Title: A framework for differentiation in composed digital-physical products

Authors: Martin Baumers; Ian Ashcroft; Steve Benford; Martin Flintham; Boriana Koleva; Zsófia Tóth; Heidi Winklhofer

Addresses: Faculty of Engineering, The University of Nottingham, Nottingham, NG7 2RD, UK ' Faculty of Engineering, The University of Nottingham, Nottingham, NG7 2RD, UK ' School of Computer Science, The University of Nottingham, Nottingham, NG8 1BB, UK ' School of Computer Science, The University of Nottingham, Nottingham, NG8 1BB, UK ' School of Computer Science, The University of Nottingham, Nottingham, NG8 1BB, UK ' Nottingham University Business School, The University of Nottingham, Nottingham, NG8 1BB, UK ' Nottingham University Business School, The University of Nottingham, Nottingham, NG8 1BB, UK

Abstract: Product-service systems (PSS) composed of physical products and digital services are emerging as an important new product category. In this paper we suggest that the established metaphor of layering is insufficient to capture the diverse ways in which PSS can be differentiated for, and by, consumers. Responding to this issue, we develop a new framework that centres on the distinction between different modes of horizontal product differentiation, including static, dynamic, compository and user-journey differentiation. Using a design science research (DSR) approach, the framework is applied to two case studies of prototype PSS that use augmented reality to connect physical goods to digital services. Building on this analysis, we argue that the uncovered aspects of differentiation should be further investigated in the management literature and that the existing metaphor of layers should be superseded by a more suitable one.

Keywords: product-service system; horizontal product differentiation; compository differentiation; user-journey differentiation; augmented reality; layers; design science research; CIMO; context-intervention-mechanism-outcome.

DOI: 10.1504/IJMMS.2020.112351

International Journal of Mechatronics and Manufacturing Systems, 2020 Vol.13 No.4, pp.286 - 298

Received: 24 Jul 2019
Accepted: 03 Jul 2020
Published online: 12 Jan 2021 *

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