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Quiz
What does Eric Morris mean by “shoehorning”?
How does Ford use Big Data for marketing? Name 3 things we can learn from
Wikinomics according to Tapscott. Von Hippel states that “Full-function
communities in which users actually produce their innovations” can only exist under one condition. Which condition is that?
Mass Collaboration and Crowd-sourcing: How does the Internet help Innovate?
User Innovation Community
user-community in which information, assistance, and innovations are freely shared. Open source communities (Apache, Linux,
Apple) Innovation communities: InnoCentive,
Kitesurfing Open source hacker communities (Apple) Brand communities (Coca Cola, Harley
Davidson, LEGO, or Barbie)
Instant Messaging is a User Innovation
By 1987 MIT Lab for Computer Science had thousands of workstations online and difficulties diffusing system admin info rapidly. Developed “Zephyr” instant message system. MIT students begin to use for general instant messaging
By 1990, other universities adopted Zephyr-like programs
First Commercial Product 9 years later 1996 Israeli firm Mirabilis put out product ICQ 1998 Mirabilis acquired by AOL
Ongoing evolution of Wi-Fi
User Activities starting around 2002 Users discover possibilities and begin free sharing
of wireless networks Users Modify Wi-Fi antennas to greatly increase
range Widespread implementation occurs – travelers find
“hot spots” as they travel, can get Internet access, send e-mail from the highway etc.
Traditional Supplier Responses? No one will want it no network security We think this might be service stealing… should
stop.
Examples of Important Consumer Product Innovations
User and Manufacturer Innovations Differ
Users tend to develop Functionally Novel innovations: The first sports-nutrition bar The first scientific instrument of a new type
Manufacturers tend to develop Dimension of Merit Improvements: A better-tasting sports-nutrition bar Improvements to an existing type of
scientific instrument
Consumer Innovation Communities (Prosumers)
Displacing manufacturers as product developers? What are marketers to do?
Motivation? What are marketers to do?
Taking Control over experience. What are marketers to do?
Effect of Democratized Innovation
"When I say that innovation is being democratized, I mean that users of products and services—both firms and individual consumers—are increasingly able to innovate for themselves.” (von Hippel, 2005)
Effect of Democratized Innovation
User-centered innovation processes offer great advantages over the manufacturer-centric innovation.
Users that innovate can develop exactly what they want (no middle agent).
Individual users do not have to develop everything they need on their own.
The trend toward democratization of innovation applies to information products such as software and also to physical products.
Effect of Democratized Innovation
The multiple – the social Superiority in design and functionality Leverages the playful element of
consumers Changes attribution of product/service
outcome
“3M products based on lead users, are 8 times higher in sales than market research driven innovations.” (von Hippel, 2005)
Customers involvement in the product development process:
especially in idea generation, product conceptualization, prototyping
We know that online user communities allow a firm to leverage the creativity of its customers in all stages of the product development process.
But what kind of online user community should you have?
There are different types: Virtual customer community user content collaboration innovation community User development community user product collaboration innovation community.
Virtual customer community
Consumers as consultants Composed of customers who have experience using
your product. Customers chat online and exchange personal
experiences, disseminate news through bulletin boards, and comment on products, services, and even marketing activities (investment communities).
reputation management product and service support users’ hidden behaviors (understanding wants and
needs).
User content collaboration innovation community
Customer as collaborator a model of a volunteer community of
collective creation through networks. Members don’t have to be tech-savvy
Ex.: Wikis
User development community
Customer as collaborator Allow users to customize your
product/service Allows for the development of
supplementary products by others
Ex.: iPhone’s software community).
User product collaboration innovation community
Not much known about these groups yet.
Difficult to say how this community format may affect company.
Mozilla, Linux, Kitesurfing
What community is possible and useful for
Paper manufacturer Home improvement retailer Mid-Range Hotel chain One of your own choosing
Fournier on brand community
Business strategy Exists to serve the people in it Strong community = strong brand Embrace conflict Mass participation (not opinion leaders) Online networks just one tool, not a
community strategy If done well, it can’t be controlled