ebusiness Class 2014 Consumer cocreation in the New Product Development Process Lena Schmatzer May 7th, 2014

Transcription

1 ebusiness Class 2014 Consumer cocreation in the New Product Development Process Lena Schmatzer May 7th, 2014

2 Underlying concepts Consumer cocrea,on a conceptual framework Consumer mo,va,on Outcomes of cocrea,on mini Case Studies Conclusion

3 The importance of NPD NPD = New Product Development One of the key processes in Marketing A successful marketing strategy consists of: ü The identification of opportunities ü New product development ü Customer attraction ü Customer retention & loyalty building ü Order fulfillment 3

4 Consumer cocreation as a promising future aspect in NPD value can only be created with and determined by the user in the consumption process and through use or what is referred to as value-in use. (Lusch et al. 2006) Cocreation Coproduction Consumer empowerment means that consumers want to not only influence but also actively participate in the process of NPD as well as in its value creation. (Hoyer et al. 2010, van Doorn et al. 2010) Consumer cocreation is a collaborative NPD activity, in which consumers actively contribute and select various elements of a new product offering. (Hoyer et al. 2010) 4

5 The shift from B2B to B2C B2B Most prevailing studies Distance between firms and firms B2C Highly attractive and equally challenging in the cocreation process of NPD Distance between firms and consumers à much larger effort regarding consumer integration 5

6 Consumer cocreation (Hoyer et al. 2010) * Degree of cocreation: scope and intensity of cocreation activities across the four development stages. 6

7 Consumer motivation Hoyer et al. identified four groups among consumers who are not only able but also willing to engage in cocreation process. Innovators: the earliest to adopt new products; known as extreme users; developers due to their know-how and ability to contribute their ideas in an effective and functional way Lead users: recognize possible market trends before others do; lead users are able to find solutions to prevailing product gaps and needs Emergent consumer: possess the capability to discover, and to a certain extent set trends Market ravens: are able to influence other customers purchase decisions. This results from an enormous know-how about the marketplace and a widespread set of information about products and specific brands that market mavens are willing to share with other consumers. 7

8 Financial factors 8

9 Financial factors Also referred to as economic drives (Etgar 2008) and economic rewards (Lusch et al. 1992) appear to be the most evident and instinctive factors with regard to the decision whether or not to engage in cocreation activities. Can be classified into two categories that both represent monetary or financial aspects in association with a target outcome of an exchange process consumers receive monetary prizes or firms offer profit sharing models in case of the engagement of cocreation activities. consumers may obtain the intellectual property there are also many consumers that are not motivated by economic rewards at all and are willing to freely share their ideas and innovation concepts. 9

10 Social factors 10

11 Social factors Also referred to as social benefits (Etgar 2008) Seeking of status and self esteem = strong motivational force Social networks and cocreation communities à creation of social contact values Online interaction develops strong social as well as interpersonal relationships Recognition by firms, peer customers and product users With reference to the seeking of status and social esteem the recognition may be a great form that satisfies this specific desire. 11

12 Technological factors 12

13 Technological factors consumers motivation is driven by the achievement of specific technology know-how that can be gained in forums and groups that actively participate in the new product development process consumers are able to acquire enormous cognitive benefits via the exchange of information, ideas and general inputs from peers in the respective community the major contribution of technological changes is their ability to allow rapid and low cost interactions between consumers and suppliers and among consumers themselves leading to tremendous reduction in the economic costs, time and effort required for consumer participation in value creation. the advent of the Internet offers true interactivity with the consumer, customer-specific, situational personalization, and the opportunity for real-time adjustments to a firm s offering to customers, as well as changes in consumer expectations regarding firm service strategies that flow from these developments. (Etgar 2008, p. 99 f) 13

14 Psychological factors 14

15 Psychological factors Also referred to as psychological drives (Etgar 2008) psychological rewards (Lusch et al. 1992) Consumers generally participate in cocreation activities because they want to realize specific objectives that are strongly linked to consumer values. Decisive factor about participating in cocreation activities or not intrinsic values strongly refer to the engagement in cocreation activities because of the variation from their daily life and the experience for its own sake extrinsic values rather imply values such as excellence, satisfaction of the need of self expression and uniqueness the degree of satisfaction, enjoyment, gratification, or happiness that is associated with internal or external ex- change. (Lusch et al. 1992) especially non-economic rewards have high potential to influence the outcomes of exchanges 15

16 RISK? Is hard to classify into one of the four categories Consumers may decide to engage in cocrea3on projects in order to reduce their risk related to the purchase of inappropriate products. Through their par3cipa3on and input they can ac3vely help avoiding these risks. 16

17 Outcomes of cocreation Firms can reduce their risk due to the valuable input by consumers Consumers shape the new products according to their specific needs Products become more effective Product-related and personal relationships can be developed Reduced control by firms Management tasks might become increasingly complex The process of selecting the best consumer idea out of a huge amount of delivered ideas is very challenging 17

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20 Mini Case Studies LEGO is one of the most prominent examples of consumer cocreation companies. late 90 s: LEGO had to fight many difficulties, one being that the product development became increasingly more complex. 2003: new CEO was announced, who tremendously changed the product development strategy towards actively involving consumers in the new product development process; he thought of users being designers in the product innovation approach, which quickly became a focus point of LEGO s strategy. By working with an open innovation and consumer cocreation approach LEGO s business has been successfully transformed. ü The customer motivation can be clearly attributed to social factors. LEGO = play well (leg godt in Danish) ü Regular reviews, assessments and most importantly launching the best ideas as a new product, consumers are strongly motivated by psychological aspects. ü The economic aspect must not be overseen. Consumers, whose idea has been chosen for a new product launch earn 1% of the total net sales of the specific product. 20

21 Mini Case Studies Threadless.com is a platform that invites people to design and submit t-shirt designs > 2.3 million community members Threadless succeeded in making a significant impact. Remarkably, they won $ 7.1 million in awards. earn fame and fortune well-developed and very strong community that arose over time Threadless is a creative community that makes, supports, and buys great art. (Threadless.com, as of January 6th, 2014) ü At hand of Threadless.com a good example can be drawn for a strong financial rewarding scheme. ü Obviously it also contains strong social aspects, referring especially to the well-developed community ü However, it states a good example for a successful consumer cocreation that was mainly driven by economic motivational factors. 21

22 Conclusion Companies have to deal with a greater demand, faster changing consumer needs and subsequently a strong product development in order to stay competitive. Due to these challenges companies more and more start to involve the consumers in order to develop products that best meet the consumers needs. Even though a strong emphasis is put on the model of consumer cocreation, and the most decisive motivational factors that are indispensable for the consumers engagement it must not be overseen that cocreation doesn t end with the product launch. Social media and the established massive communities are very often used as an extremely efficient tool when it comes to market and advertise the product. 22

23 Thank you for your aben,on!

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