The influence of gamification on attitudinal and purchase loyalty in the context of branded apps and websites

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Master’s Thesis

The influence of gamification on attitudinal and

purchase loyalty in the context of branded apps

and websites

Danique Bruggeman (10736778)

March 16, 2015

Msc. in Business Administration

Marketing track

University of Amsterdam

Faculty of Economics and Business

Under supervision of Drs. J. Labadie

second supervisor: Drs. R.E.W. Pruppers

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Statement of Originality

This document is written by Danique Bruggeman who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Acknowledgements

I would like to thank Drs. J. Labadie for the valuable feedback, providing support and supervision throughout the whole thesis process. I would also like to thank Drs. R.E.W. Pruppers for helping by brainstorming about the thesis subject and his advice during the thesis process. I would also like to show gratitude to all the respondents that have participated in my research.

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List of Tables

Table 1 “Levels of Game Design Elements” (Deterding et al., 2011, p.12)... 19

Table 2 Overview of the four conditions ... 36

Table 3 Means and Standard Deviations of Control Variables ... 44

Table 4 Cronbach's Alpha of the Variables of all Conditions ... 46

Table 5 Descriptive Statistics of the groups for gamification and type of medium ... 46

Table 6 Paired Sample T-Tests of the groupings... 48

Table 7 Overview of Within-Subject and Between-Subject Factors ... 51

Table 8 Descriptive statistics of the repeated-measure MANCOVA groups ... 52

Table 9 Multivariate Tests of the mixed MANCOVA ... 54

Table 10 Tests of within-subject factors of the mixed MANCOVA ... 55

Table 11 Tests of between-subjects effects of the mixed MANCOVA ... 56

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Figure 1 Conceptual framework attitudinal and purchase loyalty ...34

Figure 2 Plot of the main effect of gamification on purchase loyalty...59

Figure 3 Plot of the main effect of gamification on attitudinal loyalty...60

Figure 4 Plot of the main effect of the type of medium on purchase loyalty...62

Figure 5 Plot of the main effect of the type of medium on attitudinal loyalty...63

Figure 6 Plot of the moderating effect of intrinsic motivation on the main effect of gamification on purchase loyalty ...65

Figure 7 Plot of the moderating effect of intrinsic motivation on the main effect of gamification on attitudinal loyalty ...67

Figure 8 Plot of the moderating effect of extrinsic motivation on the main effect of gamification on purchase loyalty ...69

Figure 9 Plot of the moderating effect of extrinsic motivation on the main effect of gamification on attitudinal loyalty ...70

Figure 10 Plot of the moderating effect of the type of medium on the main effect of gamification on purchase loyalty ...72

Figure 11 Plot of the moderating effect of the type of medium on the main effect of gamification on attitudinal loyalty ...74

Figure 12 Plot of the main effect of intrinsic motivation on purchase loyalty...76

Figure 13 Plot of the main effect of intrinsic motivation on attitudinal loyalty...77

Figure 14: Distribution of Age ...108

Figure 15: Pie Chart Nationality ...108

Figure 16: Pie Chart Highest Achieved Level of Education ...109

Figure 17 Boxplots before excluding outliers ...110

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Abstract

The aim of this study was to research how gamification influences the change in purchase and attitudinal loyalty in branded apps and branded websites. Furthermore, this study has researched whether this effect becomes stronger for higher values of intrinsic and extrinsic motivation. An experimental design with four conditions has been conducted. A mixed model MANCOVA using repeated measures was used to test the hypotheses. In this study there was no support found that gamification influences the change in purchase loyalty and attitudinal loyalty in branded apps and branded websites. There was also no support found for the notion that this effect is stronger for higher values of intrinsic and extrinsic motivation. This study could not provide evidence that the change in brand loyalty was higher for branded apps than branded websites and these hypotheses were therefore rejected. No support was found that the effect of gamification on brand loyalty is stronger when participants used a branded app compared to when they used a branded website. The plots of the effects indicated that the effects that were hypothesized in this study might be present, but it was not possible to show their statistical significance. The rejections of the hypotheses in this thesis might be caused by the limitations of this study, such as only a short interaction with the branded app or website, no availability of optimal branded apps and websites to analyse the effect of gamification and a lack of possibility for controlling participants’ usage of the mediums. Additionally, an even larger sample size than used in this thesis might have improved the ability to significantly detect an effect of gamification on brand loyalty. This study contributes to the unexplored field of the influence of gamification on brand loyalty and shows possible limitations as well as suggestions on how to overcome these limitations when researching this influence.

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Introduction

1. Introduction

In 2012 Samsung has introduced a social rewards program named Samsung Nation. Samsung wants people to visit its website, reviews its products and watch its videos. By doing so, people can unlock badges, level up and get into a ranking list. People also have a chance of winning Samsung products if they participate in certain activities such as registering a product or submitting a review on their platform. Samsung Nation thus uses different kinds of game elements, such as badges and rankings to get people involved with Samsung, which can possibly cause a positive word of mouth and brand loyalty.

1.1 An introduction to gamification and brand loyalty

In the marketing literature a high importance is given to brand loyalty for at least three decades (Howard and Sheth, 1969). Companies want to have consumers who are loyal to their brands. Creating brand loyalty has certain marketing advantages like a greater trade leverage and reduced marketing costs (Aaker, 1991). Loyalty also leads to consumers who are more resistant against persuasion of competitors of the brand and provides a favourable word of mouth (Dick and Basu, 1994). Chaudhuri and Holbrook (2001) conducted a framework in which market share is positively related to purchase loyalty and the relative price (compared to its competitor) is positively related to attitudinal loyalty. This means that creating both attitudinal loyalty and purchase loyalty leads to big advantages for managers. Companies are searching for new channels through which they can serve consumers and cause brand loyalty. Companies have found a new opportunity by creating an app through which consumers can for example find information or buy products through the app. A lot of people have a smartphone with applications on it. Not only applications of social networks and games, but also

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applications provided by brands can be downloaded. US consumers use 80 percent of their time spent on smartphones and tablets by using applications (Khalaf, 2014).

Mobiles have a very personal character; a lot of consumers have their smartphone with them every day and have information on it which is specific to them. Smartphones seem to be a big opportunity for marketers because they can now reach

consumers based on time and location (Grant and O’Donohoe, 2007; Roach, 2009;

Barutçu, 2007). Consumers are resistant to mobile marketing, but when they gave permission to the company to advertise on their mobile the ads have more potential (Persaud and Azhar, 2012). “Mobile phone apps provide a pull marketing opportunity delivered via a platform that consumers have strong emotional attachments to. Many view their mobile phones as extensions of themselves” (Bellman et al., 2011, p. 198). Apps are downloaded by consumers. By doing this, consumers give permission to companies to be present on their mobile. This would suggest that apps, because they are permission based and a pull technology, are having a high potential for marketers. Apps also can provide high levels of interaction, which can cause engagement with the message which is presented by the app and therefore can be highly persuasive (Calder 2009; Wang 2006).

According to Bellman et al. (2011) branded apps have a positive effect on the attitude towards the brand and also increase purchase intention. In this study Bellman et al. (2011) observed an increased purchase intention and positive attitude change. By controlling for other novelty effects they showed that this observation was caused by the use of a branded app. This suggests that branded apps can be persuasive and are able to create attitudinal loyalty and purchase loyalty. As a conclusion, apps have unique benefits and make it possible to follow consumers and give them localized information

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Introduction

consumers actually want to see, rather than annoying “push” messages” (Bellman et al.,

2011, p. 198).

Bellman et al. (2011) emphasize the importance of future research developing understanding in maximizing the impact of mobile phone apps. One possible way to create brand loyalty and thus maximize the impact of apps, might be gamification. Gamification is defined as “the use of game elements in non-game contexts” (Deterding et al. 2011, p.10). Examples of gamification elements are points and badges that are used to reward a consumer for example for writing a review of their product or buying their product. Multiple researchers have emphasized the importance of gamification in commercial contexts (Deterding et al., 2011; Huotari and Hamari, 2012). On the Gartner Hype Cycle (Gartner, 2013) gamification is situated in the peak of inflated expectations and is expected to be an opportunity for businesses. Researching the effects of gamification is consequently also of high importance for businesses.

According to the research firm M2, companies spent $100m in 2010 on gamification methods and it predicts companies will spend $2.8bn on gamification methods in 2016. Companies are, regardless of industry focus, investing money in gamification methods to increase user engagement and brand loyalty (O’Reilly, 2012). A lot of brands, like Nike, Adidas and LinkedIn use gamification elements in their mobile apps to achieve more purchases of their brand products. In 2013, Nike developed a mobile app that uses gamification elements. The Nike+ Running app has for example the ability to set running goals, and get Nike fuel points as a reward for achieving these goals. The mobile app also gives you the possibility to present your running skills on a social network site, like Facebook. The company developed a Nike sportwatch and Nike fuelband which both can be connected to the mobile app. Nike hereby delivers consumers a unique value by being able to connect the online with the

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offline world.

Gamification is used a lot in market research and for human resource and educational purposes and has been researched in these contexts. Until now little academic research has been done regarding the influence of gamification elements on

brand loyalty in a mobile app and website context. “Gameful design should strive for

intrinsic motivation, which is the kind of motivation in which the activity is rewarding

in and of itself” (de-Marcos, 2014, p.2). Rewarding systems are an example of a

gamification element that stimulates extrinsic motivation. This element should be able to engage consumers and cause the activity itself to become the reward, which leads to intrinsic motivation. (Kankanhalli et al., 2012). Efficient gamification employs intrinsic motivation to create long enduring effects (Groh 2012; Kankanhalli et al., 2012).

1.2 Problem definition

To address the issues discussed in the previous text this thesis focuses on researching the possibility of using gamification to enable companies to create a higher brand loyalty. In this study the mediums of choice through which brand loyalty is created are branded mobile applications and branded websites. As mentioned before there is especially a lack of research papers that focus on mobile applications for branding and there is until today little research done that focuses on the possible influences that gamification have on branding through mobile applications.

The main research question for this thesis is therefore:

 How does gamification influence brand loyalty in branded mobile apps and branded websites?

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Introduction

The problem will be researched by analysing the following issues:

 What is the effect of branded apps on purchase and attitudinal loyalty?

 What are the differences between mobile applications and websites and what advantages do branded apps offer for both consumers and marketers?

 What is the current state of research regarding gamification?

 How does gamification influence purchase loyalty and attitudinal loyalty in a branded mobile app?

 How does gamification influence purchase loyalty and attitudinal loyalty in a branded website?

This study aims to research the influence of gamification elements on brand loyalty through branded mobile apps and branded websites. By answering the sub questions the main research question can be answered.

1.3 Managerial contribution

This study has multiple purposes. Gamification is a new concept and used by different companies. There is only little research done concerning the effect of gamification and the advantages it has for companies. From a managerial viewpoint knowing how gamification influence brand loyalty through mobile branded applications and branded websites might create new opportunities. Being able to create brand loyalty is important for managers because it has certain advantages, like a greater trade leverage and reduced marketing costs (Aaker, 1991). Therefore research should be done investigating the possible positive relationship between gamification and brand loyalty.

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1.4 Theoretical contribution

Until now, research has focused on describing the concept of gamification. There has been little academic research addressing the influences of gamification on branding through mobile apps and website. This thesis provides an entry into this topic and aims to provide a theoretical framework on gamification in the context of branding. There will be researched how gamification influences brand loyalty through both the mobile app platform and the website platform. There are certain delimitations for this

study. The focus of this study will be on the “online branding”, which means that

gamification will not be tested in the offline world, but only in branded apps and websites. Also, this study will focus on branded mobile apps, and therefore it will not be tested for apps available on the internet. For this study it is namely important to test the influence of gamification on purchase and attitudinal loyalty and how this works through mobile apps and websites.

1.5 Structure

The thesis structure is as follows. The introduction serves to introduce the field of research and give a background of the research. It explains the problem and purpose of the thesis and motivates the research.

The following chapter presents the theoretical background, defines essential concepts and theories and gives a literature review to connect it with previous research. First it defines the concepts of branding, especially attitudinal loyalty and purchase loyalty. Further definitions for gamification are given and concepts of mobile applications are explained. Building upon that it provides a status quo of gamification in the context of marketing and the use of mobile applications for branding. The concepts of extrinsic and intrinsic motivation will be explained. Following, the self-determination theory will be described, including the three needs, namely relatedness, competence and

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Introduction

autonomy. Then it aims to draw a connection between these topics and derives hypotheses and a research framework.

In the next part the research methodology is presented in detail. It describes how the empirical research is conducted and the methods that were used to derive results are explained. A focus is put on why the methods and models were chosen, what results can be expected and were the limitations of these methods are.

The succeeding section presents the empirical study that was done and the results of this study. It provides the gathered data such as the data from the surveys. In the subsequent chapter the data are analysed using the methods described before. The results of the analyses are presented and interpreted using the theoretical framework.

The next part discusses the results that were derived in the previous chapter. The results are reviewed in order to answer the research questions. The purpose is to give managerial advice and to deepen the theoretical understanding to provide both a managerial and theoretical benefit. Finally limitations of the results are given and suggestions for further research are proposed.

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2. Branded apps and brand loyalty

As smartphones gained main importance in people’s lives, new kind of methods

in advertising are available. On average smartphone users spend 80% of their mobile minutes with apps (Khalaf, 2014). People download on average forty applications on their mobile phone of which they use fifteen frequently (Gupta, 2013). For marketers this means there is a huge new platform through which they can communicate with consumers.

2.1 The effect of branded apps on purchase and attitudinal loyalty

Most brands are already using mobile applications. 92 Brands of the top 100

Interbrand’s Best Global Brands, have one or more apps available in the Apple Apps

store. For Google Play, the number of brands who use at least one app was 75 (Hezemans, 2013). Branded apps are “conceptually defined as software downloadable to a mobile device which prominently displays a brand identity, often via the name of

the app and the appearance of a brand logo or icon, throughout the user experience”

(Bellman et al., 2011, p.191). For marketers branded apps are more cost-effective than traditional advertisements such as branded websites, because they have the ability to directly and precisely reach the target group, without targeting other consumers who are not part of your target group (Gupta, 2013). Branded websites are defined as “websites that are designed to be an integral part of the ﬁrm’s overall advertising campaign, with

the objective of brand building.” (Tung et al., 2006). In comparison to traditional

advertising, apps are seen by consumers as more relevant and less intrusive (Bellman et al. 2011). According to Bellman et al. (2011) branded apps have a positive effect on the attitude towards the brand and also increase purchase intention. The effect on attitude is larger than the effect on purchase intention. In this research, alternative explanations

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Branded apps and brand loyalty

or seeing information about unfamiliar brands” (Bellman et al., 2011, p.198), are excluded. The effect on both attitude and purchase intention is therefore caused by the branded app itself. This effect might be due to a high level of user engagement which is caused the experiential or informational apps used by Bellman et al. (2011) (Calder et al., 2009). The research suggests that branded apps are able to create attitudinal loyalty and purchase loyalty. Bellman et al. (2011) emphasize the importance of future research developing understanding in maximizing the impact of branded apps. Mobile apps can have different functions, like informational, serving as a new buying platform, entertaining, educating or persuasive. One of the goals of managers to produce a branded app is creating brand loyalty, as this is a predictor of higher market share and an higher relative price Chaudhuri and Holbrook (2001)

2.2 The importance of attitudinal loyalty and purchase loyalty

“The importance of brand loyalty has been recognized in the marketing literature

for at least three decades” (Howard and Sheth, 1969, p.232). Oliver (1999, p.34) defines

brand loyalty as “a deeply held commitment to rebuy or repatronize a preferred

product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour”. Brand loyalty leads to consumers who are more resistant against persuasion of competitors of the brand and provide a favourable word of mouth (Dick and Basu 1994). When consumers are brand loyal, the brand therefore has certain marketing advantages compared to its competitors, like a greater trade leverage and reduced marketing costs (Aaker, 1991). Chaudhuri and Holbrook (2001) describe two dimensions of loyalty, namely purchase loyalty and attitudinal loyalty which can both lead to marketing advantages. Purchase loyalty is “the willingness of the average consumer to repurchase the brand”. (Chaudhuri and

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Holbrook, 2001, p.83). And “attitudinal loyalty is the level of commitment of the

average consumer toward the brand” (Chaudhuri and Holbrook, 2001, p.83). Chaudhuri

and Holbrook (2001) conducted a framework in which market share is positively related to purchase loyalty, and the relative price (compared to its competitor) is positively related to attitudinal loyalty. Marketers are thus highly interested in creating both attitudinal loyalty and purchase loyalty as this leads to big advantages over the brand’s competitors.

2.3 Gupta’s five strategies to create value for consumers in branded apps

According to Bellman et al. (2011) apps can grow interest in a product category. The invention of applications for mobile smartphones has caused new opportunities for marketers, as they might also be able to create brand loyalty. Branded mobile applications are therefore becoming a necessity in the marketing field. As consumers use fifteen apps on their smartphone regularly it is a challenge for marketers to ensure their branded app is listed in the consumer’s regularly used apps. To be listed in this regularly used apps, the branded app should be able to create value for consumers and enhance long-term engagement. If the app does not provide these two outcomes, it makes no sense for the consumer to use it regularly.

As mentioned consumers need to get value out of using a mobile app. According to (Gupta, 2013) apps can create value by applying five strategies. The first strategy is to add convenience (Gupta, 2013). Airplane companies for example add convenience in their apps by giving the customer the possibility to check-in through the app. By offering this possibility the convenience is increased because an app is often more easy and quicker than a website. Because the mobile app is downloaded and installed on the mobile, the app will be used and seen more often than a website. The second strategy marketers should apply is offering a unique value. The app should provide a certain

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Branded apps and brand loyalty

utility like the Nike+ Running app does (Heine, 2014). The Nike+ Running app creates value for the consumer by giving the opportunity to make a training program by setting certain running goals and tracking your running. Brands like Nike and Adidas use mobile apps to connect their products to the app, so consumers are able to set goals in the app and use certain products of the brand itself. Consumers should for example use the Nike sportwatch or Nike fuelband and this can be connected to the Nike+ Running app. In this way the offline and online platform are connected. For consumers a unique value is created by using this app that is able to connect the offline and online platform. The third strategy is providing social value. A mobile app can be connected to the social network of the users. The Nike+ Running app enables consumers to share their runs within their social network which increases the social value of the app. The fourth strategy is offering incentives. Coca Cola for example did a unique promotion in Brazil. Coca Cola installed special devices through which people could ‘Refill Happiness’. People had to install the Coca Cola app and hold it near the device, then 20 megabytes of free data were delivered through your phone. While uploading the megabytes an image was showed of a bottle of Coca Cola being filled. The fifth strategy is entertaining. According to Khalaf (2013) consumers spend 32% of their app time on gaming. A brand that has applied this fifth strategy is Red bull. Red bull has produced a range of game apps, for example Red Bull Racers which has been downloaded in the Google Play Store 500.000 times. Instead of using only traditional advertising, marketers should research the motives of their target group to produce an app that adds value for the consumer and that creates long-term engagement. To be able to add value, marketers first need to know how a mobile app differs from traditional marketing, especially the website platform. Then, they can use these advantages of a mobile app combined with the specific wishes of their target group, to produce a branded app.

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3. Mobile applications versus website platforms

Consumers use both websites and apps, but apps are used more often (Khalaf, 2014). There is a high amount of apps offered in the app stores, for example in the Apple App store there are 1.2 million apps available. This makes it however very difficult for newcomers to get noticed by potential customers. Before smartphones and apps were used heavily, consumers searched on websites for information or entertainment. Nowadays, smartphones are used by consumers daily and consumers use fifteen apps on a regular base (Gupta, 2013). Lots of mobile apps are also promoted

through websites and other channels. On consumers’ smartphones there is standard an

appstore placed which also encourages consumers to download apps as if it is part of the smartphone. As more and more people download apps, the use of websites becomes less.

3.1 The differences between mobile applications and websites

Apps are replacing partially the website usage, but the mobile app platform is different from the website platform. People can determine which apps are on their smartphone and therefore smartphones are often very personalized by the user. This causes that mobile services can achieve a higher personalization than a website can (Jung, 2014). The main difference between a website and a mobile app is that the information through a website can be found through browsing through the standard browser, while a mobile application is a software that has to be downloaded and installed before you can access the information and use the app. This means that a consumer has to do more effort by downloading the app, but according to Carl Howe, a mobile market analyst for the Yankee Group (NYtimes, Furchgott, 2009) this means the consumer is already half sold because it had to make this step. According to the

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mere-Mobile applications versus website platforms

presented on the mobile and the website is closed, consequently the brand exposure will be higher through the mobile app platform than on the website platform. By downloading and installing the app the consumer has the convenience that next time it only takes one click to go to the app, while browsing or typing in the URL takes more effort. Another difference is that a website can be updated without knowledge of the consumer, while an app can only be updated if the consumer gives permission. Some mobile apps can be used offline, which means that the consumer can use these apps when there is no internet available. This offers the consumers to acquire information even when they are offline. A mobile app is downloaded for repeated and frequent use, while a website is often more used for informing. The mobile app platform also provides a high level of interaction and transactions, and is thus not only displaying information.

According to ICM associate director Jamie Belnikoff (MarketingWeek, 2014) consumers that are browsing for products use more often a (mobile) website, while brand-loyal consumers download the certain app with the intention to buy through this channel. To increase sales, managers should optimize the buying platform of the (mobile) website, and/or encourage consumers to download the brand’s app. Before a branded app can be offered on the market it has to have approval from the app-store, while the website is not approval-based. Also, mobile apps should be adapted to every kind of device to make it widely available for consumers, while a website can be accessed by everyone not depending on the type of device. To be exposed on the

consumers’ smartphones, mobile apps should be downloaded by the consumers. For

marketers the challenge is therefore to catch consumers attention and keep those consumers interested by providing value.

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3.2 The unique advantages of mobile apps

A branded app should be able to provide a unique value different from the website of the brand. Mobile apps have the advantage of having more possibilities because of the capabilities of the smartphones, such as he accelerometer, touchscreen, camera and GPS. An example of a mobile app which uses GPS is the Foursquare app. The Foursquare app makes it more convenient to check-in at a certain venue by using the GPS, while on a website the user has to find the location through browsing through the website. A mobile app can offer unique benefits and thus create a better user experience and have value for consumers.

Mobile apps provide a unique platform by being able to track consumers’ location. This ability creates new marketing opportunities, like providing localized deals through the branded app. According to marketing director Simon Wallis “we are now able to look at what they are doing when they are out and about. If we could target the lunchtime occasion far more efficiently with people in and around the store, it could

open new opportunities by increasing ‘carry-out’ sales for us” (MarketingWeek, 2014).

This reflects the new unique advantages mobile apps can deliver the brand, but are also advantageous for the consumers. For marketers a mobile app has also certain

advantages because it can gather data about the consumer’s behaviour and preferences.

Marketers can use this data to provide unique offerings based on the consumers location, and can also personalize their offers to the consumer’s behaviour and preferences. Consequently, marketers are able to create personalized experiences through the mobile app, because it is part of the user’s device, therefore has more capabilities and it provides more information than websites can. Through the mobile app, the brand can send push-notifications. Because the mobile app is downloaded and installed by the consumers, push-notifications might not be perceived as annoying,

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Mobile applications versus website platforms

because it is a permission-based marketing (Barwise and Strong, 2002). Also, for consumers it can be an advantage to receive location-based discounts, which are provided by the branded app. The Foursquare app for example gives you special offers based on your location. The mobile app is a new platform that can be used by brands. Marketers have to find ways that make consumers willing to download and install their branded app. Also, the marketers have to offer the consumers a certain value to make consumers use the mobile app for a longer period of time. Gamification is a new trend, that might be a possibility to persuade consumers to download and install the branded app.

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4. Gamification

Deterding et al. (2011, p.2) define gamification as “the use of video game elements (rather than full-fledged games) to improve user experience and user engagement in non-game services and applications”. This definition is based upon the systematic understanding of gamification. Gamification is not comparable to entertainment or serious games, because it only uses elements from games, and users see gamification as gameful (Deterding et al., 2011). McDonalds for example had a monopoly game developed which you could play while you were at McDonalds; this is not gamification, but an actual game. Huotari and Hamari (2012) define gamification from a service marketing perspective and highlight the experiential nature of games and gamification,

instead of the systemic understanding. They define gamification as “a process of

enhancing a service with affordances for gameful experiences in order to support the

user’s overall value creation” (Huotari and Hamari (2012, p.19). According to Huotari

and Hamari (2012) this definition emphasizes the goal, rather than the methods, of gamification. They argue that “the definition of gamification (nor games) cannot be based on a set of methods or mechanics, but instead it has to be understood more broadly as a process in which the gamifier is attempting to increase the likelihood for the gameful experiences to emerge by imbuing the service with affordances for that purpose (be it badges or more implicit cues). The term affordance here can refer to any qualities of the service system that contributes (Greeno, 1994) to the emergence of gameful experience” (Huotari and Hamari, 2012, p.19). This definition suggests that the outcome of the game does not have to be successful and that it is about the experience itself (Huotari and Hamari, 2012).

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Gamification

4.1 Elements and mechanics in gamification

There are mechanics part of games that are used in gamification. These mechanics used in games are challenges, change, competition, cooperation, feedback, resource acquisition, rewards, transactions, turns and win states. Elements of games that are used by gamification are achievements, avatars, badges, boss fights, collections, combat, content unlocking, gifting, leader boards, levels, points, quests, social graph, teams and virtual goods (Werbach, 2014). Many of these elements can be part of the reward mechanism, like achievements, badges and boss fights (Werbach, 2014). Game elements should by tied together, but this does not necessarily mean it will be fun or engaging. The elements itself are not the game, but the mechanisms behind it. The reward mechanism plays a significant role in gamification.

4.2 Behaviourism in gamification

Behaviourism can be found in gamification. Behaviourism looks not what is inside the human head, but what people actually do. Gamification learns from observing behaviour, because people do not always act as theories predict due to certain biases. Also feedback loops are an important determinant in gamification as it explains that people experience or see feedback on their action and respond to that. When people are rewarded for an activity, the reward itself can be a positive consequence of the behaviour. This is called operant conditioning (Skinner, 1984). LinkedIn shows what percentage you have filled in from the profile and gives you feedback on how to get from 90% to for example 95%. Another important aspect of behaviourism is reinforcement. Rewards can be valued by consumers or sometimes be surprising, which causes dopamine to be released. This causes people to have a positive feeling, which according to the theory of classical conditioning (Pavlov, 1927) then is associated with

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the reward and thus the activity in itself. Here it is not the reward itself which is associated with the activity but the dopamine.

4.3 The levels of game design elements

Deterding et al. (2011) describe different levels of game design elements collected from previous research. The five levels of abstraction are described below and presented in table 1 from concrete to abstract. The first level is the game interface design patterns, (Chao, 2001) followed by game design patterns (Björk and Holopainen, 2005) and game mechanics (Taylor, 2009); the third level is design principles, heuristics

or ‘lenses’ (Schaffer, 2009); the fourth level is conceptual models of game design units

(Brathwaite and Schreiber 2008; Calvillo-Gàmez et al., 2010; Fullerton 2008; Hunicke et al., 2004) and the last most abstract level is game design methods and design processes (Belman and Flanagan, 2010; Fullerton, 2008). Not all elements that are found in games are part of gamification. The game elements should often be found in games, associated with games and play a significant role in gameplay (Deterding et al., 2011). As summarized by Deterding et al. (2011 p.13) gamification refers to “the use (rather the extension) of design (rather than based technology or other game-related practices) elements (rather than full-fledged games) characteristic for games (rather than play or playfulness) in non-game contexts (regardless of specific usage intentions, contexts, or media of implementation)”.

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Gamification

Table 1 “Levels of Game Design Elements” (Deterding et al., 2011, p.12)

Description Example

Game interface design patterns

Common, successful interaction design components and design solutions for a known problem in a context, including prototypical implementations Badge, leaderboard, level Game design Patterns and mechanics

Commonly reoccurring parts of the design of a game that concern gameplay

Time constraint, limited resources, turns Game design Principles and heuristics

Evaluative guidelines to approach a design problem or analyse a give design solution

Enduring play, clear goals, variety of game styles

Game models Conceptual models of the components of games or game experience

Challenge, fantasy, curiosity, game design atoms Game design methods

Game design-specific practices and processes

Playtesting, playcentric design, value conscious game design

4.4 Gamification, also about the gameful experience in itself

According to Huotari and Hamari (2012) marketers should watch out with creating gamification purely for sales because it should be about valuable experiences.

“One of the defining aspects of gameful experience is that it is voluntary and that it is

carried out by having intrinsic motivation. If, however, the designer attempts to direct

player/customers decision making in a way that it reduces the player/user’s free choice, then the design moves further away from what is in the core of a gameful experience.”

(Huotari and Hamari 2012, p. 19). Enhancement “entails that gamification describes a service system where a core service is enhanced by another one. From a marketing

perspective it is essential to make this distinction” (Huotari and Hamari, 2012, p.20)

According to the definition of Huotari and Hamari (2012) there is thus a difference between the core service and the enhancing service, but this is rather subjective as it is determined by the view of the customer. Huotari and Hamari (2012) describe four

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service provider 3) the customer him/herself 4) another customer. The enhanced service

is provided either by one of these four parties or by a combination of them.” (Huotari

and Hamari, 2012, p.20).

According to the definition of Huotari and Hamari (2012) Foursquare for example is not a gamified service in itself. Through the Foursquare app, users can check in at venues and earn point and sometimes badges. These check-ins can again be shared in the social network of the users. Next to that, users can gather badges by checking in on venues with certain tags. Another gamification element is that when a user has

checked in a certain venue more often he gets the title ‘major’. Other users can take

over this title by checking in more often at this certain place than the current major. Huotari and Hamari (2012) argue that Foursquare is not a gamified service in itself, but used to boost other services; namely the venues such as restaurants where the users have to check in. Foursquare has thus the potential to gamify as it enhances other services by using these rewards, goal setting etc. As examples of gamification Huotari and Hamari name the profile in LinkedIn which has a progress bar to show the user how much personal details there can still be filled in. According to Huotari and Hamari (2012, p.

20) “the enhancing service increased the perceived value for filling all details by

invoking progress-related psychological biases”. According to Huotari and Hamari (2012) an example of a gamified service with different gamification providers would be a clothing store whereby the enhancing service is the loyalty program offered through social network deals. The gamified service in this example, they argue, are the customers who check in at certain social network (Facebook) places and receive discounts by doing so. Last, the gamification provider is the clothing store itself, which is the core service provider and the social network site (Facebook).

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Gamification

Huotari and Hamari’s definition has some subjectivities and they also claim that games can be gamified. This does not match the definition of Deterding et al. (2012) and often in different articles it is emphasized that gamification is absolutely not a game, and gamification takes place in a non-game context. Because aspects of the definition of Huotari and Hamari (2012) are quite subjective and they also say a game can be gamified, in the research the definition of Deterding et al. (2011) will be used, but the gameful experience in itself, not necessarily the outcome has to be successful (Huotari and Hamari, 2012).

4.5 Cognitivism in gamification

Cognitivism looks at what is inside of the human’s, i.e. people’s mental states.

People should be motivated to do a certain activity. People are motivated when they are moved to do something, which does not necessarily mean they know why they choose one over another. In the self-determination theory there is a distinction made between different kinds of motivation that are based upon different goals or reasons that cause an action, namely intrinsic and extrinsic motivation. Ryan and Deci (2000, p. 56) define

intrinsic motivation as “the doing of an activity for its inherent satisfactions rather than for some separable consequence”. According to the article of Groh (2012) gamification

is connected to the self-determination theory. “When a person is intrinsically motivated he or she is moved to act for the fun or challenge entailed rather than because of external prods, pressures, or rewards” (Ryan and Deci, 2000, p.56). As mentioned before, game elements are not the game itself.

Ryan and Deci (2000, p.60) define extrinsic motivation as “a construct that

pertains whenever an activity is done in order to attain some separable outcome. Extrinsic motivation thus contrasts with intrinsic motivation, which refers to doing an activity simply for the enjoyment of the activity itself, rather than its instrumental

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value.” Extrinsic motivation has two dimensions. The first dimension is identified regulation which “refers to relatively autonomous behaviours that occur when

individuals come to value a certain activity as important to their personal goals” (Standage, Treasure, Duda and Prusak, 2003, p.22). The other dimension of extrinsic motivation is external regulation which “refers to non-autonomous behaviours that are underpinned and dictated by externally controlled factors such as reward payment, or threats” (Standage et al., 2003, p.22). People can also be amotivated, which is the least self-determined type of motivation. Amotivation occurs when “an individual does not perceive contingencies between his or her behaviour and subsequent outcomes, lacks

competence, or places no value on an activity” (Standage et al., 2003, p.22). This means

that if people are amotivated they are neither intrinsically nor extrinsically motivated. Zichermann (2011), the founder of Badgeville, describes four characteristics of extrinsic motivators, named the SAPS framework. SAPS stands for status, access, power and stuff. This reward system is named in order of influence. Accordingly people value status more than stuff. This is consistent with Maslow’s hierarchy of needs (Maslow, 1943). Gamification elements are often extrinsic motivators, such as badges and points. People, who were formally intrinsically motivated, can become demotivated caused by these extrinsic motivators. An example of this is the article ‘Fine is a price’ of Gneezy and Rustichini (2000). A day care often had parents who were too late to pick up their children. They thought by implementing that parents had to pay a fee when they were too late to pick up their child from day care, they would have less parents that would be too late. The opposite happened; parents were not intrinsically motivated to come on time because the day care employees got paid for the over hours. Parents’ intrinsic motivation got replaced by extrinsic rewards and the rate of parents arriving too late went up.

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Gamification

Deci et al. (1999) explains that rewards types do matter. A tangible reward is for example demotivating. An unexpected reward causes that the activity was still intrinsic, because they did not know they would receive an extrinsic reward. Though the reward system is an important game element used in gamification, rewards should not only be focused on the outcome, thus the reward (Werbach, 2014). A reward should not have a performance contingent, which is based on the achievement, but just seen as a marker of performance. Michael Wu (2014) argues that extrinsic rewards can cause intrinsic long term value for a consumer. This means that the people get intrinsically motivated by the activity itself and are no longer motivated by the extrinsic motivators. He argues that gamification does not need to be sustainable in the long term as gamification can be short term and cause the consumers to create value. If consumers cannot get value out of the game experience itself, a value should be offered to keep consumers motivated. Gamification uses video game elements (rather than full-fledged games) to improve user experience and user engagement in non-game services and applications. This means that in the end your product needs to provide a certain long term value to the

consumer. “Extrinsically motivated behaviours can vary in the extent to which they

represent self-determination. Internalization and integration are the processes through which extrinsically motivated behaviours become more self-determined” (Ryan and Deci 2000, p.65).

The self-determination theory has a mini-theory named cognitive evaluation theory (Deci and Ryan 1985; Ryan and Deci 2000). This theory describes three needs which are essential for intrinsic motivation, namely competence, autonomy and relatedness (Deci and Ryan 1985). “Social contextual conditions that support one’s feelings of competence, autonomy, and relatedness are the basis for one maintaining intrinsic motivation and becoming more self-determined with respect to extrinsic

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motivation” (Ryan and Deci, 2000, p.65). “Autonomy refers to being perceived origin or source of one’s own behaviour” (Ryan, 2004, p.8). A person should be able to

accomplish something. Examples of autonomy are profiles, avatars, macros, configurable interface, alternative activities, privacy control, notification control (Aparicio et al., 2012). “Competence refers to feeling effective in one’s ongoing interactions with the social environment and experiencing opportunities to exercise and

express one’s capacities” (Ryan, 2004, p.7). A person should for example have different

choices in a mobile app, which makes the experience personalized and creates a feeling of autonomy. Examples of competence are positive feedback, optimal challenge, progressive information, intuitive controls, points, levels, leader boards (Aparicio et al., 2012). “Relatedness refers to feeling connected to others, to caring for and being cared for by those others, to having a sense of belongingness both with other individuals and

with one’s community (Ryan, 2004, p.7). Examples of relatedness are groups,

messages, blogs, connection to social networks, chat (Aparicio et al., 2012).

Researchers see the importance of the commercial context of gamification (Deterding et al., 2011; Huotari & Hamari, 2012). Managers are developing mobile apps for the brand and are trying to maximize the benefit of creating a branded app. The mobile application Fitocracy is an example that contains all three needs of intrinsic motivation and is a gamified mobile application. Fitocracy is a fitness application in which you play levels and earn points by doing work outs. First, you can accomplish something because you can level up, which refers to competence. Second, you can make your own choices in deciding what exercises to do and get points for this. This is the autonomy factor in the mobile app. Third you can be part of a community of Fitocrats, which refers to relatedness. Extrinsic motivators can be a steppingstone to get consumers intrinsically motivated.

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Gamification

4.6 The gamification design framework

According to the Gamification Design (D6) framework (Werbach and Hunter, 2012), there are six steps to develop a gamification system. Marketers should in a first step identify what their business objectives are to be able to create a mobile app that meets their demands. Second, marketers should also find out what they want to accomplish regarding the behavioural aspect of consumers. As not all targets of marketers are the same, marketers and researchers should as the third step get

information about the ‘players’, like demographics and psychographics. The fourth step

is that marketers should devise activity loops in gamified systems. The activity loops consist of two kinds of loops, namely the engagement loops and the progression loops. The engagement loop is on a micro level and the loop is continuously going. Starting from motivation there are certain motivators available which motivate someone to take a certain action. This action is followed by feedback given in for example points and this can become the motivator to take action again. In the Foursquare app this loop can be seen. Users of the Foursquare app check-in at a certain venue, and get points for this as feedback of their action. The points in itself might motivate the users to also check-in at other venues through the Foursquare app. If your application is gamified well, the loop keeps on moving, so that each item reinforces the other item. The progression loop is on a macro level. The loop consists of little goals that you should pass to get to the bigger goal. The user keeps motivated by the little goals and in the end the ultimate goal. The user makes progress throughout the system, levelling up is an example of this. Marketers should also not forget that the mobile application that is gamified should still be fun. Adding all kinds of game elements does not necessarily make it fun. The fifth step is thus to not forget the fun. Things that are found fun are winning, problem-solving, exploring, chilling, teamwork, recognition, triumphing, collecting,

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surprise, imagination, sharing, role playing, customization and goofing off (Werbach, 2014). Lazzaro (2004), president of XEODesign, describes four keys that produce fun. The first is easy fun, which is casual fun, just because it is enjoyable. The second key is hard fun, this is about challenges, problems and overcoming obstacles. The fun about it is that people can accomplish something. The third key is people fun, this is about the fun of interacting with others. The fourth key is serious fun, this is fun that is meaningful to for example the people’s family or world. The sixth step is to deploy the appropriate tools, so thinking about which tools and techniques to use and choose the ones that are most fitting to what you want to achieve. If these six steps are followed, a gamified system is developed.

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Hypotheses and conceptual framework

5. Hypotheses and conceptual framework

This study researches how gamification influences brand loyalty in branded apps and branded websites. In the previous chapters a description is given about the influence of branded apps and its implications. The differences between mobile apps and website platforms are described and also the concept of gamification is defined. In this chapter hypotheses are set and based upon the discussed theories and concepts. In the end of this chapter a conceptual framework is presented, which entails an overview of the hypotheses and variables. Through testing these hypotheses and therefore the conceptual framework an answer can be given on how gamification influences brand loyalty in branded mobile apps.

5.1 Relation between Gupta’s strategies and gamification

Chaudhuri and Holbrook (2001) describe two dimensions of brand loyalty

namely purchase loyalty and attitudinal loyalty. Purchase loyalty is “the willingness of

the average consumer to repurchase the brand”. (Chaudhuri and Holbrook, 2001, p.83).

And “attitudinal loyalty is the level of commitment of the average consumer toward the brand” (Chaudhuri and Holbrook, 2001, p.83). Bellman et al. (2011) argue that branded

apps have a positive effect on the attitude towards the brand and also increase purchase intention. Gamification is defined by different academics and is used by managers to influence consumers. In this study the following definition will be used, which is a combination of both Deterding et al. (2011) and Huotari and Hamari (2012). Gamification is defined as “the use of video game elements (rather than full-fledged games) to improve user experience and user engagement in non-game services and

applications” (Deterding et al. 2011, p.2). Moreover, the gameful experience in itself,

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These strategies are related to the key elements of gamification namely user experience and user engagement. The strategies examined by Gupta (2013) are focusing on improving user experience and user engagement. The first strategy is adding convenience to a mobile app. If convenience is added to a mobile app, the user experience will improve because consumers are able to use the app more easily. The second strategy is adding value, which relates to improving the element ‘user engagement’. When a mobile app provides a certain value, consumers get more engaged with it because they are emotionally attached to it. The third strategy is providing social value. Gamification uses for example social rewards or rankings where you can compare yourself to others. If there is a social value provided in the mobile app, the user engagement will therefore be higher because they feel connected to it by the social environment. The fourth strategy is especially related to gamification, namely offering incentives. Incentives are often used in games, and are elements part of gamification. According to Gupta (2013) offering incentives can create value for consumers in a mobile app, therefore it is expected that this game element will offer value. Also if value is created by offering incentives, the user engagement will be high. The last strategy is entertaining, which also refers to gamification. Gamification uses game elements, which are entertaining, and therefore offers value which can cause the user experience and user engagement to improve. These relations between Gupta’s strategies and gamification offer foundation for the hypotheses and the conceptual framework.

It is thus expected that gamification is able to create value for consumers. According to Bellman et al. (2011) branded apps have a positive effect on the attitude towards the brand and also increase purchase intention. Creating long enduring effects such as purchase loyalty and attitudinal loyalty are important for managers because they have certain advantages. It is expected that purchase loyalty will become higher when

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gamification is used in a branded app or website compared to when gamification is absent. This is because it is expected that if gamification is used in a branded app or website, this creates value for consumers and they get more involved. This causes them to be more willing to purchase from that brand and therefore in the long term become more purchase loyal. By using gamification, value is therefore created according to

Gupta’s strategies, which means it can be expected that gamification can increase

purchase loyalty.

The same applies for attitudinal loyalty. It is expected that gamification elements will create value for the consumer and will create user involvement. The consumers are getting more value which will cause a positive attitude towards the brand because of the gamification elements that are used in the branded app or website. The advantages of

using gamification resemble with Gupta’s strategies and thus are expected to be able to

create value and therefore a positive attitude towards the brand. This causes gamification elements to possibly make a consumer in the long term more attitudinal loyal. The consumers are thus influenced regarding their attitude by gamification elements used in the branded app and website. It is therefore expected that if gamification is present the change in purchase loyalty will be higher compared to when gamification is absent. This is expected for both types of mediums.

.

H1b: The change in attitudinal loyalty is higher when branded apps and websites contain gamification elements compared to when these

are absent.

H1a: The change in purchase loyalty is higher when branded apps and websites contain gamification elements compared to when these are

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This study aims to research the influence of gamification on attitudinal and purchase loyalty in the context of branded apps and websites. As mentioned before in chapter 3, there are differences between branded apps and branded websites, such as its usage, options, etcetera. Branded apps have different advantages and can have a positive effect on brand loyalty. According to Bellman et al. (2011) branded apps have a positive effect on the purchase intention. The effect of gamification is therefore measured in both contexts as the branded app or website itself could influence the change in brand loyalty. This enables it to control for the influence of using a branded app and website on the change in brand loyalty. Therefore the main effect of gamification can be estimated more reliably. The advantages of branded apps compared to branded websites

are also in line with Gupta’s strategies. This would mean that branded apps are expected

to increase purchase loyalty more than branded websites. Therefore, it is expected that when participants used a branded app the positive change in purchase loyalty will be higher compared to when they used a branded website.

The differences between branded apps and branded websites also influence attitudinal loyalty. Bellman et al. (2011) researched that branded apps also increase the consumers’ attitude towards the brand. It is therefore expected that when branded apps are used attitudinal loyalty will be higher compared to the conditions in which branded websites are used. Consequently, branded apps are expected to increase the change in attitudinal loyalty more than branded websites.

H2b: The change in attitudinal loyalty is higher for branded apps than for branded websites.

H2a: The change in purchase loyalty is higher for branded apps than for branded websites.

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Groh (2012) and Kankanhalli et al. (2012) state that efficient gamification should entail intrinsic motivation to cause long enduring effects. Intrinsic motivation should be able to create long during effects, while extrinsic motivation might be able to cause less effect. Therefore it is expected that gamification influences the change in brand loyalty, and that this effect is stronger when intrinsic or extrinsic motivation increases. Intrinsic and extrinsic motivation therefore both moderate the relation between gamification and brand loyalty. Brand loyalty has two dimensions, namely purchase loyalty and attitudinal loyalty. The following hypothesis concerns the effect of gamification elements on purchase loyalty in a branded app and website context, which is explained before. It is expected that gamification influences the change in purchase loyalty, and that this effect is stronger for higher values of intrinsic or extrinsic motivation. As mentioned by Groh (2012) and Kankanhalli et al. (2012) if motivation increases this effect should be even stronger on the long during effect, namely purchase loyalty.

The second part of hypothesis three concerns the effect of gamification elements on attitudinal loyalty in a branded app and website context. It is expected that gamification influences the change in brand loyalty, and that this effect becomes stronger for higher values of intrinsic motivation. This means that if gamification is used, its effect on attitudinal loyalty will increase when intrinsic motivation increases. If people are motivated to use the branded app or website their attitude towards the brand might change as they use it more often and enjoy using the branded app or website.

H3b: The effect of gamification on attitudinal loyalty becomes stronger for higher values of intrinsic motivation

H3a: The effect of gamification on purchase loyalty becomes stronger for higher values of intrinsic motivation

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The next part of hypothesis 3 concerns the effect of gamification elements on purchase loyalty and how this effect is moderated by extrinsic motivation. As mentioned before, motivation is important for gamification (Groh, 2012; Kankanhalli et al., 2012). It is expected that if gamification is used in a branded app or website context it influences the change in purchase loyalty and this effect is stronger for higher values of extrinsic motivation. Gamification uses elements such as points and badges which are extrinsic rewards and can therefore cause consumers to be motivated to use the branded app or website more often and possibly become more purchase loyal. It is hypothesized that extrinsic motivation moderates the relation between gamification and purchase loyalty. Therefore it is expected that for higher values of extrinsic motivation the effect of gamification on purchase loyalty will become stronger.

The last part of hypothesis three concerns the moderating effect of extrinsic motivation on the influence of gamification elements on attitudinal loyalty. The influence of gamification on the change in attitudinal loyalty is expected to become stronger for higher values of extrinsic motivation. Gamification uses elements such as points and badges which are extrinsic rewards and can therefore cause consumers to be motivated to use the branded app or website more often and possibly become more attitudinal loyal.

H3c: The effect of gamification on purchase loyalty becomes stronger for higher values of extrinsic motivation

H3d: The effect of gamification on attitudinal loyalty becomes stronger for higher values of extrinsic motivation

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Gamification can possibly create more value in a branded app than in a branded website, due to the greater availability of options that mobile apps offer. This would mean that depending on whether consumers used a branded app or a branded website there can be a difference in the effectiveness of gamification on attitudinal and purchase loyalty. Therefore the medium can have a moderating role on the effect of gamification on brand loyalty. If more value can be created in a branded app than in a branded website when using gamification, the change in purchase loyalty will also be higher. Therefore, it is expected that when participants used a branded app the effect of gamification on purchase loyalty will is stronger compared to when they used a branded website.

Mobile apps have a greater amount of options which can be used for more intriguing gamification elements. Due to the greater availability of options, gamification can therefore possibly create more value in a branded app than in a branded website. Branded apps could therefore have a larger effect on the relation between gamification and attitudinal loyalty than branded websites. When more value is created in a branded app than in a branded website because of using gamification, the change in attitudinal loyalty will also increase more when a gamified branded app is used compared to a gamified branded website. Consequently, it is expected that when participants used a branded app the effect of gamification on attitudinal loyalty is stronger compared to when they used a branded website.

H4a: The effect of gamification on purchase loyalty is stronger when participants used a branded app compared to when they used a

branded website.

H4b: The effect of gamification on attitudinal loyalty is stronger when participants used a branded app compared to when they used a

The influence of gamification on attitudinal and purchase loyalty in the context of branded apps and websites

Master’s Thesis