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@Itsu 2015-09-26T14:41:24.000000Z 字数 15626 阅读 4219

Marketing in a Digital World

Itsukay

Module 1: Course Overview and Digital Tools for Developing Innovative New Products

Content:

Basic Concept: Product

Concept:

A product is really anything that fulfills a customer need or want.

Types:

firms competing for the same customers. Thus, in order to be successful, a product must have a distinctive selling proposition. In marketing, we refer to this, typically, as a

Product's Positioning.

Product side of the marketing mix.

Two fundamental concepts

Product development

Innovation is viewed as a critical element in the success of any product. Firms that are more innovative typically enjoy much greater market success. Marketers typically refer to these types of firms as engaging in what's known as

Since these types of disruptive innovation are quite unusual, most firms engage in what’s known as

This type of innovation focuses more on improving existing products rather than creating entirely new ones.

To develop these new products, most firms employ a cross-functional team comprised of managers from across different parts of its business units including

Typically, these team members follow a very carefully scripted product development process such as the Stage-Gate method, in which product development moves systematically from conceptualisation to launch in various stages-- usually 5 to 7 stages. At each stage point, data is collected, progress is monitored, and approval from higher authority is sought. This process is usually quite secretive in nature, and those outside the firm have little direct involvement.

For example, during the Stage-Gate process, consumer insights are solicited at only two points in the chain: The beginning and the end. Moreover, because this process is meant to be confidential in nature, only a few, select amount of consumers are asked to provide input to these activities.

Although these type of development processes are well-established and carefully managed, most new products still fail.

Brand management

We usually think of a brand as a name, a symbol, or a design that differentiates one firm's products from its competitors.

This differentiation can either be tangible differences such as better taste, or intangible differences such as a particular colour. For example, the Coke brand is differentiated not only by its name, but also by the script-- the font-- that it uses, and also the color red. It owns that colour in the cola category. These types of strong brands help consumers decide what to buy, and provides them not only with greater confidence, but also with a sense of identity.

Brands help tell us who we are. They're also beneficial to firms, as strong brand usually can charge higher prices, enjoy greater loyalty, and experience higher profits. This results in what marketers term "brand **equity”, which is the value of a brand over a generic product in the same category. Brand equity is a substantial and tangible asset for many firms.

For example, Coke’s brand equity is estimated to be worth over $80 billion. That's billion with a B. And this represents nearly 40 percent of its total market value just for the brand alone.

Given this high value placed on brand equity, most firms place considerable emphasis on building strong brands by carefully choosing brand elements such as the name, the color, and the brand's symbols. Firms also focus on building strong associations to their brands through advertising campaigns, and also protecting these investments through trademarks and other forms of intellectual property protection.

USUALLY

all of these brand functions are closely managed by a brand management team whose sole job is to manage the health of a brand. both product development and branding decisions are typically made by a firm's brand managers with relatively little input from customers or external entities in general.

For example, in the typical new product development process, consumer input is solicited in only concept testing stage, and the test market stage. Even then, typically only a small amount of customers are asked to provide input.

NOW

through digital marketing, is that this firm-centered approach is starting to break down due to the rise of these new digital tools.

For example, the Chicago-based T-shirt manufacturer Threadless-- and we'll talk about the Threadless case shortly-- this company has no design staff at all. All of its T-shirts are designed and selected by its customers using a web-based platform in which designs are submitted, viewed, and voted upon all by its users. Thus, in this new digital marketing environment, we're now moving from firm-created products and brands to co-created products and brands.

Digital Concept: Customer Co-Creation

Innovation happens everywhere, but there is simply more elsewhere than here.

Basic Concept

The core idea of customer co-creation.

The realization that your customers can actually help enhance your new-product development activities. But us customers are not only buying your products they may also help design and develop them. This is a radical departure from the more traditional internally focused innovation processes that most firms had used in the past.

a bit more of a formal definition of what customer co-creation is. We look at customer co-creation as contributions made by customers that assist a firm in the design and development of its new-product offerings. Here we use the term customers quite broadly, so these contributions may also come from non customers, but this is a bit less likely.

Specific concepts

Focus on three issues in particular. First of all, what are the steps involved in customer co-creation? Second of all, what motivates customers to engage in this activity? And thirdly, what are some different types of customer co-creation?

Steps involved in the co-creation process

  1. contributions. a firm must convince its customers to submit their ideas, to give them contributions.

    getting contribution is actually quite hard because most customers, like you, are quite busy and typically care very little about your products. They don't have much incentive to spend their valuable time giving you ideas to benefit your company. As a result, most co-creation efforts fail because they don’t get many submissions. No one gives them any ideas.

  2. selection process. once it receives these contributions, it must then select the few valuable ones for the many that are less valuable.

    But most submissions are not very useful -- there may be ideas that you have thought about before, maybe too idiosyncratic for a given customer that may alienate other customers, or maybe they are too expensive. As a result, firms face a very difficult task of having to reject customer submissions and risk the danger of creating bad will that some of the most highly engaged customers who are giving them ideas -- having to reject these valuable ideas.

Thus, in order to be successful at co-creation, firms must both

  1. Convince customers to give them ideas
  2. Have a way of rejecting these ideas without alienating their customer base.

Two main methods for motivating customers to engage in co-creation:

  1. Social recognition
  2. Financial reward.

Most firms that are successful in customer co-creation employ both the social and the financial incentives. Usually, these rewards go to customers whose contributions have been selected. So, only those few whose ideas are being used are typically rewarded.

For example, customers who submit winning designs to Threadless t-shirts receive both a $2,500 in monetary incentives; they also receive the intentional benefit of having their name printed on the back of the t-shirt's label. So each t-shirt that is designed using your submission carries your name.

types of co-creation

Four different types of co-creation based on a two-by-two matrix.

it is based on the two key steps in the customer co-creation process.

Contribution step

Selection step

This provides this two-by-two matrix provides four different types of customer co-creation.

Actual processes by how each of these techniques work.

Collaborating and tinkering

Week 1 Pic 3

a flow chart that talks about the process from start to finish.

And if you look at both of these, there is quite some similarities in terms of the processes.

  1. we have a firm releasing something that is developed
  2. some of the customers (usually a small percentage, typically 10% or less) will take that initial offering and modify it or suggest changes in some way.
  3. And then other customers — usually these changes are transparent and a broader customer base will see these contributions and they can either vote on them or further modify them.
  4. over time, the firm or the project team will see both the contributions as well as the broader market reaction to these contributions and then engage in some sort of selection process.

The key difference here is that

and then also that in phase four, there is another distinction between these two steps.

Co-designing and sharing.

Week 1 Pic 4In both of these,

  1. we have users or customers who are submitting ideas to a firm, ideas or designs
  2. and then we have a selection process, that's a fundamental difference.
    • co-designing, typically the community has a strong voice in selecting the contributions that should go forward. So we saw it with Threadless. We have the actual votes and comments by customers play a big role in the selection process.
    • sharing, we used Electrolux earlier -- it's simply a small team, typically of corporate executives, who make the selection process.
  3. And then, from that, a very similar process afterwards in which the selections are basically either integrated into an existent design or launched as a stand-alone commercial product.

Academic insights

Intro

researchers conducted a series of experiments in which they asked participants to design their own watches.

Findings
  1. The participants who made their own watches were willing to pay more for these watches compared to participants in other condition who were given a professionally designed watch.
  2. When other set of participants were given both sets of designs, they actually preferred the co-created watches and were willing to pay more for them.
Conclusion

This study suggest that users are able to create attractive designs and, in addition, they'll pay more for the ability to do so.

Intro

the researchers conducted a blog mining study to examine how social media is used to engage customers in the co-creation process.

Findings
  1. most co-creation activities are focused on the early stages of the product development process. Most are focused on idea generation rather than further concept development or product launch.
  2. Most successful firms are open and transparent about how they intend to use these contributions provided by their customers.
Conclusion

this suggests that in order to be successful in terms of employing co-creation, firms need to release some control and be less secretive about their product development activities.

Practical recommendations

If you're a firm trying

to engage in this new form of innovation, what

should you do? First of all, we have something

called the rule of one. Now,

  1. typically we see across most co-creation platforms, only about 1% of all submissions are useful and can be implemented. This is a very low percentage, so what this means in order for co-creation to work, you need lots of ideas and need to provide incentives for many customers to contribute. And that's a problem for many platforms.

  2. authenticity is especially critical. Customers are much more likely to contribute their valuable time and energy to firms that have an authentic need for their help, rather than just trying to exploit them for commercial gain.

    For example, Linux and other types of open source software have a great deal of authenticity because their very existence depends on the customer co-creation process. That's how they exist.

  3. patches and badges. we all like to be rewarded for our efforts. We want to feel that our efforts matter. So, customers who engage in co-creation are no exception to this policy. Most successful co-creation efforts award successful co-creators by not just financial rewards, but also through some visible symbol of recognition.

    for example, NASA, which employs customer co-creation for its space program, rewards successful co-creators by giving them a special patch they can display on their clothing. In fact, NASA found that this patch was a much stronger motivator than financial rewards.

  4. don’t be the bad guy. As noted earlier, one of the dangers of customer co-creation is the possibility of alienating customers who— by rejection their contributions. One way to reduce this risk is to engage your broader community to help evaluate and vote on these contributions. So, for example, Dell sources customer co-creations on its website platform called IdeaStorm in which to improve its products and its offerings. So, in this website, Dell actually engages its customer community to evaluate and vote on these ideas, thus Dell's customers who have their ideas rejected feel it's other customers who don't like their ideas rather than Dell itself.

If you'd like to take a deeper dive, two particular books.

Reading:
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