Innovation of Meaning through Institutional Work

Innovating a product or service’s meaning implies working on its symbolic and emotional values to provide customers a new “why” for its purchase and use (Verganti, 2009). Product meanings have been associated to tangible attributes that constitute product languages and their signs: color, shape, materials and any other tangible attributes that can communicate meaning (Dell’Era et al., 2008). However, the way a new meaning can be conveyed through services is still unclear. Due to their intangible characteristics, value in a service interaction is thought to emerge during the experience, rather than being communicated by signs (Vargo and Lusch, 2008). In this paper, we aim to understand how companies can convey new meanings through new customer experiences. The study is based on a paired comparison between two paradigmatic cases: McDonald’s and Starbucks, which proposed an innovation of meaning for their retail services based on the same socio-cultural changes. To compare the differences in the translation of the new meaning in practice we analyze the customer perception of meaning through text analysis, specifically topic modelling, running the LDA algorithm on nearly 8,000 customer reviews. Findings show that customers’ perception of Starbucks meaning is aligned with the company’s intention. On the other hand, McDonald’s’ attempt to introduce a new meaning has not found confirmation in customer perceptions, who have rather remained attached to the old one. We read this empirically-observed discrepancy through the lenses of the institutional theory, analyzing the different mix of strategies enacted by the two companies to change their retail services meaning. McDonald’s strategy to introduce values related to sustainability and authenticity mainly worked on breaking the current meaning to perform an opposite positioning. On the contrary, Starbucks built on their current meaning by maintaining some core elements of its offering, as well as making new ones. We state that companies might reach a higher alignment between the intended and the perceived meaning by choosing how to leverage institutions to translate a new meaning in a new retail service. By understanding what happens in the context of the service experience, this paper contributes to the innovation management discourse, advancing the innovation of meaning framework and applying an institutional perspective on service innovation.