CHICAGO, Nov. 6, 2012 /PRNewswire-USNewswire/ -- Consumers perceive user-driven firms, i.e., firms that permanently rely on crowdsourcing processes to integrate their user community into new product development, to have higher innovation abilities compared to more traditional, designer-driven firms. This innovation inference prompts consumers to exhibit stronger demand for products of user-driven firms.
Traditionally, professional designers at companies were exclusively responsible for designing new products. Recently, however, various industries have started to develop new products that were not designed by designers working at firms but rather by their users (by user communities or "the crowd"). Consider Threadless, for example, a fashion company that specializes in the mass marketing of user-designed T-shirts. Threadless and similar firms in several consumer goods fields (e.g., apparel, household products, sports equipment) have begun to almost completely "outsource" the idea and concept generation to their user communities on a permanent basis. The best of these user ideas are marketed as "products designed by users" to the broader mass of consumers.
The study published in the September 2012 issue of the American Marketing Association's Journal of Marketing addresses the implications of this trend by exploring consumers' perceptions of companies selling products "designed by users". The authors provide evidence that being user-driven enhances consumer perceptions of the firm's innovation ability—according to the authors "a counterintuitive effect given that consumers tend to assign less expertise to users than to company designers". The reasons for this crowdsourcing effect are fourfold: First, consumers perceive that the "crowd" can generate more ideas than the conventional design mode. Second, the crowd contains a more diverse set of people than conventional design, which is also believed to lead to more diverse ideas. Third, consumers perceive ideas of the crowd as more applicable, as the crowd are true users of the product. Fourth, consumers believe the crowd to be less subject to constraints in idea generation; they have more freedom in the design of products. Moreover, the authors underscore the relevance of perceived innovation ability, showing that it has positive effects on consumers' behavioral reactions in the form of increased purchase intentions, willingness to pay, and consumers' intention to recommend the firm to others.
But beware that the innovation effect does not hold for all products – it only applies to products which are relatively simple to design. In particular, common design by users loses its perceived power when the underlying design task becomes too complicated to be addressed effectively by users (e.g., robotic toys, consumer electronics). The authors argue that for complex products such as consumer electronics, the innovation effect of user design tends to reverse and could potentially backfire as an innovation strategy.
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SOURCE American Marketing Association