Product Creation and Design: To involve the consumer or not?
Posted in Marketing & Strategy Articles, Total Reads: 3067
, Published on 05 February 2012
This article written by Akhila Prabhakaris the second prize winner in the MBASkool Article writing Contest held in January 2012.
The Oxford English dictionary (OED)has more than 600,000 words and is considered as one of the most comprehensive collections of the English language. It would be unthinkable for a single organization to build, improve and continuously update a collection, that is so massive and at the same time expanding, all by itself. This would need a steady stream of new words and knowledge of new usages of words.
English has colloquial connotations owing to its usage in different parts of the world. Many Indian words have also found their way into the prestigious OED. Popular words such as Guru, Jungle and Yoga are already part of the dictionary. This is the only dictionary which even lists non-English words which are used in everyday conversation such as Paan and Roti. If it had not been for inputs from around the world, such words may never have found mention on the dictionary.
OED is a collective work of numerous volunteers who submit their contributions to create and develop this large volume of work. These people are seldom paid for their work and are unknown to the administrators of the project and yet are lending their service. OED presents one of the earliest examples of what is today called as Crowd sourcing.
OED defines the term as obtaining (information or input into a particular task or project) by enlisting the services of a number of people, either paid or unpaid, typically via the Internet.
Today we see many firms seeking inputs from their customers to better their products or services. This type of customer engagement evokes voluntary participation from the target group and helps the firm in connecting with its audience in a better way.Companies are showing a keen interest in involving the consumer in creating products. Some are even using this to tap the potential of employees within the firm. This concept of co-creation has been successful for some companies but is yet to take-off for others.
Many companies are incorporating consumer suggestions to design products.This input received from the consumers is not like a routine chit dropped off in the suggestion box. It is a conscious effort made to encourage the users to think of new ideas. There is a defined channel put in place to capture these thoughts and an incentive for participation. Social media has been influential in driving this concept and helped marketers connect to the audience in a manner that is personal yet inexpensive.
Involving consumers - The way forward
The leading brand in packaged snacks invited ideas for new flavors of potato chips to add to the product portfolio. “Give Us Your Delicious Flavor” campaign, launched in October 2009, received around 1.3 million entries. The contest generated a lot of buzz and the popularity of the brand was reaffirmed. It helped the company to gauge the expectations of end users and launched 4 shortlisted flavors.
The global search giant has utilized the inputs of its users and made its homepage more vibrant. The Google Doodle is extremely popular and provides a creative and colorful dimension to an otherwise modest search homepage. Google organized competitions for school kids and asked them to make their version of the word “Google”. This event served dual purposes of building brand equity for Google and generating a store house of Doodles.
Employees at Toyota contribute to the ideation process and come up with more than 1 million ideas. A whopping 95% of them are implemented by the company. These employees know the industry well, the nature of the competitors and products available in the market and thus are in a position to evaluate the best innovation opportunities. These ideas are thus practical to implement and can be profitable as well.
Benefits of using consumer inputs
Expand the innovation scope
Earlier, companies relied on a select few to come up with innovative ideas. It was the realm of the chosen ones. There were R&D labs which were entrusted with the responsibility to come up with new designs. The technology today has allowed even common people to voice their opinion and participate in the action.
Create storage of ideas
With many people participating, the company has the advantage of generating a large set of ideas in a short span of time. It can also leverage the benefit of getting different perspectives from different sections of the society. Diversity can be captured. This can be used as an input to identify the needs and expectations of the society.
It assists in reaching consumers who were not users and connecting to the existing consumers. The brand can create awareness and visibility in the market. This is better and effective than advertising as it involves consumer experience and remains in memory for a long time. The personal experience carried by people can be propagated through word-of-mouth publicity.
People who participate in these ideation processes spend time and effort thinking about the brand and ways to improve it. They connect to other members who have been a part of this activity and find something to share and discuss. They develop a bond with the company or organization that brought them recognition and new people to connect with.
Involving consumers-Is it a mistake?
The coffee house has generated new ideas for its products and experience from its users through the program My Starbucks Idea. It has received 27,154 ideas in the Coffee and Espresso Drink category itself. There are 15 more categories and each category has received more than 2000 ideas for new products or improvements in existing products/experience. Even though there were more than 75,653 ideas received, only 315 ideas have been implemented to-date i.e. 0.4% of the total.
“IdeaStorm” program was started to let consumers come up with computer related ideas that was evaluated and discussed online. It was launched in 2007 and had generated around 12,000 ideas but those that were implemented were only 366 i.e. 2.9% of the total.
This was an online innovation community based on the concept of involving the consumer throughout the product development process. It was a French company that completely relied on the co-creation process even for its marketing activities. This website was launched in 2007 but doesn’t exist anymore. The reasons attributed to its failure are an abundance of ideas, lack of community involvement and no real brand equity for CrowdSpirit.
Drawbacks of using consumer inputs
Quality of ideas generated
A vast majority of ideas generated are not practical, implementable or profitable for the company. This explains the dismal performance of such initiatives. The people contributing to this ideation process may not be equipped to come up with workable solutions and they may not know what they really need. They lack expertise in the product or knowledge of what is practical. Even though a lot of ideas are generated, the company can hardly use any.
Jeopardize company goodwill
People spend their time and effort while participating in these campaigns. When they fail to see their ideas implemented, it creates a feeling of disappointment. Customer relationship can go for a toss when people see that a majority of ideas are rejected instead of being recognized or rewarded.
Commitment to the cause
The company takes ideas from the people should show results on the ground. The ideas that are good enough need to be implemented and communicated to the people. The company cannot afford to just collect the ideas and sit on it. The ideas have to be incorporated to maintain credibility.
Not for all companies
This model of co-creation cannot be utilized by all the companies. A brand that is already well established in the market will get a better response than a new company yet to find its footing in the market. The incentive to participate depends on the nature of product and the category. FMCG will attract a different type of consumer compared to a car maker.
Product innovations are extremely important to remain competitive in the market and relevant to consumer needs.Using the power of the crowd, companies can create a strong brand presence and at the same time utilize consumer inputs as it brings in diversity of thoughts. Wikipedia is a success in this aspect as it has established the largest online encyclopaedia solely based on the consumer contribution and online collaboration of users.
On the flip side, consumers may not be the best sources to rely on for product development as they are unsure of their future needs. Before iPad was launched, a market survey revealed that people did not prefer to have a tablet as there were alternatives available in the market such as PC, notebook and smart phone. When iPad was launched it became an instant success and has established a new category today.
Companies today have to find the right balance between consumer expectations and real needs and create products appropriately. To drive initial sales, features are important but for lasting consumer loyalty utility matters more.
This article has been authored by Akhila Prabhakar from Great Lakes Institute of Management.