, manipulation and Influence of
the 5 features of market plasticity
6

7. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
Business models &
market perfomativity

the business model is a ‘market device’
defining how actors relate to markets
(Callon and Muniesa, 2005)
Muniesa,
business models perform the market
(MacKenzie and Millo, 2003; Pollock and
Millo,
Williams, 2009; Storbacka and Nenonen,
Nenonen,
2011a)

Flight search engine that
maximises miles earned
Changing market practices
Normalised practices
Representational practices
Comparing the cost to drive
with the cost to fly
https://www.tripwatcher.com
M.Sigala@aegean.gr
7

8. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
Ways of consuming
services
zero commission for hotels
travellers pay to access the database (3$)
Market structure
M.Sigala@aegean.gr
8

9. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
www.hallst.com/
www.hallst.com/
Market actors:
roles, functions and numbers
http://www.tripbod.com/
https://www.airbnb.com
Changing market practices
Exchange practices
(negotiation, payment, risks of
purchasing)
M.Sigala@aegean.gr
9

10. Marianna Sigala, University of the Aegean,
Greece
Use miles to pay for products
ENTER PhD workshop 2014
Pay with your mobile phone
Sell second hand tickets
Price guarantee services
www.steadyfare.com
M.Sigala@aegean.gr
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11. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
Purchase of price options
You can delete the intermediaries
but you can never delete the
distribution services !
TO SUMMARISE
•Cyber-intermediaries manage to survive
when they give travellers the resources,
platforms and value propositions to
co-create value = i.e. to perform markets
Impact of the Internet
on tourism markets



eliminating players in a market
(deconstruction approach)
building a new or modified set of players in a
market (construction approach)
changing the functions performed by players
(functional modification approach)
either directly or indirectly by changing the mind-set of
mindmarket players (e.g., customers, competitors, and
other stakeholders)
How can we create markets:
2 concepts

CONTEXT of
transactions
Τhe OBJECT of
transactions

Which are the markets  What value is being
and how they are
exchanged,
created,
created, i.e. where
How value is being cococreated
and how people
How tourism experiences are
transact
created
M.Sigala@aegean.gr
11

12. Marianna Sigala, University of the Aegean,
Greece
ENTER PhD workshop 2014
How can we start
ΤHINKING UP SIDE DOWN ?
Does competitive advantage relate
to the level of innovativeness or
the ability to normalise, routinise,
normalise, routinise,
institutionalise and retain a
market?
Learning outcomes for
constructing markets
Learning abilities
Market structure
Building the abilities
to engage with and shape markets
Learning outcomes for
constructing markets
Social capital theory
Resource-based view
Networking
Market practices
Exchange practices:
Normalised practices:
Representational practices:
Practice theory
-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
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
THANK YOU !
social normalisation
formalization, institutionalization,
routinization, and materialization
M.Sigala@aegean.gr
Formating exchange practices:
- Ability to reconfigurate resources within a
network in order to actualise value proposition
and economic exchanges
Theories
Market structure
Market pictures (Interpretations
of the market): How actors
interpret the market network
(where it starts and where it
ends)
Market practices
Exchange practices:
Financial transactions.
exchange object
Price formation mechanisms.
Customer readiness (to participate
in the market and use the product).
Normalised practices:
Technological standards
Legislation.
Social and relational norms.
Representational practices:
Commonly agreed terminology.
Market research & statistics
Coverage in media.
Market/industry associations.
Market pictures (Interpretations of
the market): How actors interpret
the market network (where it starts
and where it ends)
Learning “with the market”
“with
Ability to actively engage in network and
tie/bonds formation and structure development
Μarianna Sigala
University of the Aegean
(m.sigala@aegean.gr)
Embeddedness
Structuration theory
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