Flashcards in User Innovation Deck (19):
What characterizes a Customer Dominated Paradigm
- The most active role of the users in developing and exploit innovations
- Users may not need manufacturers to produce/diffuse innovations ex software
- Possibility for user to become entrepreneurs by commercialize their innovations
What characterizes a Customer Active Paradigm
- Users have an active role in the fuzzy-front-end of the innovation process
- Idea generation, concept formulation and development
- Manufacturers take over the task to develop user inventions into reliable products and services and to sell them to the market
Stickiness of User Innovation - Eric von Hippel
“Stickiness of a unit of information is defined as the incremental expenditure required to transfer that unit of information to a specified location in a form usable by a specified information seeker. When this expenditure is low, information stickiness is low; when it is high, stickiness is high.”
Information stickiness: information that is costly to acquire, transfer and use in a new location.
- Tacit (tyst) information that cannot be specified cannot be transferred
- Direct communication transfer between firm and user
- Absorptive capacity depend on prior related knowledge --> The stickiness of the information about the advanced technique for the firm in question is therefore higher than it would be for a firm that already knows that basic information
- Have needs before the majority of customers in a market.
- Big benefits to solve these problems
- Serve as need-forecasting for market research
- Start own innovation activities ex ideas, concepts, prototypes
- None-representative for the market (not optionion leaders in market)
- They invent before manufacturers become active
User Innovation Toolkit
- Trial-and-error learning is key advantages and essential for product and service development. Wont get it right the first time. Play around.
- Immediate feedback ex price to enable several fast iterations
- Manufaturers dont have to fully understand customer needs --> outsource it to the users. Save money and time with sticky solutions and informations (but not the aim). Users solve the sticky info task themselves
Two searching search methods for lead users that are more efficient then complete screening of the user population and why?
Broadcasting and Pyramiding
- Screening is a parallel and complete search procedure involving all members of the population.
- Pyramiding need to contact less people to find lead users.
- Broadcasting announcing a request and expect users to self-select themselves with result in much lover costs.
- Sequential search process where the target informants are identifies by personal references.
- People tend to know/be aware of others who share certain qualities.
- Start by asking someone on its status relative the search attribute. Also reference to a better fit to the attribute.
- Iterative process until right person is found
Describe Broadcasting (search for lead users)
- Ex. Starts discussions in online forums with asking a question. Announcing a request and expect users to self-select themselves
- Announce info and invite people with desired qualities. People select themselves to participate
- Collecting info from every member of a population to find the person with the right attributes.
- Interviews to find out skills, knowledge, personal characteristics.
- Parallel search approach
Why is the rate of user innovation increasing and what is the result?
- Steady improvements in computer software and hardware to develop capable, cheaper and easy to use tools for innovation
- Improving tools for communication are making it easier for user innovators to gain access to the rich libraries of modifiable innovations and innovation components
- Results in higher rate of user innovation even though the users heterogeneity of need and willingness to pay for "exactly right" product remain constant.
- Need for differentiating and the unchanging need could result in difficulties to find common ground and slow down innovation rate
Four elements in marketing mix
How is product/service design addressed by implementing user innovation toolkits?
- Impact the p/s differentiation and improve customization
- More fresh designs than they could create themselves ex t-shirts
- Less sticky info. Feedback direct
- Data from toolkits can be used to understand customers better and address their needs. Could improve standard product
- Less uncertainty about market acceptance. Data for market research. Understand emerging needs and changing preferences
How is pricing addressed by implementing user innovation toolkits?
- Higher prices: customers pay more for customized products. Meet needs better, unique
- Price differentiation: charge different prices
- Lower product and service development costs:less iterations and interactions between users and manufacturers
- Higher production costs
How is communication addressed by implementing user innovation toolkits?
- Consumers more involved and develop higher level of loyalty to the firm/brand
- Differentiate from competitors
- Enhance firms reputation as innovative/market oriented company
How is distribution addressed by implementing user innovation toolkits?
- Less effort for customer service
- Online tools enables direct distriution
Four requirements that characterize a user innovation toolkit and apply them on the beer machine case
1. Tool for design: Play around and explore needs (in bar created by barkeeper or home)
2. Test and immediate feedback: trial-and-error learning,
Direct feedback is harder and would need a community platform to publish best recipies etc
3 Module library: Variation of different ingredients possible, standard modules and starting solutions
4. Appropriate solution space: restricted ingredient library so all user-generated designs are ready for production without further design work
McDonalds - Create your own burger. Who was the main target group of the toolkit campaign?
- Loyal fans: Wide range of fans ex families, youth. The campaign encouraged customers to create and market their own burgers
- Youth: Internet, Facebook more used by younger people as they have higher need to communicate on these medias and higher need for self-portrayal
- Consumer involvement strengthens brand loyalty of current buyers but also can attract neutral or passive individuals
Why is it important to reduce market uncertainty
- Reducing market uncertainty is very important in the early stages of innovation projects. Customers as sources creates valuable input.
Incremental innovations: well documented methods ex focus groups, conjoint analysis etc
Substantial innovations: Very different and hard to determine the demands of tomorrows market. conventional market research show disappointing results.