Customer value creation through product quality and customer usage of product functions: Managing the industry shift towards smartphones

Abstract

This article investigates how the industry shift from traditional cell phones to smartphones has impacted the process of customer value creation and thus caused the rapid demise of industry leaders and the rise of new global leaders. It explores this mechanism within the chain from quality-induced and customer-co-created product functionality via hedonic, symbolic, and utilitarian customer value to customer loyalty. Based on consumer data from Bolivia and Japan, the study illustrates that the greater market success of smartphones than traditional cell phones can mainly be explained by higher hedonic and symbolic value creation. This additional value creation is caused by higher product quality and greater opportunities for customers to co-create value through active usage of customized product functions.