byDIOMEDE RICHARD

HONG QIGORI DAWODU

DEFINITION THE PROSUMERS:Prosumer is a

portmanteau formed by contracting either the word professional or producer with the word consumer. The term has taken on multiple conflicting meanings: the business sector sees the prosumer (professional–consumer) as a market segment

DEFINITION whereas economists see the prosumer

(producer–consumer) as having greater independence from the mainstream economy. It can also be thought of as converse to the consumer with a passive role, denoting an active role as the individual gets more involved in the process.

MARKETSThe prosumers see markets as:“conversations" with the new economy moving

from passive consumers ... to active prosumers. For instance, Amazon.com emerged as an ecommerce leader partially due to its ability to construct customer relations as conversations rather than simple, one-time sales.

MARKETS Amazon supports exchange of information

among customers; it provides spaces for customers to add to the site, in the form of reviews(A review is an evaluation of a publication, such as a movie, video game, musical composition, book, or a piece of hardware like a car, appliance, or computer. )

MODEL OF PROSUMPTIONThe chapter described a model of

prosumption where customers participate in creation of product in active and ongoing way.

As in Second Life, the consumer co-innovates and coproduces the products they consume.

. Customers can self organize to create their own products

The most advanced users in facts no longer wait

MODEL OF PROSUMPTIONUser no longer wait for an invitation to turn a

product into a platform for their innovations.Users or customers can form their websites

and communicate online to share product-related information , collaborate and customized project, engage in e-commerce and swap tips, tools and products hacks.

MODEL OF PROSUMPTIONWorking in the prosumer community for

competitive advantage.(Second life originator Linden Labs has broken most of the conventional rules for building a multiplier video game and set the standard for customer innovation in all industries.)

Prosumers think that they deserve the right to operate freely as customer-driven economy while big corporations think that they should be some sanctions and regulations

CUSTOMERS AS CO-INNOVATIONSEpisodes of users driven creativity in history

of invention.Great importance hobbyists and amateur

creators play in advancing technologyMost companies still consider innovation and

amateur creativity as less representative in their core markets.

CUSTOMERS AS CO-INNOVATORSSmart companies must reach out to involve

customer and lead users directly in their product development process.

However customer innovation is going self-serve with the rise of prosumer communities.

Customers Co-Innovation Goes Self-Serve David Pescovitz, senior editor of MAKE( a

magazine, a magazine that is devoted to do it yourself innovations) states that:

-------the phenomena of DO IT YOUSELF has been spreading widely because innovators don’t have to wait for the next electronics meeting to express their ideas. With today’s technology it can be done anytime anywhere.

-----------People get big thrills from hacking a product, making something unique, showing it to their friends, and having other people adopt their ideas.

Customer as Co-innovators goes Self-Serve------The Lego Corporation, best known for

making little interlocking plastic bricks has had a dramatic experience with prosumers.

------In fact, Lego had one of earliest and most vibrant prosumers communities that formed around it.

Customer as Co-innovators goes Self-Serve-----when many hobbyists sent letters of

suggestions on how to enhance the products, Lego threatened to file a lawsuit

----- Lego’s policy backfired and users rebelled because they felt there ideas are not heard.

Customer as Co-innovators goes Self-Serve------However, Lego finally came around and

went as far as developing a free version of software to get users contributions on improving their new products.

http://mindstorms.lego.com/eng/Bangkok_dest/Default.aspx

------The web site used by innovative-users to participate in Legos product developments.

Customer as Co-innovators goes Self-Serve- It has become evident that today’s world is

built on massive and collective collaboration in which groups of users and producers pull together to create the next big thing.

- Lego has built success and innovation that will last for years to come because of its early awareness of the importance of its user’s ideas and their vibrant source of innovation in the long run.

The Prosumption Dilemma: Control versus Customer Hacking

Customers get what they wantCompanies get free R&D

Apple’s iPodThe original use: portable music playerWhen customers hack it: Why not transform

the iPod into a general-purpose wearable computer that has everything: portable music player, expanded memory, video games, PDA and Podzilla

What this means to AppleThreatening of viability of its current

business modelFuture product strategy Less money spent in their stores: if users can

reengineering the product to add a unlimited array of new features and capabilities, there will be less incentive for customers to spend more money at Apple store to upgrade to new iPod versions.

Customer Hacking and Home-Brew ApplicationsWhy hack: extend the capabilities of the

media playerHome-Brewed apps are applications made by

users and not the manufacturerExample: Sony’s Playstation Portable (PSP)The hacks: turned the PSP into a streaming

music player, a WiFi device and a web browser

Sony’s ResponseThey take extra steps to retroactively lock up

their platformHow they do it: before you can play a game

or use their software, you have to upgrade the PSP’s firmware (the OS that runs the PSP

What happens next: hackers crack the new firmware

Sony’s response: they don’t want customers to void the PSP’s warranty, so don’t hack

Embracing Consumer PowerThe Prosumption dilemma: A company that

gives its customers free reign to hack, risks cannibalizing its business model and losing control of its platform

Hackers are a minority, but grow in number at a rapid pace

Customer hacking will never die and companies have no real control over it

We are the media

Citizen journalism and consumer controlled media

People shift from consumer to contributor and creator

Report of news in one surrounding using camera phone

Use of YouTube as distribution hub to publish, play and share video clip, home movies etc

Slashdot where people upload news items of interest to global audience of techies and programmers. The value of news is determined by rating of readers and moderator of the site

Uses a top down editorial structure

Diggs- prodigy or slash dot—users have equal right unlike Slashdot

Members get credit for being the first to find stories

Article with the most digs are promoted to the homepage

Mainstream editors look at site like Diggs and the worry that second-rate stories will make it to the front page

 

Journalist can also post their stories and the community decides which stories are newsworthy

Democratizing the media : media for the people by the people

Interaction of mainstream outlet with audience accentuate positive attributes such as balance, fairness and accuracy, while making the media experience more dynamic

Media organizations that fail to use the democratized media will remain less competitive.

Prosumption is one of the a powerful engine of change and innovation that business world has ever seen

Harnessing prosumer communitiesMore than customizationTrue prosumption entails deeper and earlier

engagement of consumers in design processsing controlCustomer will increase treat your product as a

platform for their own innovation whether you grant them permission or not.

You need to stay current and ahead of customers else they would invent around you

ustomer tool kits and context orchestrationMake your product modular, reconfigurable and editable

Set the context for customer innovation and collaborationBecoming peerWith prosumption, your business will eventually create

innovation ecosystems and not finished product.

Companies will participate in this ecosystem (e.g. IBM participation in open source)

As prosumption develop, treat customers like peers and not patron

haring the fruitsWhen customers get involved, they share

their ownership and fruit of creation.You will be able to count on dynamic

ecosystem for growth and innovation

Future of prosumptionCustomers want a genuine role in designing the product of the future.Customers will create the product in their own term, in their own network and for their ends.

Product that don’t invite customers will participation will be anathemaFor you to be around in the next decade, your organization will need to find ways to join lead prosumers communities.

Customers don’t care whether their activities make you more money, they just want superior product and experience, and perhaps cut of the revenue

Prosumer: people who used the good and services have input into their product design and production is not entirely new

Thank you!