Post-Purchase Co-Creation: Consumer Segmentation in Consumer-Driven Collaborative Product Development

Keith Marion Smith, Northeastern University

John Hulland, University of Georgia

Andrew Stephen, University of Oxford

Sharing Control of Marketingwith Customers• Increasing customer influence on

firm marketing efforts

• Customer role in product advertising, brand management,and product purchase (Kozinets et al, 2010; Thompson & Sinha, 2008)

• Facilitated by proliferation of online communities and social media

• Product Co-Creation

• Collaborative product development activity in which customers actively contribute and/or select the content of a new product (O’Hern & Rindfleisch, 2010)

Customer Participation in Product Development• Open source product

development

• Customer selected product choices

• Products defined andcreated primarily bycustomers

• Post-purchase Product Development• Game mods, music remixes, hardware modifications

• Products defined initially by firm – changed through firm/customer interaction

Product Co-CreationCustomer Categories• Numerous motivations associated with product co-creation

have been established• empowerment, self-serving bias, associative self-anchoring

• Suggests different consumers mayengage in product co-creationfor different reasons (Jeppesen & Molin, 2003)

Collaborative ProductCreators

Collaborative ProductConsumers

Core Product Users

CONSUMERS

Consumption

Collaborative Development Customer Categories• Numerous motivations associated with product co-creation

have been established• empowerment, self-serving bias, associative self-anchoring

• Suggests different consumers mayengage in product co-creationfor different reasons (Jeppesen & Molin, 2003)

• Co-CreationCreators

• Co-CreationConsumers

• Core Consumers

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Consumption

Co-Creation Activity

• Interactions within a product co-creation network matters

• Individual connectedness to other developers provides greater access to knowledge (Grewal et al., 2006)

• Group interconnectedness between developers provides greater access to social capital (Singh et al., 2011, Ransbothamet al., 2012)

• Focus has been almost entirelyon pre-release and innovativeness

Consumption

Co-Creation

Activity

Communities

• Participation in brand and consumption communities can influence product success

• product adoption (Gruner et al. 2014; Thompson and Sinha 2008)

• brand loyalty (Adjei et al. 2010)

• product risk (Algesheimer et al. 2010; Zhu et al. 2012)

• consumption (Smith et al. 2013)

• Focus has been on traditional customers not involved in product co-creation

ConsumptionCommunity

Influence

Marketing Influence

• Public relations events, referrals, and price promotions can influence product success (Albuquerque et al. 2012)

• Customers can engage in both creation and consumption ofco-creation

• Focus has been on traditionalcustomers and not considereddifferent types of customersin the product co-creation process Consumption

Marketing Mix

Post-Purchase Co-Creation

• Do customers meaningfully differ in their engagement with post-purchase product co-creation?

• Are these different customer product co-creation categories associated with different levels of consumption?

• How does co-creation engagement, community influences, and marketing mix factors affecteach category’s association withconsumption?

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ConsumptionCommunity

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Marketing Mix

Co-Creation

Activity

Study Context

• Custom online data collection technique

• Captures actual online consumer behavior

• Data collection - Steam

• Every two weeks

• 16 data observations per user (32 weeks)

• 900+ active users of focal game

• Behavior collected from Steam Workshop, Steam community site, and Steam profile pages

Study Context

• Steam Workshop – Torchlight 2

• Profiling Measures• Frequency of Authorship Activity• Frequency of Commenting Activity

• Time-Varying Individual Measures• Focal Consumption• Author Activity• Comment Activity

• Time-varying Community Measures• Creator Community Author Activity• Creator Community Comment

Activity• Consumer Community Comment

Activity

• Marketing Activity Measures• Proportion of Mod Stories in Media• Product Promotions

• Controls• Last Period Focal Consumption• Platform Consumption• Platform Investment• Connections

Categories of Collaborative Product Development?• Do separate categories of collaborative product development

customers actually exist?

• Do customers meaningfully differ in their engagement with post-purchase product co-creation?

• Co-Creation Creators

• Co-Creation Consumers

• Core Consumers

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ConsumptionCommunity

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Marketing Mix

Co-Creation

Activity

Latent Class Cluster Analysis

• Mixture Model to account for different Categories of Product Co-Creation Participation

• Observations aggregatedover 16 observation periods(32 weeks)

• Classification Variables

• Frequency of Authorship Activity

• Frequency of Commenting Activity

Product Co-Creation Categories

# of Classes BIC CAIC

1 -916 -1202

2 -1706 -1989

3 -1762 -2042

4 -1790 -2067

5 -1780 -2054

Community

Creator

Code

Creator

Consumer Core

Frequency of

Authorship Activity

1.589 5.181 .052 .011

Frequency of

Commenting Activity

9.384 1.069 1.508 .142

Cluster Size .008 .014 .069 .910

Community

Creator

Code

Creator

Consumer Core Wald Test

Frequency of

Authorship Activity

1.801 2.996 -1.600 -3.197 329.79***

Frequency of

Commenting Activity

2.049 -.124 .220 -2.145 543.867***

Model Fit (X2) 5621.69*** (df 277)

Model Fit

Model Results

Model Descriptives

Product Co-Creation Category Descriptive Statistics

CO-CREATION CREATORS

CO-CREATIONCONSUMERS

CORE CONSUMERS

Mean Std Dev Mean Std Dev Mean Std Dev

Consumption Focal

Consumption

5.322 10.149 5.926 16.761 0.776 4.781

Platform

Consumption

24.07 35.63 25.20 31.67 27.26 40.60

Platform

Investment

83.70 90.68 90.89 95.20 122.16 147.62

Author Activity Authored Mods 2.383 2.975 0.222 .739 0.060 .297

% Periods with

Mod Activity

29.38% 45.62% .66% 8.12% .04% 1.89%

Comment Activity Comments 0.994 4.084 0.185 1.211 0.002 .084

% Periods with

Comment Activity

25.63% 43.72% 7.58% 26.47% 0.13% 3.59%

Population % of Population 2.08% 6.88% 91.04%

% of Total

Consumption

9.05% 33.27% 57.68%

Panel Regression Analysis

• Panel regression model• Lagged dependent variable (Beck & Katz 2011)

• Panel corrected standard errors

• 16 observation periods (32 weeks)

• Co-Creation Activity – author activity, comment activity

• Creator Community – group author activity, group comment activity

• Consumer Community – group comment activity

• Marketing Actions – mod PR, product promotion

• Controls – lagged consumption, platform consumption, platform investment, connections

Game Consumption – ln(Hours)Creator Consumer Core

Co-Creation Activity Author

Activity

.373***

Comment

Activity

.278* .585***

Creator Community

Activity

Creator Community Author

Activity

.028 .014

Creator Community

Comment Activity

.097*** .012 -.08

Consumer Community

Activity

Consumer Community

Comment Activity

-.021 .014 .008***

Strategic Marketing

Activity

Proportion of Mod Stories

in Media

-.325 -.098 -.075*

Product

Promotion

.440** .079 .092***

Controls Last Period Focal

Consumption

.063*** .035*** .031***

Platform

Consumption

.186*** .007 .021***

Platform

Investment

-.002*** .000 -.00008***

Connections .003*** -.003*** .000

Constant -.449** .345*** .106***

Serial Corelation F Test 116.04*** 113.99*** 218.41***

Model Fit Wald Test 331.04*** 400.86*** 246.45

Sample n 20 66 874

t 16 16 16

R2 .569 .334 .118

Conclusions

• Co-Creation Ecosystem

• Creators provide mods

• Co-Creation Consumers influenced by interaction with mods

• Core Consumers influenced by interaction with Co-Creation Consumers

• Co-Creation Creator

• Proportionally higher consumption

• Consumption driven by their own activity, and by the Creator community

• Product promotions influence consumption despite already owning the product

Conclusions

• Co-Creation Consumer

• Proportionally higher consumption

• Consumption influenced only by their commenting activity

• Core Consumer

• Consumption influenced by Co-Creation Consumer community

• Product promotions and co-creation PR influence consumption despite already owning the product

• Marketing Mix

• Product promotions and PR can influence consumption even following purchase