Managing the gaps between intended and enacted value propositions : A qualitative study exploring internal marketing in a retail context

Abstract: The fierce competition on the retail market has led firms to stop focusing on firm-customer transactions and start focusing on firm-customer relations. New customer demands makes it impossible for firms to gain a sustainable advantage by focusing only on their goods assortment. This forces retailers to consider the customer experience and differentiate themselves by how they offer what they offer. This have led to that many retail companies try to shape the behaviours and emotional displays of their frontline employees in encounters with customers. Many firms define customer service concepts as an attempt to create high quality customer experiences. However, a successful realisation of these concepts can be challenging.   Service-Dominant Logic researchers argue that firms cannot single headedly create value but that it is co-created in the interaction with customers. Therefore, they can only create value propositions, which is a proposal for value co-creation based on an integration of products and services. Services marketing researchers emphasise the importance of internal marketing for enabling frontline employees to represent the firm in the interactive value-creating process with the customer. Prior research focuses on the customer-driven development of value propositions, and techniques to conduct internal marketing, but does not provide relevant theories about the realisation of value propositions or the implementation of these internal marketing techniques. This thesis conceptualise the human factor of the realisation of the value proposition with the concept of intended and enacted value propositions. The purpose was to develop a deeper understanding of how internal marketing can be used to manage the gaps between intended and enacted retail value propositions. This was addressed by investigating one of Sweden’s largest retail companies on commission. Since the company has requested to remain confidential, it will be called Anonymous Commission Company (ACC) in this thesis. The current study has answered the following research question: “How can the gaps between intended and enacted retail value propositions be managed through internal marketing?”   The research question was answered through a qualitative study and in-depth interviews with both CS concept managers and frontline employees. The intended value proposition was investigated by a combination of ACC documents related to the CS concept, and interviews with the CS concept managers. By interviewing the frontline employees, their perceptions and enactment of the value proposition was investigated, as well as how they experience the current internal operations at ACC. The findings confirmed the proposed concept of intended and enacted value propositions, and four main barriers causing the gaps between them were identified through a thematic network analysis. Internal marketing theories were used to analyse how retail companies can overcome these barriers by engaging, enabling, empowering and ensuring their frontline employees. The thesis offer implications for retail managers on how they can manage the gaps between intended and the enacted value propositions. The study contributes to prior research by combining value proposition theories and internal marketing theories, and by offering detailed recommendations for retail firms. Furthermore, the study enriches the practical implications regarding retail value propositions and retail value proposition realisation.