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

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Consumer cocreation in the

New Product Development Process

Lena Schmatzer

May 7th, 2014

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2

3

4

5

6 Consumer cocrea,on – a conceptual framework

Consumer mo,va,on drivers

Outcomes of cocrea,on

mini – Case Studies

Conclusion

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The importance of NPD

NPD = N

ew

P

roduct

D

evelopme

nt

One of the

key processes

in Marke

ting

A succe

ssful ma

rketing

strategy

consists

of:

ü

 

The ide

ntificatio

n of opp

ortunitie

s

ü

 

New pr

oduct d

evelopm

ent

ü

 

Custome

r attract

ion

ü

 

Custome

r retenti

on & loya

lty build

ing

ü

 

Order f

ulfillmen

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Consumer cocreation as a promising future

aspect in NPD

1. Underlying concepts 2. _{a conceptual framework}Consumer cocreation – 3. Consumer motivation _drivers 4. Outcomes of cocreation 5. Mini – Case Studies 6. Conclusion

“

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)

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)

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The shift from B2B to B2C

B2C

Highly attractive and

equally challenging in the

cocreation process of

NPD

Distance between firms

and consumers à much

larger effort regarding

consumer integration

B2B

Most prevailing studies

Distance between

firms

and

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Consumer cocreation – a conceptual framework

(Hoyer et al. 2010)

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Consumer motivation drivers

Hoyer et al. identified

four groups

among consumers who are not only able

but also

willing to engage in cocreation process

.

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.

Emergent consumer

: possess the

capability to discover, and to a certain

extent set trends

Lead users

:

recognize possible market trends before others do

; lead users are

able to find solutions to prevailing product gaps and needs

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

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Financial factors

Also referred to as

economic drives

(Etgar 2008)

and

economic rewards

(Lusch et al. 1992)

consumers may obtain the intellectual property

consumers receive monetary prizes or firms offer profit sharing models in

case of the engagement of 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

appear to be the

most evident

and

instinctive factors

with regard to

the decision whether or not to engage in cocreation activities

.

there are also

many consumers

that

are not motivated by economic

rewards

at all and

are willing to freely share their ideas

and

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Social factors

Also referred to as

social beneﬁts

(Etgar 2008)

Recognition by firms, peer customers and product users

Online interaction

develops

strong social

as well as

interpersonal

relationships

Social networks

and

cocreation communities

à

creation of social contact

values

Seeking of status and self esteem

= strong motivational force

With reference to the seeking of status and social esteem the

recognition may be a great form that satisfies this specific desire.

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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

„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)

consumers are able to

acquire enormous cognitive benefits

via the

exchange of information, ideas and general inputs from peers

in the

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Psychological factors

Also referred to as

psychological drives

(Etgar 2008)

psychological rewards

(Lusch et al. 1992)

Decisive factor about participating

in cocreation activities

or not

Consumers

generally participate in cocreation activities because they

want to realize specific objectives that are strongly linked to

consumer values

.

extrinsic values

rather imply values such as excellence, satisfaction of the

need of self expression and uniqueness

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

“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

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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

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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

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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.

Mini – Case Studies

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

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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.

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)

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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.

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Than

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Internet sources

•  Co-Creation in New Product Development: http://vimeo.com/28986632, as of January 5th_{, 2014}

•  Crossroad Innovation: http://www.crossroadinnovation.com/cocreation/companies, as of January 5th_{, 2014}

•  HYVE: https://www.hyve.de/, as of January 5th_{, 2014}

•  Ideaconnection: http://www.ideaconnection.com/open-innovation-success/Nivea-Co-Creates-with-the-Crowd-to-Eliminate-Stain-Pr-00365.html, as of January 6th_{, 2014}

•  Kotler Marketing: http://www.kotlermarketing.com/phil_questions.shtml, as of December 31st_{, 2013}

•  McDonald’s – Mein Burger: http://vimeo.com/55641945, as of January 6th_{, 2014}

•  People’s Lab: http://peopleslab.mslgroup.com/peoplesinsights/peoples-insights-volume-1-issue-48-lego-cuusoo/, as of January 6th_{, 2014 and http://}

peopleslab.mslgroup.com/peoplesinsights/5-co-creation-communities-ten-frontiers-for-the-future-of-engagement/ , as of January 6th_{, 2014}

•  Threadless: http://www.threadless.com, as of January 5th_{, 2014}

•  Visioncritical:http://www.visioncritical.com/blog/5-examples-how-brands-are-using-co-creation, as of January 5th_{, 2014} Papers

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