Associating consumer perceived value with business models for digital services

Aaron Baird and T S Raghu

European Journal of Information Systems, 2015, vol. 24, issue 1, 4-22

Abstract: As digital services increasingly deal with commodity offerings (i.e., digital content and features that are similar between service providers), service providers are seeking to differentiate themselves with variations in their digital service business models. Research, though, has yet to consider the association of consumer perceived value with digital service business models underlying technological innovations. We seek to demonstrate that consumer value for digital service business models may be quite different even when consumers have similar preferences for standard technology characteristics. In the context of this paper, we specifically consider consumer perceived value associated with Personal Health Records (PHRs) and PHR digital business models, through the use of an integrated latent variable and choice empirical model. We find that although consumer perceived value for PHRs is generally high, when offered a choice between three competing PHR business models, consumers state high value for only two of the business models in the choice set: PHRs offered directly by groups of medical providers and Integrated PHRs. These findings suggest that while perceived value may be high for generally considered digital services, variations in the underlying digital service business models are likely to have significant impacts on consumer valuations of digital services.

Date: 2015
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DOI: 10.1057/ejis.2013.12

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