Reciprocal value propositions in practice: Constraints in digital markets

Industrial Marketing Management 41 (2012) 197–206

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Industrial Marketing Management

Reciprocal value propositions in practice: Constraints in digital markets☆ Yann Truong a, Geoff Simmons b, 1, Mark Palmer c,⁎ a b c

Groupe Ecole Supérieure de Commerce de Rennes, 2 rue Robert d'Arbrissel, 35065 Rennes Cedex, France Ulster Business School, University of Ulster, Shore Road, Newtownabbey, Northern Ireland, BT37 0QB, United Kingdom Birmingham Business School, University of Birmingham, University House, B15 2TT, United Kingdom

a r t i c l e

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Article history: Received 3 November 2010 Received in revised form 26 May 2011 Accepted 26 July 2011 Available online 30 December 2011 Keywords: Service-dominant logic Value Reciprocal value Value co-creation Industrial marketing

a b s t r a c t The value proposition concept, while forming a central foundational premise of service-dominant (S-D) logic, has nevertheless been treated somewhat ambiguously. Recent work in attempting to address this has focused through a S-D logic lens on the reciprocal nature of value propositions. Important to this work has been a focus on communicative interactions and resource integration between network suppliers and customers. Overall, value proposition thinking has not studied in detail their adoption and use in practice. Considering the compelling notion of reciprocity, there have been recent calls for research to consider reciprocal value propositions in practice. The overall aim of this paper, therefore, was to explore how reciprocal value propositions are developed (or not) in practice at the network level. The study was set in the mobile television (TV) sector, which, as an internet-driven sector, is viewed as particularly pertinent. To conduct the study an S-D logic and Industrial Marketing and Purchasing (IMP) Group framework are integrated for the first time. A key finding is that while the reciprocal value proposition concept is theoretically intuitive, it is by no means inevitable in practice. Reciprocal value propositions were found to be simultaneously constrained, and, potentially enabled by these constraints in practice. At an overall level this paper contributes to the ongoing collaborative process, which aims to move S-D logic from a framework to a theory. More specifically, we provide new insights into the development of reciprocal value propositions in practice. © 2011 Elsevier Inc. All rights reserved.

1. Introduction How value is created, maintained and promoted lies at the heart of marketing theory and practice. It is central to recent debate that challenges the goods dominant (G-D) logic of marketing, with Vargo and Lusch (2004) calling on marketing theorists to consider a servicedominant (S-D) logic for marketing. Vargo (2011), more recently, stated that S-D logic is essentially a value co-creation model that views all actors as resource integrators, bound together in shared systems of exchange—service ecosystems or markets. He goes on to discuss how such markets are characterized by mutual value propositions. However the value proposition concept, while forming a central foundational premise of S-D logic, has nevertheless been treated somewhat ambiguously in original and subsequently refined ☆ Research Project: This research is part of an ongoing project involving a Media and Networks Cluster and associated with technologies in the image value network (HD TV, mobile TV, interactive communication, optical technologies, virtual reality, platform and network broadcasting, telecoms and security systems), spanning creation to actual use. Its members include multinational firms, technologically innovative SMEs, content providers, university research labs and graduate schools located in France. ⁎ Corresponding author. E-mail addresses: [email protected] (Y. Truong), [email protected] (G. Simmons), [email protected] (M. Palmer). 1 Tel.: + 44 2890368612; fax: + 44 2890368993. 0019-8501/$ – see front matter © 2011 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2011.11.007

formulations (see Vargo & Lusch, 2004; Lusch, 2007; Vargo & Lusch, 2008a). Foundational premise (FP) 7 of S-D logic states that the enterprise can only make value propositions (Vargo & Lusch, 2004: pg. 11). In attempting to reformulate this, Vargo and Lusch (2008a) assert that the firms cannot deliver value, but only offer value propositions. They also suggest eliminating the supplier–consumer distinction (Vargo & Lusch, 2008b). While noting attempts at reformulation, Ballantyne, Frow, Varey, and Payne (2011) point out that the basis of S-D logic thinking remains orientated around the original FP7. They propose a reformulation of FP7 which is based on the notion of reciprocity. Reciprocal value propositions are positioned as communication practice with the potential to integrate exchange activities, relationship development and knowledge renewal. With the rise of Web 2.0 and associated interactive technologies, empowered consumers have amplified the need for value proposition thinking to move from a supplier-dominant to an initiator–participant perspective. Suppliers and consumers take on interchangeable initiating and participating roles in value proposition development. Critical to this is are communicative interactions between network firms and consumers, which take on a dialogical nature. That is to say, the parties involved must intend to interact and learn together, with empowered consumer requirements emerging through mutually creative, co-constructed dialogue (Jaworski & Kohli, 2006).

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On the whole, Frow and Payne (2011) state that the S-D logic literature does not study in detail the adoption and use of value propositions in practice. They call for further research to explore the value proposition concept and the processes involved in its development. Similarly, and building from their proposed reformulation, Ballantyne et al. (2011) call for further research to consider how reciprocal value propositions are developed in practice. Practice can be conceptualized as a social activity, constructed through the actions, interactions and negotiations of multiple partners (Jarzabkowski, Balogun, & Seidl, 2007). In this respect we posit that the potential for reciprocal value propositions will not, therefore, necessarily be unconstrained in practice. They will depend upon not only network relationship dynamics, which may be entrenched, but also on the motives surrounding network parties, which may be aligned with self-interests and other desired market outcomes. The overall aim of this paper, therefore, was to explore how reciprocal value propositions are developed (or not) in practice at the network level. By considering this aim at a network level we acknowledge calls for an extension of thinking beyond customer– supplier relationships, to a network of stakeholder relationships (Flint & Mentzer, 2006; Frow & Payne, 2011; Lusch, Vargo, & O'Brien, 2007). The study focuses on two theoretically-derived research questions developed from the research aim and Ballantyne et al.'s (2011) conclusions: (i) how do communicative interactions in network relationships influence (or not) reciprocal value propositions?; (ii) how do reciprocal value propositions influence (or not) network interactions to create conditions for learning together?. The study was set in the mobile television (TV) sector. Such internetdriven sectors are viewed as pertinent for the study of reciprocal value propositions (Ballantyne et al., 2011). Addressing the research aim and questions, the findings of this paper contribute to the ongoing collaborative process which aims to move S-D logic from a framework to a theory. Vargo (2011) comments that S-D logic as it stands represents a ‘pre-theoretic’ lens or framework for developing theory. At one level we contribute to a noted lack of understanding regarding how suppliers in practice seek to manage the co-creation of value (Payne, Storbacka, & Frow, 2008). More specifically, we answer Frow and Payne (2011) and Ballantyne et al.'s (2011) recent calls for research to explore further reciprocal value proposition development in practice. In this respect we provide new insights at three levels. First, the study findings reveal that the reciprocal value proposition concept while theoretically intuitive, is by no means inevitable in practice. We found that the dominance of one supplier in the mobile TV network presented significant constraints for other suppliers in the development of reciprocal value propositions. Also, empowered consumers in an internet-driven market were found to be significant to this. Their evident desire for mobile TV content that was not exclusive and controlled by dominant suppliers, as well as attempts by dominant suppliers to defend exclusive and controlled content for their own ends, was an important aspect of both constraints to, as well as the potential of, reciprocal value propositions in practice. Second, when these constraints and the potential were considered further the findings revealed a collision between, on the one hand, supplier dominance, and the traces of a nascent network system grounded in the realities and challenges of the mobile TV marketplace. It was in the collision, between dominance by one supplier and a desire by other suppliers for interactive and dialogically-based communications, that reciprocal value propositions were found to be simultaneously constrained, and, potentially enabled by these constraints in practice. Theoretically, Lindgreen and Wynstra's (2005) network system was found to be conducive to understanding how dominant suppliers can move constraints towards being enablers in approaching knowledge renewal, incorporating dialogue and a knowledge brokerage role. We show how the mindset changes required, create the conditions for knowledge renewal and the embeddedness of

social relations over time, with reciprocal value propositions facilitating as a platform for communicative interaction. Third, we integrate for the first time an S-D logic framework with an Industrial Marketing and Purchasing (IMP) Group framework to empirically study reciprocal value propositions in practice. This contributes to observed, and considerable, commonalities between the evolving view of service as the dominant logic of business, and the more established empirical observations of IMP (Vargo & Lusch, 2008b; Ford, 2011; Storbacka & Nenonen, 2011). Data collection was informed by a theoretical frame of reference developed by Munksgaard (2010) which builds on IMP work. This framework allowed us to consider how mobile TV executives perceived and understood network relationships at the level of activities and resource integration. Ballantyne et al.'s (2011) platform which they developed as an analysis tool, provided a schema for analyzing the data collected, focusing it on activities and resource integration relating to reciprocal value proposition development in practice. The first part of the paper presents a literature review relevant to the research aim. Building on this, the second part of the paper outlines the qualitative research design chosen to address the research aim. Developed from the research findings we present a discussion section, explicating theoretical, normative and research contributions before conclusions are drawn. 2. Literature perspectives In this section literature is reviewed relating to the research aim and questions. To begin with value co-creation is considered through the S-D logic lens. This provides a basis for introducing the value proposition concept and recent work focusing on reciprocity. IMP literature is reviewed, noting complementarities with S-D logic thinking and the reciprocal value proposition concept. 2.1. Co-creation of value Marketing scholars are well versed in the functional school of the early 1950s, where marketing developed into a management activity with a focus, above all, on satisfying the customer at a profit (Drucker, 1954; Levitt, 1960). Marketing management, drawing from classical and neoclassical economics, focused on a view that value was embedded in products. Vargo and Lusch (2004) considered this view as belonging to a goods dominant (G-D) logic in marketing. A key aspect of the G-D logic is that suppliers market to customers. Firms attempt to embed value in products as the primary focus of market exchange, defining markets using segmentation and market research tools in an attempt to manage product development, pricing, promotion and distribution activities. The G-D logic, as a foundation for understanding value creation and exchange, is considered to have significant limitations, focused as it is on the distribution of commodities (Vargo & Lusch, 2008b). Various reformist agendas have arisen in an attempt to move marketing thought in new directions, which are more aligned with the realities of marketplaces in an internet age. Vargo and Lusch (2004) draw the threads of these agendas together to create a new foundation for a service dominant (S-D) logic in marketing. Stephen Vargo recently commented: “In all of our efforts, our purpose has been to identify, find, converge, and point toward a logical extension of conceptual and perceptual shifts taking place in apparently diverse research streams, especially, though not exclusively, in marketing” (Vargo, 2011: 217). They emphasize a different foundational understanding of the role of exchange in human systems, where goods take on value for customers as service appliances. Service value is determined at the time of its use, or as value-in-use. S-D logic focuses on the value-creating processes that involve the customer as a co-creator of value. Customers, therefore, become active players who are able to

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co-develop and personalize their relationships with suppliers, adopting various roles in doing so (Payne et al., 2008). Key to this are interactive relationships between suppliers and customers, rather than traditional marketing management thinking focused on marketing to customers. Suppliers and customers participate in the co-creation of value, with marketing exchange transformed into an open-ended, interactive and relational process. Payne et al. (2008) describe how customers learn based on experience picked up from the relationship with a supplier; determining future engagements in value-creation activities with these suppliers. As suppliers learn more about customers, more opportunities are presented to further improve the design of the relationship experience and enhance value co-creation with customers. Ultimately, the customer is the arbiter of value derived from either interaction with the supplier as a primary form of service experience, or products as appliances which generate a secondary form of service experience. Ballantyne and Varey (2006) outline a need to elaborate S-D logic thinking in this regard. Interaction, as a generator of service experience, and value-in-use are taken to be a given under S-D logic. However, they contend that pivotal aspects of value creation are not given adequate prominence in Vargo and Lusch's (2004) thesis. More emphasis is needed on interaction as the enactment of exchange, with services exchanged for services, and marketing's role as the relationship facilitator and co-creator of the service experience. Seeking to better understand the potential of creating value-in-use through marketing interaction, Ballantyne and Varey (2006) identify three valuecreating activities which augment S-D logic as enablers of the service experience. The first are relationships to give what is termed structural support for creating and applying knowledge resources (relating). The second is communicative interaction to develop these relationships (communicating). The third is the knowledge required to enhance customer service experiences, co-created through dialogical communications and learning together (knowing). This work is pertinent given that relatively little is known about how customers engage in value co-creation (Payne et al., 2008). Also, consumers through Web 2.0 technologies, and particularly the empowerment they facilitate, are taking a more proactive role in the co-creation of value (see for e.g. Ramaswamy, 2008, 2009; Truong & Simmons, 2010). Also pertinent, as a key enabler of the value co-creation process, is the value proposition (Ballantyne & Varey, 2006; Frow & Payne, 2011; Vargo, 2011). 2.2. Reciprocal value propositions The value proposition concept has been defined from various perspectives. Lanning and Michaels (1988) work has been influential in defining value proposition as a statement of benefits offered to customers, and the price these customers are willing to pay for the benefits. They positioned the value proposition in a value delivery system with three linked steps: choose the value; provide the value; and, communicate the value. This definition has had considerable influence orienting thinking to customer value propositions. While a G-D logic leaning is implicit, Lanning (1998) moved towards a more interactive and relationship oriented perspective by defining value propositions as the experiences customers obtain through interacting with a firm as against competitors. From a different perspective, Flint and Mentzer (2006) define value propositions as more often than not co-produced, rather than pre-packed in advance by suppliers. This definition represents a major shift in the propositional logic of earlier work, moving away from a G-D logic and its focus on value-in-exchange. Value propositions are developed by network partners through knowledge sharing, manifested as value-in-use by customers under the terms of S-D logic. Vargo and Lusch (2004) view value propositions as a fundamental premise of S-D logic. Value is co-created in-use with both supplier and customer playing a role, and with the value proposition

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creating the expectations of value-in-use (Frow & Payne, 2011). In Vargo and Lusch's (2004) seminal paper, FP7 states (pg. 11), “the enterprise can only make value propositions”. Based around the notion of reciprocity, Ballantyne et al. (2011) contend that FP7 (notwithstanding subsequent attempts at refinement: e.g. Lusch et al., 2007; Vargo & Lusch, 2008a) limits its influence when considering value propositions. Reciprocal value propositions are based on the notion of complementary objectives between participants in a value creating process (see Glaser, 2006). In any marketing exchange there will be at least two evaluators with their value perspectives linked together as reciprocal promises of value, “operating to and from suppliers and customers seeking an equitable exchange” (Ballantyne & Varey, 2006: pg. 344). Reciprocity is a facilitator of such role flexibility in who chooses to initiate or complete an offer, or work together with a counterpart in developing a value proposition. Building from this, Ballantyne et al. (2011) propose the following reformulation to FP7 (pg: 205): “an enterprise can initiate or participate in developing value propositions as reciprocal promises of value but beneficiaries will always determine what is of value in their own terms”. This reformulation provides a basis for moving S-D logic from a supplier-centric initiation of value propositions to be assessed by the customer in use, to an emphasis on reciprocity where suppliers and customers can interchangeably initiate or participate in value propositions. In one instance customers initiate an enquiry with providers participating a response. In another instance customers initiate, with suppliers enquiring as to their ability to deliver. The internet amplifies this by challenging the traditional providerdominant view of initiators and participants with a view of openended, discovery oriented and inherently relational perspectives (e.g. Prahalad, 2004; Stockdale & Standing, 2004; Truong & Simmons, 2010). Synthesizing their reformulation of FP7, Ballantyne et al. (2011) developed a platform for communicative interaction comprising three connected stages: (1) value propositions: assessing specific interactive communication episodes in the development of reciprocal value propositions between key actors; (2) resource integration: assessing specific integrative network linkages between actors; and (3) value-in use: assessing the value of goods and other resources integrated by a counterpart into their own value creating processes. Drawing from Varey (1996, 2000, 2003) and Jaworski and Kohli (2006), Ballantyne et al. (2011) discuss how suppliers and customers require interactions focused on dialogical communications over time. Opportunities for dialogical communication occur where the parties in market exchanges are open to interacting and learning together, and where customer requirements emerge from co-created and coconstructed dialogue (Jaworski & Kohli, 2006). Communications and learning between the parties extends over time, from pre-sale to post-sale within the supplier–customer relationship (Varey, 2008). Ballantyne and Varey (2006) identified this as a learning perceptive based on interaction, where dialogue operates as an interactive process of learning together based on trust and the ability to listen as well as contribute. 2.3. Industrial Marketing and Purchasing Group research Various researchers identify the relevance of IMP (Industrial Marketing and Purchasing) Group research when considering S-D logic thinking (Ballantyne et al., 2011; Ford, 2011; Storbacka & Nenonen, 2011; Vargo & Lusch, 2008b). With IMP work interaction between organizations and, by extension, within networks of relationships, is the core process of doing business. Aligned with the reciprocal value proposition concept, suppliers and customers that take on interchangeable initiating and participating roles in market exchanges form an important premise of IMP thinking. Ford (2011) indicates that value creation, from an IMP view, is at least a two-way or often a multi-way affair which is inherently interactive between

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suppliers and customers. Interactions are characterized by interdependent actors influencing and adapting to the resources and also the activities of each other (Ford, Hakansson, & Johanson, 1986; Ford, Gadde, Hakansson, & Snehota, 2003). Ford and Hakansson (2005) state that dyadic relationships involve interactions, which leverage resources and activities for physical exchange to build relationshipspecific interdependencies. Perceptions of each business relationship are unique and influenced by episodes involving differing activity and resource combinations that have happened in the past, and potentially may optimally happen in the future (Ford & Rosson, 1982; Dubois, Gadde, & Mattson, 2003; Mouzas & Ford, 2009). These dyadic relationships are part of a wider network pattern of interactions and interdependencies, relying on third parties for activities and resources (Ford, 2011). Building from the Interaction Model of Hakansson (1982), and the traditional IMP view of interdependencies between organizations and between network relationships (e.g. Anderson, Hakansson, & Johanson, 1994; Hakansson & Snehota, 1995), Munksgaard (2010) developed a theoretical framework operating at an organizational, relational and network level. It identifies three indicators related to perceived interdependencies through relationships built in interactions: (1) convergence– divergence in organizational characteristics; (2) relationship atmosphere; and (3) degree of overlap in actors' network pictures. Data collection in this paper utilized Munksgaard's (2010) framework to focus on how mobile TV executives perceived and understood network relationships at the level of activities and resource integration. Respondents were initially informed that the research focus was on reciprocal value propositions in practice, being provided with a detailed overview of the concept at the outset. Ballantyne et al.'s (2011) platform, which was developed as an analysis tool and also related to activities and resource integration in network relationships, provided a schema for analyzing the data collected. This allowed the researchers to analyze mobile TV executives' perceptions and understanding of network relationships, focusing on specific activities and resource integration pertaining to reciprocal value propositions in practice. Before moving to the research design adopted and its justification, the next section introduces the mobile television (TV) setting of the study. 3. Mobile TV network With the rise of the internet and related digital technologies, consumers are increasingly empowered. The mobile TV sector is a relevant example of this. Revenues generated from voice-calling and messaging services are now maturing with little opportunity for growth. In this context there has been significant investment in mobile 3G broadband to develop content such as mobile TV (JumiskoPyykko, 2008). Mobile TV can be generally defined as, “any video played on a mobile device” (Bria et al. 2007, p. 1). However, “realtime broadcast transmission of content to mobile devices” (Jarvenpaa & Loebbecke, 2009, p. 202) is a more accurate and suitable description

that illustrates the complexity of broadcasting content beyond the basic streaming of video. The impressive worldwide demand for mobile services has been largely driven by telecommunications companies, which are commonly referred to as telcos (e.g. Orange; Vodafone). The success of mobile phones has turned a number of telcos into some of the world's largest companies both in terms of revenue and capitalization. However, current business models implemented by telcos are presently just breaking even, considering the massive investments required by the 3G infrastructure (Idate Mobile, 2009). These business models are focused on creating exclusive mobile TV content (e.g. big brand names such as MTV and Disney), which is made available to consumers on-portal. A portal is a convenient source of packaged content and services for the consumer. The on-portal environment is controlled and branded by telcos, billing for the services provided and organizing premium content revenue settlement with content partners. However, consumer demands for personalized and interactive mobile TV services (Shim, Park, & Shim, 2008; Jarvenpaa & Loebbecke, 2009), are increasingly focused on off-portal consumer access to mobile TV content. Off-portal publishing offers an alternative way for consumers to access content through connecting directly to the mobile internet. Anderson and Williams (2004) report that “unbundling” has opened up the mobile TV network. Consumers can circumvent their mobile operator's portal, providing extra revenues not through onportal access, but through browsing the breadth and depth of the internet for mobile TV content from YouTube, for example, to a host of other sources. A model of the mobile TV network has been developed from information provided by respondents as part of the research conducted for this paper. The model is useful for the reader in locating interactions and relationships (Fig. 1). The majority of mobile TV content is adapted for mobile TV, being designed initially for other platforms. Content providers can be an organization, or any individual person who creates content and sells it to the content aggregator. For example television networks, such as Channel 4 in the United Kingdom, are attempting to extend their activities by broadcasting their channels to mobile phones. Content enablers provide foundation technologies, processes, regulations and related support to value activities developed by the various network providers. Content aggregators such as Netflix provide single-point connectivity between content and the on and off-portal platforms. The content publisher provides the platform to process and store content provided by content aggregators. They are required to enable the connectivity between the platform and the network, and are represented by the telco mobile operators and internet service providers. Broadcasting content to mobile devices can be facilitated within different technology-based industry standards: MediaFLO in the US; DMB (T-DMB and S-DMB) in Korea and Japan; and DVB-H in most of Europe. Also, it can be facilitated via a 3G network. Consumers are also extensively exposed to advertisements both on and off-portal, facilitated by advertising brands, agencies and technology-facilitating ad networks. In some cases, they may pay a

Fig. 1. Mobile TV network.

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lower subscription fee for on-portal services provided by telcos for example, with limited exposure to advertisements. Even though advertising on mobile phones only represents a fragment of the global $550 billion advertising market, it is expected to increase eight-fold by 2012, reaching an estimated $10 billion (Idate Mobile, 2009). In the next section the research design adopted to address the research aim and questions is presented. 4. Methodology The research aim of this paper was to explore how reciprocal value propositions are developed (or not) in practice at the network level. This study focuses on two research questions: (i) how do communicative interactions in network relationships influence (or not) reciprocal value propositions?; and (ii) how do reciprocal value propositions influence (or not) network interactions to create conditions for learning together?. Given the nature of the research aim and questions, the focus was on an area of enquiry where phenomena are not well understood and the interrelationships between them are not well known. This makes a qualitative research approach appropriate (Parkhe, 1993; Riege & Perry, 2000; Carson & Gilmore, 2000; Hill & Wright, 2001). We adopted a rigorous and replicable approach to sampling, data collection and data analysis outlined below.

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Table 1 Interview respondents. Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent Respondent

A B C D E F G H I J K L M N O P Q R S T U V W X Y

Role

Company role

Marketing director Marketing director Campaign manager Audience measurement manager Business development manager Business development director Business development manager Business development director Product manager Product manager Senior engineer Business development director Online content manager Purchasing director Business development director Business development director Marketing director Marketing director Business manager Business development manager product manager Research director Business development director Marketing manager Marketing director

Advertiser Advertiser Advertising agency Advertising agency On-portal publisher On-portal publisher Off-portal publisher Off-portal publisher Content enabler Content enabler Content enabler Content enabler Content aggregator Content aggregator Content aggregator Content aggregator Content provider Content provider Content provider Content provider Telco Telco Telco Telco Telco

4.1. Sampling approach The research sample consisted of executives from 25 organizations located in the mobile TV sector. Organizations were selected using a respondent-driven snowball sampling technique (Goodman, 1961; Salganik & Heckathorn, 2004), developing a research sample from a pool of international firms based in France. The main selection criteria required respondents to hold an executive position, and to work for an organization that was directly involved in the mobile TV network. Also, organizations selected ensured that relationships could be studied across the mobile TV network. Snowball sampling was particularly suited to the mobile TV setting of this study. We initially used recommendations from executives representing major mobile TV organizations that are members of an ongoing research project. Their recommendations aided in identifying further respondents who could provide data relevant to addressing the research aim and questions (Robson & Foster, 1989; Patton, 2002). Using this approach we were able to develop a sample that was representative of the mobile TV network. Table 1 identifies respondents, locating their organization in the mobile TV network. 4.2. Data collection approach The nature of the research aim and pursuit of a qualitative research approach, led to the selection of in-depth interviews as an appropriate data collection tool. In-depth interviews are appropriate when collecting empirical data on emerging themes, and in areas where research has no extensive basis (Easterby-Smith, Thorpe, & Lowe, 2003; Marshall & Rossman, 2006). Qualitative interviewing protocols are less structured than the survey instruments used in quantitative research (Bryman & Bell, 2003). Researchers are concerned with attempting to understand phenomena from the interview respondent's point of view. Patton (2002) states that the purpose of qualitative in-depth interviewing is to allow the researcher to enter the other person's perspective. Carson, Gilmore, Perry, and Gronhaug (2001) indicate that it allows researchers to explore feelings, memories and interpretations that cannot be observed or discovered in other ways. Two main approaches are normally employed by researchers; unstructured and semi-structured (Easterby-Smith et al., 2003). In this

study a semi-structured approach was adopted. An unstructured indepth interview approach was judged to be less suited to providing a focus for extrapolating responses related to the research questions. However, there is flexibility within a semi-structured in-depth interview approach. Bryman and Bell (2003), state that interviewees and interviewers are left with leeway in how they may reply and follow up in a semi-structured interview—questions may not follow on exactly in the way outlined in an interview schedule. Easterby-Smith et al. (2003), point out that the emphasis must be on how the interviewee frames and understands issues and events—that is, what is important for the interviewee in explaining and understanding phenomena and behaviors. The interview approach adopted in this paper followed guidelines based on the recursive model of interviewing (Minichiello, Aroni, Timewell, & Alexander, 1995). The researchers adopted a conversational style which allowed the interviews to reflect respondent thinking and expertise, increasing the validity of the results (Dey, 1993). Interviews lasted between 60 and 120 min with each being recorded by a digital Dictaphone and transcribed verbatim for analysis. The interview protocol was based on topics of discussion informed by the theoretical frame of reference developed by Munksgaard (2010). This allowed the researchers to focus questions on how mobile TV executives' perceived and understood network relationships and their reciprocity at the level of activities and resource integration. At the outset, the researchers made it clear to the respondents that the focus of the research was on reciprocal value propositions in practice. Each respondent was provided with a detailed overview, beforehand, of the concept. Specific topics from Munksgaard's (2010) framework were network picture, and relationship atmosphere and organizational characteristics. Network picture provided a basis for probing executives' perceptions of their actions, as well as the actions of partners across the network, which influenced relationship reciprocity as the basis of value propositions. Questions considered issues relating to which firms held important positions in influencing reciprocity, against others. Also considered, were issues relating to the direction of interactions, in terms of interdependencies being perceived as reciprocal,

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or unilateral. Finally, environment issues considered perceptions of indirect relationships in the network, and how they could direct or distort reciprocity in relationships. At a more dyadic level, interviews explored the relationship atmosphere of the mobile TV sector. This provided a basis for gaining insights into executives' perceptions of their own role, and that of immediate partners, in ongoing interactive relationships and communications. Questions considered issues relating to how dependence was distributed in dyadic relationships, in terms of reciprocity pertaining to the execution of power and authority. Co-operativeness concerned perceived compatibility of goals and strategies within network relationships in areas such as product/ service development for example. Interviews also considered organizational characteristics, probing executives as to the size, technology, internal structure and culture of their firms. The next section relates these topics to a schema for analysis, which focuses on the reciprocal value proposition concept.

Table 2 Template analysis framework. INT—Interactions INT/COM—Interactive communications in value proposition development INT/COM/DIA—Dialogical interactive communications INT/COM/DIR—Interactive communications direction INT/REC—Reciprocity of interactions in value proposition development INT/REC/INT—Interchangeable initiator–participant interactions INT/REC/SUP—Supplier-dominant interactions RES—Resource integration RES/INF—Information sharing in value proposition development RES/INF/IMM—Information sharing processes at a dyadic level RES/INF/THR—Information sharing processes at a network level RES/TCH—Technological linkages in value proposition development RES/TCH/IMM—Technological linkages at a dyadic level RES/TCH/THR—Technological linkages at a network level

4.3. Data analysis approach Data from the in-depth interviews was coded using a qualitative analysis technique known as template analysis (King, 2004). The template approach allows codes to be presented hierarchically, aiding the analytical process in categorizing and unitizing data. It allows the researcher to amend its use to the needs of their study. The template hierarchy was based on the platform of Ballantyne et al. (2011) for communicative interaction. The platform was designed to provide a basis for analyzing communicative interactions between network partners in developing reciprocal value propositions. We employed the interconnected stages one and two, analyzing the efficacy of specific interactive episodes between network providers and integrative network linkages. These two stages represent two parent themes for the template developed to analyze the research findings; Interactions and Resource integration. Further sub-codes were developed hierarchically from this. These sub-codes of analysis represented key aspects of Ballantyne et al.'s (2011) work on reciprocal value propositions discussed earlier. Interactive communications in value proposition development included analysis of dialogical interactive communications and interactive communications direction (uni-directional was taken as a negative), as specific interactive episodes or activities. Reciprocity of interactions included analysis of interchangeable initiator–participant interactions between suppliers and customers (supplier-dominant was taken as a negative). Information sharing, dyadically and across the network, and technological linkages at the same levels, related to specific integrative network linkages as resource integration. These analysis codes, operating at the level of activities and resource integration, linked to Munksgaard's (2010) network pictures, relationship atmosphere and organizational characteristics, operating at the same levels and also focused on reciprocity, in the data collection approach. This was aided by framing the data collection with respondents, around the concept of reciprocal value proposition. Table 2 presents the finalized template analysis coding framework. The process of analyzing interview transcripts resulted in certain codes being revised, removed, or added with subsequent changes made before finalizing the template hierarchy in line with King's (2004) guidelines. The flexibility of this technique meant that the template could be continually revised until all data collected had been coded and analyzed. When more than one researcher is involved in analyzing qualitative data there can be issues relating to coder integrity, training or inter-coder reliability. The template analysis approach can help address issues of reliability by introducing structure and consistency when categorizing and unitizing qualitative in-depth interview transcripts. The three authors of this paper initially worked independently within the template approach, while incorporating regular meetings. This led to eventual collective agreement on the finalized codes and their application

to the interview transcripts. As a further measure to ensure reliability, an outside expert in the area was consulted to provide further insight in finalizing the codes. The researchers also ensured they were proficient in applying the template approach, attending research study workshops and reviewing the relevant literature. While this addresses issues of inter-coder reliability there is a level of flexibility in the template approach, which is conducive to the nature of qualitative data analysis. 5. Research findings In this section we present research findings, organized around the two parent themes of analysis from the template framework (Table 2). This allowed the findings to relate explicitly to the research aim and questions posed. 5.1. Interactions Content providers, enablers and aggregators identified a need for dialogical interactive communications in the mobile TV network. Content providers needed to understand the foundation technologies, processes and regulations related to mobile TV provision for consumers. This facilitated content development to maximize impact within the technological boundaries of the mobile TV platform. Content providers and enablers together through dialogue involving contributions and listening to the other party, made decisions in the selection of either existing content from other channels, or the development of new content. Content aggregators were also involved in this ongoing dialogue, providing expert insights on connecting mobile TV content into the on-portal and off-portal environments. While these relationships were positive, such interactive communications were constrained when considering telco interactions. Telcos had considerable financial resources and controlled consumer on-portal access. Content providers, enablers and aggregators emphasized a shift in power in the mobile TV network from suppliers towards consumers. This was not discussed by telco respondents. These non-consumer facing respondents realized that consumers appreciated mobile TV content when they were given an initiating, as well as participatory, role in developing the value proposition. This was viewed as particularly pertinent, with new technologies such as collaborative filtering being discussed as critical to this reciprocity. Such technologies were discussed as a compliment to consumer empowerment and demands for personalized and customized content. However content providers, enablers and aggregators viewed consumer interactions as being controlled by telcos. Respondents

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from the telcos confirmed this, identifying market research tools developed to test mobile TV services with consumers before launch: “We conduct focus groups and surveys with consumers. What they require is on-portal exclusive content and personalized services that provide greater flexibility in terms of time-shifting and place-shifting possibilities; such as catch-up or video-ondemand (VOD).” Respondent Y Big brand names such as MTV and Disney provided exclusive content, which telcos determined and controlled on an on-portal only basis. Revenues from on-portal access were largely gained from consumer subscription for content and advertising. Respondents from the advertisers and advertising agencies were included in a dialogue with telcos concerning consumer requirements. They also revealed a particular interest in premium content provision, sponsoring events and catch-up content which thereby increased their revenues earned. Interestingly, they also revealed an increasing interest in potential revenues from advertising off-portal. Content providers, enablers and aggregators challenged and contested these findings. Their responses indicated limited dialogue and limited opportunities for them, or consumers, to initiate or participate in the development of reciprocal value propositions. While it was evident that telcos were interacting with consumers through market research, they claimed that these interactions were not of a dialogical nature. In this context, some respondents commented that telcos were using market research initiatives to “lock in” consumers to their on-portal mobile TV content and services. The key motivation appeared to be the bypassing of competing off-portal content and access channels. This would ensure stable revenue streams from consumers and advertisers were protected. Taken together, content providers, enablers and aggregators collectively called for the current modus operandi in the mobile TV network to be challenged. This was illustrated in the response: “Mobile TV will become a lucrative business only when personalized premium content becomes available off-portal as well as on-portal, a critical size of consumers buys this content, revenues flow equitably to all firms and all the technical and regulatory uncertainties are addressed.” Respondent L There was a unanimous call from these respondents for off and on-portal mobile TV value propositions which consumers could proactively shape. This was viewed as a means of countering consumer moves to access alternative online entertainment channels such as social networks (e.g. Facebook), often accessed through mobile phones. It is apparent from these findings, that a significant challenge to interactive and dialogically-based communications resided in telcos using their size and power to dominate the mobile TV network. This was creating tension and pessimism among network counterparts as to the future commercial viability of the mobile TV sector. Content providers, enablers and aggregators indicated negative performance consequences due to the non-reciprocal nature of value propositions. The findings in the next section on resource integration develop this further. 5.2. Resource integration The future commercial viability of mobile TV as a value proposition, was located in providing consumers with content that directly, or indirectly, connected to mobile TV content providers, ad-serving

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providers and content aggregators. Considering resource integration, the findings revealed that they were not integrated into the mobile TV network. Marketing technologies, for example, employed by telcos related to sales force, price management and the management of consumer relationships. The information provided as a learning resource was not communicated with content providers and aggregators, who were well placed to utilize it in developing value propositions. This was the same for service technologies, with telcos determining onportal content offerings judged not to be optimal by content provider and aggregator respondents: “The current business model does not give much room for increasing revenues substantially because there is little real interaction. Collaboration based upon trust and mutual benefit will be the key factor for mobile TV success.” Respondent J Key to this were issues relating to the balance of power and significant information asymmetry in the mobile TV network. Also, consumers were increasingly empowered by new technologies applicable to mobile TV content and delivery. The findings below develop this further. Respondents indicated that consumers had accessed mobile TV content through their mobile phones via telco portals (on-portal access) in the early days. From these portals consumers could connect and browse a list of channels or on-demand video content, within a safe portal environment much like the early days of the web (e.g. AOL). Such a service was viewed by telco respondents as a means to boost their revenues through additional subscription fees and advertising revenues, given they controlled consumers' access to content. An alternative way for consumers to access was to view video content from content providers and aggregators off-portal. Consumers could then circumvent telcos' on-portal services, providing extra revenues not to the telcos, but to off-portal content providers and aggregators. A third provider identified by respondents, with potential to develop the mobile TV value proposition, were the television networks. With the growing viewing time on mobile TV, they were attempting to extend their activities by customizing existing channel content to mobile phones, with potential on and off-portal. Telcos were attempting to defend mobile TV content and services accessed, exclusively, on-portal: “The game consists of trying to connect to end-users as directly as possible so that they access as seamlessly as possible to a specific service. For example, telcos provide content on-portal as the homepage when users connect to the Internet. Opposing this offportal, some content aggregators are offering users opportunities to download an application that allows them to directly connect to content without going through the telcos' portal.” Respondent J Telcos were judged by most respondents as having a dominant position in relation to technology linkages and consumer information access. It was noticeable that non-consumer facing respondents were acutely aware that attempts to protect the on-portal access route to content was a threat to the future success of the mobile TV sector. Empowered consumers were viewed as requiring greater facilitation and access to off-portal routes to content. These respondents considered constraints on resource integration as a barrier to the co-learning and collaboration required to transfer consumer needs across the network. Consumer empowerment and off-portal access, could then be moved from being viewed as a threat to telcos towards an opportunity for all. We discuss these findings in the context of key literature in the next section.

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6. Discussion of findings The concept of reciprocal value proposition, while compelling as a concept for the mobile TV network, is not unconstrained in practice. We identify and discuss constraints to reciprocal value proposition development in this section, relating to dialogue and knowledge brokerage. We also show how these constraints, simultaneously, enabled reciprocal value proposition development. Limitations to the study are also presented, as well as implications for further research.

6.1. Constraints to reciprocal value propositions in practice Vargo and Lusch's (2004) work on S-D logic has the value proposition as a central foundation. However, there has yet to be detailed explanation of the concept as Ballantyne et al. (2011: 205) note, “from conceptualization through to modes of practice”. They address this while developing the concept of reciprocal value propositions. We provide empirical evidence which provides new insights into reciprocal value propositions in practice, explicating the dynamics which are inherent. Overall, while the reciprocal value proposition concept is compelling, in practice and in a pertinent internet-driven sector, it faced considerable constraints. The findings reveal that powerful telcos are an impediment to reciprocity in developing value propositions, preferring to defend on-portal content, and with propositions that were determined by them. It was also clear that empowered consumers desired greater off-portal mobile TV content offerings and access. New technologies, such as collaborative filtering and other forms of user generated content opportunities, were empowering consumers to take on initiating as well as participating roles in value proposition development (see Chorianopoulos, 2008 for an interesting treatise on collaborative filtering technologies in the mobile TV sector). This provided opportunities for the mobile TV network to develop close collaborative relationships with consumers, in order to craft mutually beneficial value propositions (Kowalkowski, 2011). However, telcos were focusing on the object of exchange (on-portal content), adopting a G-D logic view that suppliers are initiators of value propositions, and that products form the basis of new opportunities for value propositions (Vargo & Lusch, 2004). The telcos viewed other network partners and consumers from a transactional perspective, being more or less faceless and reasonably easy to replace. They were confronting and challenging, in terms of their resources and expertise, content providers, enablers and aggregators choosing to focus more on off-portal markets. Part of this resided in controlled access to consumer insight in the defense of on-portal access, forming the basis of value propositions initiated by the telcos. In doing so, they sought to persuade consumers to access content onportal by emphasizing the predictable and reassuring aspects compared to off-portal content. In this respect, the findings concur in part with the original FP7 of S-D logic (Vargo & Lusch, 2004), which indicates that supplying firms can only initiate value propositions. Other respondents in the findings emphasized the need for closer relationships and integration in the mobile TV network, as empowered consumers were moving away from controlled on-portal environments towards the much wider availability of off-portal mobile TV content (from open internet sources such as YouTube for example). This contrasted with a deep-play bellicose vocabulary reflected in telco respondents' use of metalanguage value claims, articulated as plural pronouns in the interviews such as “our position”, “our content” and “our consumers”. They were focused on “playing markets” and taking a win/lose attitude to interactions with suppliers, competitors and even consumers. This can be amplified by considering Geertz's (2005) observations on the concept of “deep play”— a play in which the competitive stakes are so high that in telcos defense of on-portal content, dialogical communications are stymied.

However, it was not just dialogue that was constrained in practice. The network position of telcos and their access to consumer insight, implied opportunities for a more pivotal role in reciprocal value proposition development. Drawing on Lindgreen and Wynstra (2005), telco anxiety towards protecting on-portal access prevented them from taking on a knowledge brokerage role in the mobile TV network. We contend that in reciprocal value propositions an overlooked but, in the context of our findings, critical role relates to knowledge brokerage. Burt (1992, 1997) outlines how knowledge brokers through networks can use social capital to transmit and receive knowledge that is not readily available to other network members. The ability telcos had to connect non-consumer facing suppliers with consumers, gave them the potential role of knowledge broker and arbitrageur (Hargadon, 1998). In effect, their defensive role elevated telcos as the “king brokers” and “arbitrageurs” of knowledge. That is to say, they were arbitraging access to consumer insight as a knowledge broker, effectively constraining access to knowledge about evolving business conditions and in the anticipation of market opportunities. 6.2. Vestiges of the network system as enablers of reciprocal value propositions The findings pertaining to constraints discussed, bring into sharp focus that one set of firms—telcos—were attempting to preserve or maintain on-portal mobile TV content access. Against this, another set of firms—mobile TV content providers, enablers and aggregators— sought to redefine network communicative interactions to access knowledge about business conditions, and to develop new value propositions that were inclusive of off-portal mobile TV content access. There was therefore vocabularies of motive surrounding the basis for (in) action identified in the two forms of constraints to reciprocal value propositions in practice—dialogue and knowledge brokerage. The need for change and further development of off-portal content was evident in wider mobile TV network responses, while preserving the status quo and defending on-portal content was evident in telco responses. The broader change literature suggests that the need for change is often not recognized and requires institutional “jolts”. According to Greenwood, Suddaby, and Hinings (2002), these jolts can be a form of social upheaval, technological disruption, competitive discontinuity, or regulatory pressure. The recursive role of agency was born in the counter-claims made by mobile TV content providers, enablers and aggregators—frequently understood by what Maguire, Hardy, and Lawrence (2004) term, the “institutional entrepreneurial actor”— which challenged the status quo and revealed a desire to move towards Lindgreen and Wynstra's (2005) network system (see for e.g. Dacin, Goodstein, & Scott, 2002). In particular, vestiges of a network system were evident in their desire for interactive and dialogically-based communications with mobile TV network partners, being mindful of “breaking away” from one-party dominance and reciprocity constraints. As Farjoun (2010: 210) notes, “central to mindfulness…is a particular questioning attitude and conscious cognitive disposition against taking things for granted”. This supports Ballantyne et al.'s (2011) identification of a mindset change, which can move firms towards being open to dialogical communications with network partners and to learning together. However, such a mindset change has to overcome telco anxiety towards anticipated market outcomes related to off-portal access. Given the significant market challenges facing the mobile TV sector, we argue from the findings that constraints to reciprocal value propositions in practice—dialogue and knowledge brokerage—will also take on an enabling role. Telcos need to be persuaded that they can move constraints to enablers in approaching knowledge renewal— the generation, sharing and application of knowledge (Ballantyne & Varey, 2006). Operating under Lindgreen and Wynstra's (2005) network system, they can achieve this by taking a coordinating and

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cooperative approach, incorporating dialogue and a knowledge brokerage role. This goes beyond Vargo and Lusch's (2004) assertion that knowledge is the fundamental source of competitive advantage. Drawing from the findings, telcos move toward knowledge renewal through learning together with partners at a network level. This is based on a platform of communicative interaction, enabled by reciprocal value proposition development. This provides empirical backing for Frow and Payne's (2011) contention, that value propositions can play an important role in helping to identify opportunities for value co-creation, as well as providing a platform to create stability within network relationships. Key to this is telcos taking a knowledge brokerage role focused on dialogue across the mobile TV network. Uzzi's (1996) work on embeddedness, would suggest that mobile TV network ties can then become embedded in structures of social relations over time. This fits with Ballantyne et al.'s (2011) assertion that reciprocal value proposition development will evolve as relationships do. This can be characterized by a progressive building of trust, resulting in a higher propensity of network parties to engage in dialogical communications, and resolve differences when they arise in the relationship (Uzzi, 1996, 1997). Innovative and reciprocal value propositions become possible, with the confrontation between mobile TV suppliers' producer knowledge and empowered consumers' user knowledge, creating a situation conducive to knowledge renewal (see for e.g. Von Hippel, 1988). Value propositions then become reciprocal and not the sole prerogative of any one organization, but the responsibility of a network of suppliers and consumers taking on interchangeable initiating and participating roles. 6.3. Limitations and future research developments The qualitative approach of this study limits its ability to generalize beyond the sample of mobile TV respondents. Related to this, the focus on one sector (the mobile TV sector) and one geographic region of this sector, also limits the ability of this study to provide generalized results. Future work looking to generalize the findings, will require a focus on sectors that can produce a basis for comparison and further development of the reciprocal value proposition concept. A particularly interesting area of future research could be an analysis of other industrial sectors which are not internet-driven. This could focus on the level and nature of competitive intensity, rivalry and power struggles and the ensuing challenges of information asymmetry and constraints to dialogue in developing reciprocal value propositions. It may be that such factors are not as prevalent in some sectors, or they may be more pronounced in others. Specifically, it would be interesting to examine if the consumer is as critical in markets where the desire for empowerment and personalization may not be as prevalent. Future research could consider less dynamic markets, and the role of flexible and interchangeable positions in developing reciprocal value propositions between initiators and participants. Such comparisons with this study could provide support and extensions to the reciprocal value proposition concept, and S-D logic research at a more general level. Also, the notion of dialogical communication and knowledge brokerage deserves further enquiry, to better understand their role as potential enablers of reciprocal value propositions. In sectors with, for example, less prevalent constraints to reciprocal value propositions, it would be interesting to consider the role of dialogue and knowledge brokerage. Also, and within this, what mindsets are evident and what is the nature of knowledge renewal and the embeddedness of social relations over time in such sectors? How do reciprocal value propositions, in this instance, facilitate as a platform for communicative interaction? These are questions that, when answered, can begin to make the findings of this study more generalizable, extending our thinking around reciprocal value propositions in practice.

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Yann Truong is Associate Professor of Marketing and Technology Management at ESC Rennes School of Business in France. He is also Head of the Center for Technology and Innovation Management (C-Tim) of the school. His research interests are digital marketing with a focus mobile phones, and the management and marketing of innovations. He also works in several funded research and development projects with large and small companies within the telecommunications and broadcast industries. His work has been published in Journals such as: European Journal of Marketing, Journal of Strategic Marketing and International Journal of Market Research.

Geoff Simmons is a Lecturer of Marketing at the Ulster Business School, University of Ulster. His research interests are in strategic marketing with an emerging interest in service dominant logic strategic implications for industrial marketing management. He has published in Journals such as: International Small Business Journal, European Journal of Marketing, Environment & Planning A, Journal of Strategic Marketing, and International Journal of Entrepreneurship and Innovation. Geoff is working on a 3 year research project involving retailer loyalty card data and its impact upon market orientation in small food businesses.

Mark Palmer is a Senior Lecturer of Marketing at Birmingham Business School, University of Birmingham. His research interests are in international retailing as well as the role of marketing in corporate strategizing and market creation. This research has been published in Journals such as: European Journal of Marketing, Journal of Marketing Management, International Review of Retail, Distribution & Consumer Research, Journal of Economic Geography, Environment & Planning A, and the Journal of Strategic Marketing. A current study has received financial support from The British Academy to investigate the strategic reactions of dot.cause activists and communities.