Recommendation networks and the long tail of e-commerce


Nowadays, we almost can’t imagine online shopping without recommendations systems. Popular electronic commerce websites like Amazon, Bol.com, Asos.com and so on all have a section with products they personally recommend to their customers. This is often displayed as: ‘You may also like…’ showing multiple products related to the ones you have recently viewed.

Integrating social networks like Facebook and Instagram into the world of electronic commerce is on the up and can contribute to the personalized recommendation systems of online retailers. In this way, customers get personalized recommendations based on what friends in their networks bought. This makes the less popular products, which customer normally not have looked for, more visible and stimulates consumers to buy products that they normally wouldn’t have found. These products are known as ‘the Long Tail’ products and are often presented as ‘Customers like you also bought…’.

To put it differently, if consumers get e-commerce recommendations based on their networks, the level of awareness for less popular products will increase. This means that the distribution of revenue and demand is influenced and shifts more towards a long tail distribution and away from selling primarily the most popular products. Simply by peer-based recommendations, customers will buy more and different products than they would normally have.

 

Research done by Oestreicher-Singer & Sundararjan (2012), investigates the impact of peer-based recommendations on the demand and revenue distribution. They research the influence of network-based recommendations on the online sales of 250.000 books from online retailer Amazon.com. The research shows that by recommending books based on what friends in customers’ networks bought, the distribution of demand and revenue is highly influenced. The researchers focused on the top 20% most popular and top 20% most unpopular products.

Categories of unpopular books that were displayed based on peer-recommendations experienced a 50% increase in revenue whilst the commonly unpopular books experienced a 15% decrease in revenue. This meant that the unpopular books suddenly became more visible to customers which led to an 50% increase in sales.

That all sounds quite impressive, but one could not say that this 50% increase was only caused by the visibility of products through recommendations. Different other contemporary factors also contribute to the redistribution of demand and revenue of consumers. Lower search costs and higher product variety for instance, have a great influence on the long tail of e-commerce.

 

All things considered, e-commerce is highly influenced by the power of social networks. The influence of recommendation networks positively affects to phenomenon of the long tail demand. Selling less of more rather than more of less is going to characterize the e-commerce demand curve in the future. The implementation of ‘what other customers like you bought’ will continue to impact our online shopping behavior. If companies implement the right recommendation systems to influence consumer demand, the opportunities are endless!

 

Sources:

Anderson, C. 2006. The Long Tail: Why the future of Business Is Selling Less of More. Hyperion Press.

 

Brynjolfsson, E., Hu, Y., and Smith, M.D. 2006. From Nichees to Riches: Anotomy of the Long Tail. Management Review 47(4) 67-71.

 

Oestreicher-Singer, G., & Sundararajan, A. (2012). Recommendation networks and the long tail of electronic commerce. MIS Quarterly

48hourslogo, Affordable Logo Designs Done Fast…


There are multiple reasons why a company should want a good logo. A good logo can make good first impressions on costumers, the moment a customer sees your logo they decide if they want to trust you or not. When a logo is good this can thus attract new customers and it can also make you stand out from the competition. To do this the logo must stand out in comparison with other companies in the same industry.

A logo is also one of the most important aspects of a company marketing wise. The logo represents the company and is seen on the company’s emails, social media platforms and marketing campaigns. The first thing a person will notice in all those things is probably the logo, because logos are a visual and those are more appealing to people than text.

It is clear that each company should want a good logo, but how to obtain one? If you hire a professional designer the cost can quickly become very high. For very small companies or startups this amount of money is not feasible. That’s why a lot of these companies go for the crowdsource option. This is the process where the work or funding is made or raised by a crowd of people and is a combination of the words crowd and outsourcing.

The idea of crowdsourcing your logo design would be to tell your requirements to a crowd of designers, tell them how much their reward is and when the design has to be finished. All of the participating designers will enter their own designed logo(s) and the company decides which logo they want to use and thus which designer gets the reward.

An online platform that provides such service at a very high speed is 48hourslogo.com. They offer the service as described above and their standard contests run a lot shorter than most other logo design websites, as suggested by the name, for only 48 hours instead of multiple weeks.

To create a project you simply login to the website, create a project with a title, some info about you business, your target audience and you choose from some standard styles a couple which you like best to give designers an indication of what your taste is like. You can also select your preferred colors and some ideas, concepts or sample logos of your own. After you filled in all of the information needed for the design. Here you have to set your contest prize, the prize the winning designer would win set as a minimum of $99, and you can select some options as a private contest or featuring you contest to make it more noticeable on the website of 48hourslogo.

After you’ve done this the option comes where you can choose how you want to start your logo design. You can choose to only pay the listing price of your contest to 48hours and postpone the contest price till you’ve actually found a well suited design or to pay the full amount in one time. This gives you the option to only lose $29, the listing fee, if there is no design among the submissions. If there are less than 10 design submissions you can even get a full refund.

The contest itself is divided into 3 stages. In the first stage designers enter their designs according to the above described information. During this stage the contest holder can also give some group feedback or feedback to individual designers and rate the designs. In the second phase, the contest holder can select up to 3 designers, who can revision their designs for a week before the contest holder selects the winner. The last stage is the finalization of the project where the designer and contest holder will work together. Only after this stage when the contest holder downloads and confirms the logo package file, 48hourlogo will release the contest prize to the winning designer.

Encouraging and rewarding consumer creativity: How to motivate consumers involved in creative contests?


Brands increasingly rely on creativity contests to integrate consumers into their new product developments processes. The main purpose is to stimulate creativity of internal marketing teams or quickly trigger original ideas for their brands. Not surprisingly, much of recent research is focused on the determinants of success and creativity in those innovation contests.

A study by Salgado & Barnier (2016) seeks to determine the effects of rewards, brand feedback and its interactions on creativity in innovation contests. The research focuses on the first stage of the new product development process, since this is argued to be the most critical stage in the entire innovation process (Hauser et al., 2006). To test their hypotheses, an experiment is carried out with respondents participating in a mock innovation contest. Within the general model, the reward and brand feedback variables are manipulated such that causal relations can be proven (Evrard et al., 2010).

The authors find that brand feedback acts as a moderator on rewards and creativity, and association of brand feedback with reputation rewards strongly stimulates creative designs. The paper highlights that extrinsic rewards (monetary and non-monetary) do not reduce, but instead improve creativity when they are accompanied with brand feedback. Besides, the effect of the choice of rewards is not neutral, but entails different impacts on creativity and therefore should be considered wisely.

The main strength of this paper is its relevance from both a managerial and theoretical standpoint. On the managerial level, the research provides practitioners with insights into the incentives that encourage participation and creativity in producing desired results. Therefore, the nature of rewards offered by brands (monetary and non-monetary) should be taken into consideration when designing an optimal consumer integration process in new product development. Especially for large ‘unblind’ co-creation platforms, where designs are not visible and feedback is rare, restructuring their model may be considered to generate additional creativity. From a theoretical standpoint, this study bridges the longstanding research gap with respect to reward effects on creativity in the context of an innovation competition. Currently, there exists a paradox between academic literature, which emphasize the wide range of participants’ intrinsic and extrinsic motivations in creative contests and managerial practices, which mainly focus on monetary rewards. This research solves this paradox by addressing both factors.

As a downside, the authors did not take into consideration the potential interactions between intrinsic and extrinsic motivations, which could have influenced the impact on the expected creativity level. The paper finds that extrinsic motivations are ‘at the service’ of intrinsic motivations, since extrinsic motivations have no negative effect on creativity when associated with feedback, but intrinsic motivations play a determining role in the accomplishment of creative designs. However, the level of intrinsic motivation is dependent on individual traits and therefore dynamic effects can exist between intrinsic motivation and the effect of rewards. Future research should focus on investigating the interactions between intrinsic and extrinsic motivations. As a last note, I would suggest to include the impact of culture on creative designs. A study by Chua et al. (2014), proposed that creativity heavily depends on ‘cultural narrowness’ and therefore the impact of country origin could have an influence on participation and creativity in an innovation contest. What effect do you think country origin has on this relationship? And what role would brand feedback play in this relationship?

References
Chua RYJ, Roth Y and Lemoine J-F (2014) The impact of culture on creativity: How cultural tightness and cultural distance affect global innovation crowd- sourcing work. Administrative Science Quarterly 20(10): 1–39

Evrard, Y., Pras, B. and Roux E (2010). ) Market: Études et recherches en marketing, 4e édition. Dunod. Dunod.

Hauser, J.R. Tellis, G.J. and Griffin, A. (2006) Research on innovation: A review and agenda for marketing science. Marketing Science, 25(6), 687–717.

Salgado, S. and Barnier, V. (2016). Encouraging and rewarding consumer creativity in new product development processes: How to motivate consumers involved in creative contests? Recherche et Applications en Marketing, 31(3), 88-110.

Reshaping the recruitment industry


Have you ever applied to a certain position for job or an internship and felt like the recruitment process was exhausting? That it takes weeks to receive any response either positive or negative; and that when the later happens no real reason was given to you? If you did experience this kind of situation, you may ask yourself, why is this so often the case?

Well, the problem predominantly comes from companies’ recruiting practices. According to theLadders a recruiter will merely spend more than 6 seconds reading through a candidate’s resume. While BeHiring found out that a cover letter has only 17% of chance of being read, and most recruiters do not even bother replying to candidates.

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Overall, an inefficient and unfair system has been going on for decades which is based on two documents which use is outdated. Moreover, this lengthy process is very expensive to companies who spends a lot of resources on those recruitments.

Those are the reasons why the online SaaS platform Scoringline was founded. Scoringline is an innovative and collaborative tool which value proposition is to ultimately allows companies to capture the most skilled candidates out of a large pool of applicants. It promises companies an endless to save time on both reading resumes and sorting CVs while allowing them to offer a better experience to their candidates.

 

How do companies benefit?

  • (Automatic qualification)  CV-sorting is replaced by an automatic score
  • (Confirm skill sets) – Prescreening phone calls are replaced by role playing simulation
  • (Save time) – The best candidates are invited to follow up interviews, recruiters save up to 50% of their time as it only takes a few clicks to send an answer to all candidates regarding their applications
  • (Enhance employer brand) – The employer’s brand is enhanced by using an innovative hiring process
  • (Candidates profile expanded) – The company’s pool of candidates naturally grows by including people that may not have the usual profile but do have the skills necessary to perform in the position

 

How do applicants benefit?

  • (Outstanding experience) – Companies can forget about the long ATS’ forms and only ask relevant questions to applicants
  • (Let candidates express themselves) – It gives an opportunity to reveal applicants’ skills and motivation
  • (Equity) The process is fair as every application is treated similarly – Guaranteeing equal opportunities

 

How do Scoringline benefit?

Scoringline business model consist of two different offers.

The first one consist of offering a monthly subscription that allows clients to use the platform in their recruitment process. While the second offer consist of selling a HR service where Scoringline’s take care of finding the right candidate for a company who decided to outsource its HR capabilities.

Value Co-creation

Companies using the new online recruitment processes will be able to enjoy network value creation: as more and more job seekers apply through the platform, companies will gradually have a larger database of candidate profiles as all applications are saved, and rejected applicants could still be called back at later stages, saving great time in the process. Furthermore, different departments of a multinational company may decide to share their pool of candidates.

On the other hand, as it performs its recruiting service, Scoringline saves the profiles of all candidates who applied to one of their client’s position. This allow Scoringline to enjoy an ever-growing pool of candidate within which it may find the right profile for its clients.

In either case, the value of this network grows with time as more profiles enter the database, promising a sustainable future to it.

Efficiency Criteria

Scoringline business model is adapted to most political, social or legal regulations of the countries in which it operates. It promotes the transparency of company’s recruiting processes, supports equal opportunities and revolutionize candidates’ experience which are now able to fully express themselves and to not be left without any update about where does their application stands.

 

Sources:

Know Yourself And Know Your Enemy


‘If you know yourself and know your enemy, you need not fear the result of a hundred battles’ (Sun Tzu, Art of War)

Online retailers currently implement and leverage a variety of sales support tools. This article provides insight in consumer (users) behaviour on those e-commerce websites (Adomavicius and Tuzhilin 2005). It looks at different factors that might affect consumer behaviour (specifically consumers’ decisions whether or not to buy a product) (Hennig-Thurau et al. 2012). In this research the effect of two things on sales of a product is examined. One is recommendation systems (generated by the firm) and the other is online review systems (generated by customers). Previous literature has primarily focused on both loose effects; this study particularly looks at how these two factors might combine together to affect consumers’ behaviour.

Recommendation systems are where each product will give you recommendations to other (similar) products (Oestreicher-Singer and Sundararajan 2012). This study argues that we should see recommendations systems as networks with a number of different products linked to each other. This study seeks to analyse the whole network of related product referrals. The author predicts that the position of all the different products within a network might affect the sales of a product. Any product near to the centre of the recommendation network will get more attention. So, if the Product A is near to the centre of the network it will get more sales. If the competing product (or normally products) is near to the centre these will get more attention, taking attention away from the Product A, and so Product A will get less sales.
Online review systems (eWOM: electronic word-of-mouth) are where users of this site write a review of a product. This study observes when the consumers is shopping on the site, they can see both reviews of the product they are considering and also all reviews of other recommended products. The author predicts that the fact that they can see these other reviews creates competition, which makes the customer less likely to buy the particularly product.

The empirical analysis are performed with collected data from Amazon.com on 1.740 randomly selected books within four categories (programming, business, health and guide books) over a period from two years. This empirical analysis yields three major findings. The research has shown that recommendation systems intensify the competition between products. The authors state that the products which are linked to recommendation systems generate more sales if they have a central place in the referral recommendation network. There have been extensive findings that these sales gains are impeded by improvements in the reviews (eWOM) of competing products. This indicates that a positive eWOM received by a competing book worsen the rank of the focal book.

The main limitation of this study is that they used data at aggregate level, and not at individual consumer level. Therefore, the collected data does not track the actual activity of reviews/recommendations. This is a missing link for virtually all eWOM studies. The solution to this limitation could may be collecting click-stream data to better connect behavior and action.

 

 

References
Adomavicius, G., and Tuzhilin, A. 2005. “Towards the Next Generation of Recommender Systems: A Survey of the State-of- the-Art and Possible Extensions,” IEEE Transactions on Knowl- edge and Data Engineering (17:6), pp. 734-749.

Hennig-Thurau, T., Marchand, A., and Marx, P. 2012. “Can Auto- mated Group Recommender Systems Help Consumers Make Better Choices?,” Journal of Marketing (76:5), pp. 89-109.

Oestreicher-Singer, G., and Sundararajan, A. 2012. “Recommen- dation Networks and the Long Tail of Electronic Commerce,” MIS Quarterly (36:1), pp. 65-83

 

 

Hello! Fresh


Not a good cook? Don’t know what to eat for dinner? Too busy to buy fresh vegetables and meats? Well, the solution is now delivered at your doorstep.

Meal-delivery Services are surging in popularity, retailers like Blue Apron, Hello Fresh and Plated surface to deliver fresh vegetables and meats to create your own meals at home with their well-designed recipes.

hellofresh-logo.png

As a leading meal-kit service provider, HelloFresh, a Germany-based company, is founded by MasterChef finalist Tom Rutledge. It has already made its appearance in several Western European and North American countries, as well as Australia since official operation in December 2011. Tom Rutledge’s agricultural heritage inspired him to offer this farm-to-table experience for busy commuters, combining fresh, quality ingredients with simple cooking ideas. According to its website, HelloFresh has shipped over a million meals per month in its covered area. Not to mention, the company more than quadrupled sales last year to 70 million euros. Moreover, it is a purely independent business model that relies on large-scale customer fulfillment center for centralized storage, picking up and distribution.

How does it work?

You start to order meal-kit box at least one week in advance. Every week a box of ingredients for the entire week are packed and delivered to you. Essentially every meal will be equipped with the necessary proportioned food in insulated packages, even spices such as curry powder, rosemary and ginger will be contained, along with recipe cards, which allow users to replicate the dishes by simply following the detailed instructions to prepare and cook. Besides, its membership plan varies from two-person to family-size plan with a compact three-meal or five-meal per week, while Hellofresh also supplies separate vegetarian boxes as well as fruit boxes for special dietary requirements.

hellofresh-boxen-1

Even though meal-kit services are unlike restaurant delivery that you still have to prepare the meals, you are saving loads of time from grocery shopping and recipe searching. More importantly, given the fact that Hellofresh will only serve right amount of what you need for specific recipe, there will be no food residual to worry about.

Default recipes

Cooking with fresh ingredients is what Hellofresh is promoting to their users. As their dedicated team of chefs and dietitians create recipes on a weekly basis to ensure that the meals they prepared are balanced and wholesome. The default recipes have always been considered as HelloFresh’s one of the most critical competitiveness. When speaking of designing recipes, Hellofresh lacks information about users ‘tastes or preferences, therefore, it decides mass default recipes which apply for all users, without taking users’ individual preference into account (Goldstein et al, 2008). However, Hellofresh has covered seven countries across West Europe, North America and Australia, it adjusts recipes according to geographic custom. Nevertheless, HelloFresh also forces its users to accept set meals for a week without actively engaging users to pick recipes. On the other hand, default recipes may increase the risk that HelloFresh users will skip weeks of subscribe in case they don’t favor the food.

One thing worth mentioning is that HelloFresh partnered with Jamie Oliver in 2015, a British celebrity chef, to design recipes aiming to stress the importance of healthy and fresh meal other than food takeaway. Their collaboration delivers users with a wider variety of alternatives yet creative recipes and encouraging them to cook from scratch while enjoying their thoughtful recipes.

hf_blog_jo_800x534_uk

Future path

In light of HelloFresh’s large distribution network, huge expense is inevitable. In order to take advantage of their idle logistics, improving transportation efficiency and reducing the cost of warehouse, Hellofresh could consider to expand its customers base to wholesales like supermarkets, cafés and snack bar to deliver fresh uncooked food. Both the company and the third party could benefit from open logistics and gain profitability. Additionally, not only to offer adults’ meals, Hellofresh could also target at the market of infant food for time-pressed parents wanting to provide their babies with notorious and freshly prepared meal. picture_1

References:

Goldstein, D.G., Johnson, E.J., Herrmann, A., & Heitmann, M. (2008). Nudge your customers toward better choices. Harvard Business Review, 86(12), 99-105.

http://www.dailymail.co.uk/femail/food/article-3393701/Does-Jamie-Oliver-REALLY-deliver-FEMAIL-tests-celebrity-chef-s-new-food-box-recipe-helps-families-cook-scratch-home-pukka-results.html

http://observer.com/2016/01/we-tried-blue-apron-hello-fresh-and-their-4-competitors-one-was-clearly-the-best/

https://www.bloomberg.com/news/articles/2015-09-17/hellofresh-valued-at-2-9-billion-after-venture-financing-round

https://www.hellofresh.com/

Sounds Like Music To My Ears


By: Madeleine van Spaendonck (365543ms)

The Problem Situation

Do you ever pay attention to the music you hear in your favorite store? Many shops and hospitality businesses in the Netherlands still make use of outdated mix-CDs and standard playlists. Considering it has become increasingly important for retail businesses to provide a dynamic brand experience, how can background music be used to optimize the customer journey?

Atmosphere and its business model

Amsterdam-based Rockstart-startup ‘kollekt.fm’ addresses this situation with its new B2B music service, ‘Atmosphere’. Its key resource is its pool of musicians, DJs and producers, called ‘curators’. New clients undergo an extensive intake-procedure that allows Atmosphere to create a ‘music identity’ that reflects the company’s brand identity, target audience and desired customer experience. Consisting of a collection of moods, sounds and emotions, this allows the platform to match brands with the most suitable curators for them. Atmosphere allows curators to use the music on its platform to continuously assemble new playlists on a monthly basis. A streaming app is then used to play the music on-location. (Atmosphere, 2017)

Atmosphere’s value proposition is a better customer experience for brands and a new earning model for artists and music experts. It also incorporates feedback to create better playlists every month and learn from each brand profile to improve its services. Businesses pay Atmosphere on a monthly basis for using the platform, and the curators on the platform decide the price of their service.

Co-Creation Efficiency Criteria (Carson et al., 1999)

Atmosphere is a two-sided platform that connects retail/hospitality businesses with ‘curators’. The business model allows for joint profitability, as it enables businesses and curators to interact to create value together and maximize their payoffs. A study conducted by the Stockholm School of Economics found that background music that matches brand identity can increase store sales by at least 30% (Johansson & Moradi, 2015), which presents a measurable potential financial output for businesses. The curators suggested by the platform are picked by a particular company on the basis of the quality of their playlists and close fit with the brand, which incentivizes them in terms of effort to deliver the most suitable music sets and thus get rewarded in return. To facilitate this, Atmosphere invests in algorithms and models to create accurate brand profiles.

Furthermore, internal institutional arrangements are present in the form of ‘rules of the game’. Multiple curators are suggested to the client, who can make the final choice based on music samples. To stay ‘matched’ with a company, the chosen curator must continuously produce high quality work; otherwise, the company will switch to another curator. In terms of institutional environment factors, the legal environment of the business model poses the most significant threat, as songs are often copyrighted. Atmosphere has addressed this issue by acquiring the license rights for all the music that is available on its platform. This allows it to be used for commercial purposes. However, this is a continuous process; if Atmosphere wishes to attract and keep customers on its platform, it needs to constantly update its music offering.

Sources

Atmosphere. 2017. How We Work. [ONLINE] Available at: https://getatmosphere.com/how-we-work/. [Accessed 14 February 2017].

Carson, S. J., Devinney, T. M., Dowling, G. R., & John, G. (1999). Understanding institutional designs within marketing value systems. Journal of Marketing, 115-130.

Johansson, G., & Moradi, J. (2015). What Does Your Brand Sound Like?. [ONLINE] Available at: https://www.soundtrackyourbrand.com/static/content/press/what-does-your-brand-sound-like_pdf_eng.pdf. [Accessed 13 February 2017].

Kollekt.fm. 2017. Company Web Page. [ONLINE] Available at: http://kollekt.fm/. [Accessed 14 February 2017].

RetailTech. 2017. Artists Select Music For Retailers . [ONLINE] Available at: http://www.retailnews.nl/tech/8TtNf0gzR2OQ2jAgzIUdOQ-28/artiesten-selecteren-muziek-voor-retailers.html. [Accessed 14 February 2017].

Silicon Canals. 2017. Kollekt.fm’s Atmosphere will find the right tunes for every company. [ONLINE] Available at: http://siliconcanals.nl/news/startups/kollekt-fm-atmosphere-finds-the-right-tunes/. [Accessed 13 February 2017].

What are you going to eat tonight?


We all have that moment once in a while that we don’t want to cook. But also ordering at Deliveroo or Foodora doesn’t sound that attractive anymore, since you feel like a regular customer already. You miss the home cooked meals of your mother, but don’t want to spend hours in the kitchen to make an attempt of copying her dish. What to do? AirDnD offers the solution.

What is AirDnD?
AirDnD is founded in 2015 by Rob Lagendijk and his motive is simple: it provides amateur and home chefs – you, me, your neighbour – the possibility to start their own mini restaurant in their home. “This is the moment to participate in the share economy and food is hot” are the words of CEO and founder Rob. AirDnD stands for Air Drink ‘n Dine. The platform is intended for home chefs, not for entrepreneurs. Other people can enjoy a home cooked mail by one of their neighbours by looking for interesting dishes on the platform itself.

So, how does it work exactly?
The platform is a two-sided market and creates a community between home chefs and people who wants to go out for a lovely home cooked meal. It solely depends on the value creation of the users and they put the customer in charge! Home chefs can create their own page where they can state their menu card, the prices for their different kind of dishes and even mention when they are ‘open’. You can specify your profile by telling other people how you live, what you like and how your house looks like.

People who wants to eat are also creating a profile, so that they can look for a home chef in their neighbourhood. After finding the ideal chef, you can make a reservation on the site. And before you know it, you are at the table with a couple of strangers at one of your neighbour’s house enjoying a nice, home cooked meal!

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Home chefs determine their own price for their dishes. For €15 you can enjoy a “Fishy lunch” or pay some more for a four-course menu including wine. AirDnD is asking 10% for each reservation. So if a home chef is asking €15 for their dish, the guest will pay €16,50. The payments are done through the platform.

Challenges of new business idea’s
A new business idea is always facing some challenges. Like many other starters, take UBER or Airbnb for example, AirDnD is coping with these challenges. The biggest burden AirDnD has to cope with is the “Koninklijke Horeca Nederland”. Royal Horeca Netherlands (KHN) pursues its activities to the best possible business environment for the hospitality industry. They are scared that AirDnD will take the customers away from current restaurants. The KNH thinks that the home chefs who are using AirDnD must comply to the same rules as restaurants. Otherwise the competition is unfair they claim.

And now?
The founder of AirDnD is not worried about this challenges and believes in his idea. In the first couple of weeks there were already 700 home chefs registering on the site. Within a year they have grown to over 2000 different home chefs, opening up their house to strangers to enjoy a home cooked meal and they are still growing. The philosophy of AirDnD is simple: they just want to create a unique experience and offer great food for food lovers!

What do you think?
Will AirDnD be a succes? And will you make use of the opportunity to eat a lovely home cooked meal by one of your neighbors?

Sources
Tsekouras, D. (2017, 2 February). Introduction to Customer Centric Digital Commerce. Accessed on https://bb-app01.ict.eur.nl/webapps/blackboard/content/listContent.jsp?course_id=_29596_1&content_id=_165770_1

www.rtlnieuws.nl/editienl/dineren-bij-thuiskok-woonkamer-schoner-dan-restaurant
www.airdnd.nl/platform/Search?search=rotterdam
www.airdnd.nl
www.khn.nl/themas/belangenbehartiging
binnenland.eenvandaag.nl/tv-items/62883/horeca_vreest_valse_concurrentie_van_hobbykoks_airdnd

 

 

Open supplier innovation?


In class, it was stated that the best ideas in crowdsourcing come from people outside the topic or differently stated, without much knowledge on the good or service. In this post, I would like to take the opportunity to stress the influence of supplier involvement when discussing open innovation to generate ideas. Thus, using a different perspective, more B2B and upstream focused. Would it be helpful in idea generation to include knowledgeable suppliers?

In the article by Alexy et al. (2011), it was noticed that input delivered by suppliers was interesting as specific technical needs are known, resulting in higher quality ideas submitted. Therefore, concluding that signaling more requirements or restrictions to consumers could increase the number of valuable submissions. This could address an aspect also mentioned during the class, where companies (e.g., Philips and Dell) face issues with the quality delivered by submissions of the crowd.

First, supplier involvement can be considered as “the integration of the capabilities that suppliers can contribute to NPD projects” (Johnsen, 2009, p. 187).  A literature review by Johnsen (2009) states factors that successfully affect supplier involvement. The successful factors studied are supplier selection, supplier relationship development & adaption, and internal customer capabilities. These factors facilitate a shorter time for the product to enter the market as well as improve the product quality, and reduce development and product costs. More importantly, the review indicates that supplier involvement should be further studied in-depth as different thoughts on innovation related to the involvement of suppliers exist. Namely, the article states that existing suppliers could be too familiar with the product leading to limited innovation. Thus, in line with earlier mentioned, a ‘crowd’ without prior knowledge provides better solutions.

Later, a North American longitudinal study by Yeniyurt et al. (2014), specifically on supplier involvement in buyer’s NPD, indicates that among various aspects, buyer-supplier communication and suppliers’ trust of a buyer significantly influences the participation of a supplier towards co-innovation and supplier involvement in a buyer’s NPD. Furthermore, the study found that co-innovation as well as financial performance of both the supplier and buyer increases when suppliers are actively involved in the buyers NPD. Hence, more reasons supporting the involvement of suppliers when aiming to generate ideas.

A related business an example can be taken from the Unilever. In 2012, Unilever launched an ‘Open Innovation Submission Portal’ to collaborate with its suppliers. Currently, the platform is still perceived as successful and therefore, still operating and evolving (Procurementleaders, 2012; Unilever, 2017). The portal provides experts of certain processes to share and optimize products from their specialist or technical view.

All in all, I do believe that it is valuable for companies, aiming to be innovative, to include suppliers in generating ideas on product development. Not only to create submissions of higher quality, and a trustful relationship. Moreover, a broad and diverse crowd consisting of both consumers and suppliers might be optimal in order to include all viewpoints to generate the best value for the customer.

References

Alexy, O., Criscuolo, P., & Salter, A. (2011). No soliciting: strategies for managing unsolicited innovative ideas. California Management Review, 54(3), 116-139.

Johnsen, T., E., (2009). Supplier involvement in new product development and innovation: Taking stock and looking to the future. Journal of Purchasing and Supply Management, 15 (3), 187-197.

Yeniyurt, S., Henke, J.W., & Yalcinkaya, G. (2014) A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes. Journal of Academey of Marketing Science, 42, 291-308.

http://www.procurementleaders.com/news-archive/news-archive/unilever-expands-supplier-innovation-project

https://www.unilever.com/about/innovation/open-innovation/

 

Designing Warning Messages for Detecting Biased Online Product Recommendations: An Empirical Investigation


Companies might be inclined to recommend products with the highest profit rating or unsellable stock using recommendation agents. This paper presents and tests countermeasures for biased product recommendation agents. The researchers conducted an experiment in which they exposed users of an e-Commerce website with warning messages about the risks of relying on recommendations provided by the website in three different styles; a warning without advice, a warning with positively framed advice and a warning with negatively framed advice.

Warnings.png

All three of the methods led to an increased perceived bias by the users of the website in comparison to the control group, indicating that showing a warning message influences the choices a consumer makes after being warned.

The authors conclude that the best method to warn consumers about biased product recommendations is the negatively worded warning. This method led to the highest score of perceived bias by the users, and was the only method that did not increase the number of false positives reported by the users.

Strengths

The use of recommendation agents to recommend the most profitable product is a valid concern and widely discussed and proven in other research, providing a good practical example to start the research.

The authors have countered the biased recommendations using simple measures that could easily be implemented in the real world.

In the supplementary research the authors note that the number of users using the search-by-brand functionality to verify the suggestions made by the product recommendation system increased from 12.9% to 43.1%. This suggests that the users did not simple suggest bias, but actively used the tools at their disposal to verify the validity of the warning message.

Weaknesses

By using the perceived bias as the DV, the authors measured the opinion of the user whether they thought they were being tricked or not. This might have left out valuable results of people who were tricked but were not aware of it even after receiving the warning. Since the study contained relatively few choices, the authors could also have used the actual value for money rating of the selected products.  This would have provided a more accurate view of whether people were influenced by the biased recommendation system.

The proposed solution of a browser extension feels a bit too extensive. How many times do you need to be reminded to be wary of bias in product recommendations? A government issued cautionary commercial (SIRE in the Netherlands) could possibly achieve the same results by triggering people to think before trusting a recommendation.

Plan who you’ll cross paths with on Tripr


People like to travel together with family and friends. Tripr is a new way of experiencing this. It is an app in which you enter where you are travelling to and when is your trip. Besides this, it has a function like Tinder, you can put preferences for who you would like to meet during your trip. Tripr will then show users who will be in the same city during your given dates and who match your criteria. Because you are able to enter all these details before, you will be able to meet new travel mates months before your trip.

Continue reading Plan who you’ll cross paths with on Tripr

Crowdsourcing as solution to distant search


Crowdsourcing may have been around for a long time, but the advent of the Internet and other communication technologies has opened up many possibilities for the phenomenon to play out. Nowadays crowdsourcing plays a bigger role in strategic management than ever before. This paper adresses that under certain circumstances crowdsourcing transforms distant search into local search, improving the effectiveness of problem solving for firms. Under certain circumstances a firm may choose to crowdsource problem solving rather than solve the problem internally or contract it to a designated supplier.

These circumstances depend on several factors: the characteristics of the problem, the knowledge required for the solution, the crowd, and the solutions to be evaluated. In the paper, the authors compare the different forms (designated contractor, internal sourcing and crowdsourcing) for every aforementioned factor. By outlining the circumstances under which crowdsourcing may be a better mechanism for solving some problems, this article helps deepen our understanding of firm boundaries. However, the paper mainly highlights the circumstances in which crowdsourcing is the optimal form, but does not consider the consequences of crowdsourcing. The paper was lacking of considering the legal base of crowdsourcing, in most crowdsource cases there is no contract. Workers can run anytime they want, and an idea might be reused in anytime. If the authors would consider some (negative) consequences the paper would increase in reliability.

A related business example which can be linked to the article is the Netflix Prize. Adding this competition element, the Netflix example is a typical form of tournament-based crowdsourcing. In 2006, Neflix launched the Netflix Prize, “a machine learning and data mining competition for movie recommendations.” Netflix intention with the $1 million prize  was that it may encourage a range of algorithmic solutions to improve the company’s existing recommendation program, Cinematch, by 10%. The Netflix Prize demonstrates the power of crowdsourcing in developing innovative solutions for complex problems. Further, it is an interesting example of how setting various stages in the competition can help further push teams to achieve new success by combining their solutions with other contestants.

As mentioned above, the characteristics of the required solution knowledge, the problem to be solved, the crowd, and the solutions to be evaluated all have an impact on a focal agent’s probability of crowdsourcing a problem. Furthermore, the paper addresses that IT moderates that relation. How? The Internet facilitates the performance of tasks through crowdsourcing, which involves more arm’s-length transactions than traditional outsourcing to a designated contractor. The potential improvements in problem solving costs and effectiveness that come from crowdsourcing could have important consequences for both existing and emerging strategies.

References:

Afuah, A., & Tucci, C. (2012). Crowdsourcing as a solution to distant search. The Management Review

https://digit.hbs.org/submission/the-netflix-prize-crowdsourcing-to-improve-dvd-recommendations/

 

The Power of the Like button


Traditionally movie studios have used the same marketing strategies to promote their movies. Think about advertisements through different channels on the television, release announcements in the newspapers or even advertisement which are visible for us to see on different billboards. According to McKinsey the global cinema advertising expensive where approximately 2.1 billion US dollars in 2014. This amount is expected to grow up to 2.8 billion dollars in 2018. So, in the near future we can state that the advertising expediture will grow. From a logical perspective I would assume that companies are blessed with the arrival of different great social media platforms. These platforms have a gigantic reach where consumers make use of but also corporations. In the past consumers could only inform eachother about a certain product verbally or via letters. Nowadays, the consumer has a much greater reach due to social platforms such as Facebook etc. These platforms make it easier and also less expensive for us to communicate. Thus, companies should also make use of these platform to have less expenditures, right?

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To argue that the use of social media platforms can indeed decrease the advertisement expenditure and still increase box office performances I read an article about ‘the Power of the Like button’. The authors in this article state that before a certain movie is released the ‘likes’ of this prerelease have a signigicantly positive impact on box office performance. With box office performances the authors mean the opening week box office records. Thus, they state that a 1% increase in the number of ‘likes’ in the week prior to the release of the movie, is associated with an increase of the opening week box office records with 0,2% (Cheng et al, 2017). The authors did the research by firstly collecting data from the websites IMDb, Facebook and Box Office Mojo throughout the calendar year 2013. The data that they collected included movie-specific characteristic, ‘like’ activities on Facebook and the box office performance which is the amount of opening box office records. In the figure below you can see that the opening records of Star wars: The Force Awakens is roughly 248 billion US dollars.

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There are two main stages in which the generated data was analysed. Firstly the authors wanted to understand the relationship between prerealesed ‘likes’ and box office performances by running a cross-sectional regression.  Secondly the authors applied the Fama-McBeth regression to estimate the prerelease ‘like’ impact over time. It is interest to see that a 1% increase in ‘likes’ prior to the release of the movie indeed increased the opening week box office record with 0,2%. Even more interesting to see that the prerealesed ‘like’ effect becomes stronger as it approaches the release date. This research makes a huge contribution to businesses that are considering to use the Facebook like button as a marketing tool. On the other hand, this article does not take the popularity of the actors in the movies into consideration and it is not clear whether the results of this research apply for other products which are movie related.


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Sources:

Ding, C., Cheng, H., Duan, Y. and Jin, Y. (2017). The power of the “like” button: The impact of social media on box office. Decision Support Systems, 94, pp.77 84.

McKinsey & Company, Global media report 2015, 2015. http://www.mckinsey.com/industries/media-and-entertainment/our-insights/global-media-report-2015.(Accessed 16.08.17).

 

 

 

 

 

 

 

 

Create and vote on your favorite furniture designs on Made.com


Imagine you are moving into your first apartment. At that moment, it is finally possible to furnish the apartment to your own preference. However, when you start orienting for furniture, you discover that there are no options to be found that resemble the image of how the new apartment should look preferably. Moreover, the furniture is often expensive as well. That is why Made.com decided to create a community in which its customers can vote for the designs they want Made.com to produce.

Business model

Made.com is an online furniture retailer from England without warehouses and inventory. This allows the company to save costs. Instead of warehouses and inventory, they use crowdsourcing. The website allows members to submit designs. Whether the design will get produced, is determined by the number of votes it gets from members of the website. This is also a great opportunity to draw attention for designers who lack reputation (Goldsmith, 2010).

When a design is proved to be popular, Made.com makes it available for pre-order. The pieces are then shipped directly to the customer, which cuts costs (Graham, 2010). In the past years, Made.com has started opening showrooms that allow customers to view the products available on the website in real life.

Efficiency criteria

Made.com benefits from joint profitability because designers get paid 5% royalties on successful designs and members benefit from being able to vote for their preferred pieces. Value is therefore co-created by involving customers actively in the process of deciding which pieces should be produced. A situation is created in which customers will not tend to switch to competitors because they have more options with Made.com and because they buy the exact pieces they want from Made.com. Made.com, on its turn, benefits from knowing which pieces they will probably sell (Graham, 2010).

Made.com did, however, get negatively affected after Britain voted to leave the EU in 2016. The feasibility of required allocations is therefore far from optimal at the moment. The Brexit was a huge setback to technology founders who are very dependent of foreign developers and engineers. Hiring these skilled employees will now be even tougher than before, since it was already hard to find expertise within the United Kingdom. Moreover, 35% of the employees that are located in London, are European. There is a huge uncertainty whether these employees will be allowed to stay in London (Olson, 2016). It could be decided any moment that Europeans need certain visas, which would affect the positions of the current employees and would make hiring skilled workers from outside the UK even harder. It could take two years for Britain to leave the EU, which means years of uncertainty where Made.com will not know regulations will impact their business (Meyers, 2016). The political institutional environment has created this situation, and people involved with Made.com are also socially impacted. Brent Hoberman, co-founder of Made.com, has stated that people feel rejection and that the atmosphere at the headquarters is very depressing (Olson, 2016).

The above illustrates that companies can be heavily impacted by its institutional environment, and that companies sometimes have little power to prevent such threats.

 

http://www.bbc.com/news/business-11437839

http://www.cbsnews.com/news/madecom-crowdsourcing-furniture-stocks/

http://www.forbes.com/sites/parmyolson/2016/06/24/u-k-tech-startups-stunned-by-brexit-vote/#25959a18a5b1

http://fortune.com/2016/06/24/brexit-tech-impact/

DogVacay -The perfect solution for a man’s best friend


Weekend getaways have becoming increasingly popular in recent years. Rightfully so, as it gives people a quick escape from their busy, and maybe even stressful, day-to-day life. Unfortunately, for some this is less easily planned than for others. Take for example dog owners. It is not as easy for them to book that last-minute deal they just saw online, as they have to arrange for a place to stay for their beloved canine. Possibly they could ask one of their family members or a good friend to look after their pet, or they could consider bringing their dog to the kennel. However, this may be an imposition on some people, or if friends are willing, they may not know how to properly look after your dog. Sure, a kennel usually employs professional dog sitters, but then you are stuck with a bill that is larger than the cost of your weekend getaway! Even when money is not an issue, some dog owners have come home to traumatized pets after their stay at a kennel.

This last incident is exactly what prompted Aaron Hirschhorn and Karine Nissim to open up their home to other people’s dogs. After putting up a listing on Yelp called Aaron’s Dog Boarding in 2011, the couple realized that there was indeed a large demand for their services and that good money could be earnt with their business. This is when Aaron and Karine decided to scale things up. They reinvented their business model from pet sitting themselves to operating a platform on which dog sitters and dog owners are brought together, and so DogVacay was born. DogVacay is thus a two-sided marketplace, which has enjoyed great network-effects over the past years. Currently, 40,000 dog sitters across the U.S. are registered on the platform, making DogVacay the leading online platform in its niche industry. 

DogVacay works as follows. Dog lovers can apply to become a sitter on the platform, however Aaron and Kate ensure their capability through a strict screening process. In order to become a DogVacay Host, applicant must pass interviews, video training, and a reference check. In turn, sitters can set their own rates, schedule, and preferred dog breed. In addition, they have access to 24/7 customer support. Dog owners on the other hand, can search for the perfect sitter simply by entering their zip code. They can select their DogVacay Host based on their profile, which includes a short biography, rating, reviews, number of repeat visits, and whether they own a dog themselves. Furthermore, every reservation is covered with premium pet insurance, which thus takes the legal aspect into consideration. DogVacay also encourages both parties to meet up beforehand to guarantee a perfect fit and a happy stay. The platform itself generates revenues by taking a 15% percentage cut from the transaction. With a revenue stream of $70mln in 2016, DogVacay is expecting to hit profitability this year. Currently rated 4.97 out of 5 stars, is there really any better alternative out there for a man’s best friend?

 

Drinking beer for science: Which brew is the best?


Who doesn’t want to taste a beer that has been chosen as best beer amongst a crowd of over 25,000 people from all across the USA? In 2012, Budweiser introduced Project 12. The American brewer challenged its twelve brewmasters to create a unique beer recipe. Only one could be the winner, resulting in the Budweiser Black Crown.

Project 12 is a typical crowdsourcing project. As the name describes, crowdsourcing is a type of outsourcing, utilizing a crowd of people instead of an external organization (Howe, 2006). Since the introduction of the concept in 2006, the technology industry was one of the early adopters. However, in the last couple of years, this industry has been overtaken by the fast-moving customer goods (FMCG) industry (Roth et al., 2015). The evolution of crowdsourcing usage per sector is depicted in Figure 1 (Roth et al, 2015).

graph-crowdsourcing

Figure 1: Evolution of crowdsourcing usage

Crowd consultation

Companies can use different ways to exploit the crowd. The main purposes for crowdsourcing are problem solving, gathering ideas, collecting designs, and outsourcing tasks. With problem solving and ideation contests, the crowd comes up with the ideas and solutions. Decisions on the results are often done internally by companies. Budweiser used a variation on this crowdsourcing model. The brewer created the beers itself (the ‘’ideas’’ / ‘’solutions’’), and used the crowd as consultants (‘’decision makers’’). Hence, the company reversed the typical crowdsourcing model. In summer of 2012, the company traveled across the USA to get in contact with thousands of customers at local events, festivals, and other activities to gather opinions. As such, the participants acted as consultants for Budweiser.

Project 12

In 2012, Budweiser asked twelve of its brewmasters, located in the USA, to create a distinctive beer recipe worthy of the Budweiser name. The beer recipe had to be inspired by regional influences of their brewing location. Out of these twelve, six beers were chosen to join the Budweiser brewers on their tour across America. Consumers with many different backgrounds had the opportunity to taste the different beers and rate them on taste, flavor, freshness, and style before picking their favorites. A summer-long sampling program resulted in the biggest focus group in brand history, maybe even beer history, according to AB InBev, parent company of Budweiser (Brady, 2012). See the video below about Project 12.

There can be only one

Eventually, three brews were distributed in limited edition. One of them was the winner, called ‘Black Crown’. Each beer was named after the zipcode of the brewery location it was created. The  winning beer was introduced using TV ads and even a 30-second Super Bowl commercial. However, the question is whether this expensive marketing tools were really necessary, since Project 12 was already a marketing tool itself. Crowdsourcing projects namely have an advantage that the crowd becomes eager for the product to come out. Participants already become brand ambassadors through spreading the word during the project (IdeaConnection, 2014).

Whether these marketing expenses were really necessary or not, Project 12 turned out to be really successful. The success was so enormous that the brewer decided to launch a similar project the following year (IdeaConnection, 2014). Hence, Budweiser benefitted from their crowdsourcing strategy.

Nowadays, Budweiser is still the most important brand of Ab InBev (largest brewer worldwide), and is even the best selling beer in America (Statista, 2016). That’s why Budweiser is called ‘’The King of Beers’’.

References

Howe, J. (2006). The rise of crowdsourcing. Wired magazine14(6), 1-4.

Roth, Y., Pétavy, F., & Céré, J. (2015). The state of crowdsourcing in 2015. eYeka Analyst Report.

Brady, S. (2012), AB InBev Woos Beer-Drinkers With Crowdsourced, Locally Developed Bud Flavors, brandchannel [Accessed 17-02-2017 from: http://brandchannel.com/2012/11/05/ab-inbev-woos-beer-drinkers-with-crowdsourced-locally-developed-bud-flavors/].

IdeaConnection (2014), Crowdsourcing a New Beer Bevarage with Budweiser [Accessed 17-02-2017 from: https://www.ideaconnection.com/open-innovation-success/Crowdsourcing-a-New-Beer-Beverage-with-Budweiser-00510.html]

IdeaScale (2017), Crowdsourcing Ideation [Accessed 17-02-2017 from: https://ideascale.com/service/crowdsourcing-ideation-2/].

Statista (2016), Sales of the leading domestic beer brands of the United States in 2016 [Accessed 17-02-2017 from: https://www.statista.com/statistics/188723/top-domestic-beer-brands-in-the-united-states/].

THE IMPACT OF DISPLAY ADVERTISING ON ONLINE CONSUMER BEHAVIOR


Advertising can be a profitable business and in the United States alone, advertising is a $200 billion industry. As consumers, we are all exposed to advertising on a daily base, either on the TV, via e-mail, social networks, or through other related online content. Yet advertising remains poorly understood by economists. This is mainly because offline data has been insufficient for business and academics to measure the true impact of advertising on consumer purchasing behavior (Lewis et al., 2014). In 2013, for the first time in the history of advertising in the United States, digital advertising surpassed TV broadcast advertising, which for a long period of time has been considered the best mass-marketing medium (IAB, 2014).

Because now a day people are more and more online and get more often exposed to online digital advertising, a lot of valuable data is generated which allows businesses and academics to reduce the information gap that is present in the advertising world.
In this study, Ghose & Todri-Adamopuolos (2016) go beyond the existing literature and with the use of individual-level data, research the effectiveness of online display advertising and the effects display advertising has on different consumer behaviors online. Studying the latter is a novelty compared to historical research of display advertising. In this case to understand consumers’ response to advertising, not just a probable exposure to it, often simple proxies were used like click-through-rates. Ghose & Todri-Adamopuolos (2016) surpass these relative simple methods and proxies and use an experimental framework that allows to compare the online behavior of two groups of users: those who view the display advertisements and those who do not view the display advertisements. What the data shows is that if consumers are just exposed to display advertisement this already significantly increases the interest of consumers to search for the displayed brand or product. Subsequently, the increased interest results in either active online searching for the product/brand or an increased likelihood to click on a related future display advertisement. Secondly, the longer a consumer looks at the advertisement the higher the probability a consumer goes directly to the website of the specific brand or product (36% bigger chance than average) instead of using search engines like google. Lastly, after seeing a display advertisement consumers are 7,1% more likely to buy the advertised product.

Practical implications for business

Ghose & Todri-Adamopuolos (2016) propose a model that demonstrates how advertisers can divide resources across the different types of display advertising. This model allows advertisers to use big data analytics in order to move advertising budget from less effective and cost efficient channels/media towards more effective advertising and increase the overall effectiveness and return on investment of the digital marketing strategy.  Furthermore, as the results signal that search advertising exposure only happens in a consumer’s funnel path after the consumer launches a search session that shows his or her interest for a brand/product, it is important for advertisers who would like to control the presence and the frequency of search advertising exposures that they examine what triggers consumers to initiate a search session before examining anything else. Lastly, it is important that potential consumers are targeted by businesses sooner in their shopping journey, as this could increase the effectiveness of the advertisements up to four times.

References

Ghose, A., & Todri, V. (2015). Towards a Digital Attribution Model: Measuring the Impact of Display Advertising on Online Consumer Behavior. (pp. 889-910) MIS Quarterly

Interactive Advertising Bureau (IAB). 2014. “IAB Internet Advertising Revenue Report: 2013 Full Year Results,” PricewaterhouseCoopers LLP.

Lewis, R., Rao, J. M., & Reiley, D. H. (2014). Measuring the effects of advertising: The digital frontier. In Economic Analysis of the Digital Economy (pp. 191-218). University of Chicago Press.

Research Framework, Strategies, And Applications Of Intelligent Agent Technologies (IATs) In Marketing


What is an agent?

Anything that perceives its environment through sensors and in return acts upon it(Russell and Norvig 1995).

What is an intelligent agent? An agent that displays machine learning abilities.

Does perhaps Amazon Alexa, Apple’s Siri, Google Assistant, Microsoft’s Cortana ring a bell?

In “Research framework, strategies, and applications of intelligent agent technologies (IATs) in marketing applied” the authors attempt to define how are these intelligent agent technologies used in the context of marketing and how can marketers understand and exploiting them. First step towards that direction was to try and establish a marketing centric definition. Hence, Intelligent Agent Technologies are according to authors:

Systems that operate in a complex dynamic environment and continuously perform marketing functions such as:

  • dynamically and continuously gathering any data that could influence marketing decisions
  • analyzing and learning from data to provide solutions/suggestions
  • implementing customer-focused strategies that create value (for customers and firms)

The second step was to classify all marketing applications of IATs in a way that would demonstrate relationships and differences among them. A useful and understandable tool for researchers and managers, the proposed marketing taxonomy is depicted below:

 

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To answer all these research questions the authors reviewed the existing literature and then conducted 100 in depth interviews with managers form 50 randomly selected companies. Two independent researchers analyzed the interview data, that were then used to shape the taxonomy and the below framework.They also made some propositions that would help researchers and mainly managers to utilize IATs and ultimately drive company performance.

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Overall, implementing the right IAT can assist the progress of numerous marketing functions permitting companies to achieve a sustainable competitive advantage. Both firms and customers can benefit from them. Companies are in a position to understand and put customers’ interest first (through collaborative filtering, personalization, recommendation systems) and in return gain customer loyalty and trust.On the other hand IATs offer consumers value, by providing them with convenience, better information, customized selection and less information overload (e.g price-comparison engines or agents that configure and customize their computer systems on the basis of their preferences).

Strengths and Weaknesses:

%ce%b4%ce%b9%ce%b1%cf%86%ce%ac%ce%bd%ce%b5%ce%b9%ce%b11Since there was no concrete research or a fully developed theory surrounding IATs in marketing and subsequently no certain phenomena or existing theoretical frameworks to test, the authors rightfully opted for the grounded theory approach.So in contrast to the traditional research method they tried to construct a theory by discerning which ideas and concepts are repeatedly used in the interview data. These patterns were then grouped into categories that formulated their theory and shaped both the taxonomy and the framework.

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Although the authors reasonably based their analysis on grounded theory, whether they applied it correctly is another question. The fact that they reviewed the existing literature in order to formulate the interview questions somehow conflict with the grounded theory methodology. The goal of this approach is to discern natural patterns. However, the used questionnaires possibly inhibited this since they kind of predisposed the managers’ answers since the queries were literature related.

%ce%b4%ce%b9%ce%b1%cf%86%ce%ac%ce%bd%ce%b5%ce%b9%ce%b13Given further progress in recommender systems (or other means of reducing costs for the customer), a situation might arise in which a “ready-made” solution provided by the system delivers higher preference fit than a customer-designed product—which, on the other hand, delivers the advantage of enabling “I designed it myself” feelings.” (Franke, N., Schreier, M. and Kaiser, U, 2010). This poses a very serious question for companies. When it is preferable to let an agent customize, decide or recommend a product/website? How quickly and how frequently should the agents respond and adjust to user needs? Ultimately what is more beneficial for both parties, implementing agents or give consumers the freedom to tailor products and and websites to their needs. Perhaps, technological advancements and the machine learning capabilities of IATs could soon enable companies them to successfully distinct these two categories of consumers and accordingly present them the proper interface.

 

References:

Franke, N., Schreier, M. and Kaiser, U. (2010). The “I Designed It Myself” Effect in Mass Customization. Management Science, 56(1), pp.125-140.

Kumar, V., Dixit, A., Javalgi, R. and Dass, M. (2015). Research framework, strategies, and applications of intelligent agent technologies (IATs) in marketing. Journal of the Academy of Marketing Science, 44(1), pp.24-45.

Russell, S. and Norvig, P. (1995). Artificial Intelligence: A Modern Approach. 1st ed. Prentice Hall, p.31.

Citizen science: Crowdsourcing Scientific Knowledge


Citizen Science

crowdsourcing-quote

 

 

 

 

Nowadays you can pretty much crowdsource anything from statistical analysis (Kaggle) to Graphic Design (99Designs), whatever you want help with you can find it online. But science is probably not the first thing on peoples’ mind when they think of this phenomenon. Science has an image of being a restricted activity, that requires specific knowledge and skills. Scientists are smart people locked away in laboratories or universities. citizen-scienceWe believe science is our most reliable system of gaining new knowledge and should be reserved for special people who are trained for it. However, nothing is further from the truth according to citizen science (also called crowd science and/or amateur science). Citizen science projects can be very diverse and can serve both specific research questions and open-ended data collection (Lukyanenko, et al., 2016).

Drawbacks

Citizen science has been met with some criticism, including issues with data quality and ethics.

Data Quality

Is citizen science reliable? crossed-fingersThis is, of course, a valid question and the corresponding answer could fill a blog post on its own. To give a short answer: yes, in most cases (Galloway et al., 2006). When scientists use citizen science in their research, they can take different actions to ensure data quality. For example, they could provide training/close supervision to the participants, of course keeping in mind the time/costs incurred with this.
Furthermore, scientists can cross-check for consistency with existing literature or with their own previous observations and last but not least the task that is asked to the public could be simplified to the point ‘little can go wrong’ (Riesch, et al., 2014). Actions that are appropriate to take of course depend on the characteristics of each research and ultimately need to be decided and justified by the researchers themselves.

Ethicsnobodyhiredyou

An obvious problem in citizen science is the accreditation of research results. In some projects, the involvement of participants is high and requires a lot of time and/or effort making their contribution to the research quite substantial. Ownership of data should be clearly defined beforehand and considerations regarding accreditation should be handled in a fair manner and communicated explicitly before participation.

Benefits

Citizen science of course also has significant benefits including increasing accessibility of science, changes in science literacy, providing a different perspective and the possibility to analyze larger datasets.

Accessibility

As mentioned before the term science and research can sound intimidating, especially for ‘outsiders’. Citizen science can help people ‘ease into’ the world of science in a manageable manner. It helps make research more inclusive (Lukyanenko, et al., 2016). This inclusiveness, in turn, can increase interest for science in general, change people’s views and can persuade more people to study and/or work in any field of science.

 Science Literacy

There is some debate about this but studies have shown that participating in citizen science can increase science literacy and familiarity with the scientific method (Cronje, Rohlinger, Crall & Newman, 2011).

Perspective

Since most participants in citizen science lack academic scientific education, they can offer a new perspective on issues/research which can be useful to explore new options, help studies advance after problems have occurred and/or offer future research ideas (Lukyanenko, et al., 2016). By including a larger group of people, the group most likely also becomes more diverse and thus also more diverse in terms of knowledge (Raddick et al., 2013).

Larger datasets
mydataisbigger

By outsourcing some of the data analysis larger data sets can be included in studies. Of course computers also have the power to analyze large data sets, however, some tasks require capabilities that humans are more efficient in such as image and sound analysis (Fleming, 2001).

Examples of current applications of

citizen science

Bird research

Citizen science projects have made a serious contribution to scientific knowledge (Ceccaroni, 2016). For example, it has helped examine the distribution of bird populations (Cooper et al. 2007, Bonter and Harvey 2008, Bonter et al. 2009), the influence of environmental change on birds’ breeding behavior (Hames et al., 2002a) and the effect of acid rain on bird population (Hames et al. 2002b).

Scistarter.com

scistarter.png
Scistarter is a website stimulating people to learn about, participate in and contribute to science. Their goal is to create a place in which there is an open communication between citizens and scientists. It is an online database of current citizen science projects and acts as a link between interested citizens and researchers in need of these citizens (“About Us”, 2017).

                                                                                                                                

galaxy-zooGalaxy Zoo

This is possibly the most famous example of an online citizen science project. It is a crowdsourced astronomy project in which people can help classify galaxies. It launched on the 11th of July 2007 and collected more than 50 million during its first year. To date is has gone through 13 different ‘rounds’ each focusing on a different task/image set (“Story”, 2017). The data collected has been used in many studies and contributes greatly to a better understanding of the phenomenon (Raddick et al., 2013).

References:

About Us. (2017). SciStarter. Retrieved 15 February 2017, from https://scistarter.com/about

Bonter DN, Harvey MG. 2008. Winter survey data reveal rangewide dedine in Evening Grosbeak populations.The Condor 110: 376–381. BioOne

Bonter DN, Zuckerberg B, Dickinson JL. 2009. Invasive birds in a novel landscape: Habitat associations and effects on established species. Ecography.doi:10.1111/j.1600-0587.2009.06017.x

Ceccaroni, L. (2016). Analyzing the role of citizen science in modern research (1st ed.). IGI Global.

Cooper CB, Dickinson J, Phillips TB, Bonney R. 2007. Citizen science as a tool for conservation in residential ecosystems. Ecology and Society 12: 11.

Cronje, R., Rohlinger, S., Crall, A., & Newman, G. (2011). Does Participation in Citizen Science Improve Scientific Literacy?. Applied Environmental Education & Communication, 10(3), 135-145. doi:10.1080/1533015x.2011.603611

Estelles Arolas, E., Gonzalez Ladron de Guerra, F., 2012. Towards an integrated crowdsourcing definition, Journal of Information Science 38 (2), 189-200.

Fleming, L., 2001. Recombinant uncertainty in technological search. Management Science 47 (1), 117–132

Galloway, A. W. E., Tudor, M. T. and Haegen, W. M. V. (2006), The Reliability of Citizen Science: A Case Study of Oregon White Oak Stand Surveys. Wildlife Society Bulletin, 34: 1425–1429. doi:10.2193/0091-7648(2006)34[1425:TROCSA]2.0.CO;2

Hames RS, Rosenberg K, Lowe JD, Barker S, Dhondt AA. 2002a. Effects of forest fragmentation on tanager and thrush species in eastern and western North America. Pages 81–91 in George L, Dobkins DS, eds. The Effects of Habitat Fragmentation on Birds in Western Landscapes: Contrasts with Paradigms from the Eastern United States, vol. 25. Cooper Ornithological Society.

Hames RS, Rosenberg K, Lowe JD, Barker S, Dhondt AA. 2002b. Adverse effects of acid rain on the distribution of the wood thrush Hylocichla mustelina in North America. Proceedings of the National Academy of Sciences 99: 11235–11240. CrossRefPubMed

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Riesch, H. and Potter, C., (2014) Citizen science as seen by scientists: Methodological, epistemological and ethical dimensions, Public Understanding of Science 23 (1) : 107-120Jordan

Jordan Raddick; G. Bracey; P. L. Gay; C. J. Lintott; C. Cardamone; P. Murray; K. Schawinski; A.S. Szalay; J. Vandenberg (2013). “Galaxy Zoo: Motivations of Citizen Scientists”.

Jordan Raddick; G. Bracey; P. L. Gay; C. J. Lintott; C. Cardamone; P. Murray; K. Schawinski; A.S. Szalay; J. Vandenberg (2013). “Galaxy Zoo: Motivations of Citizen Scientists”.

Serrano, F. (2013). Green Paper on Citizen Science. Citizen Science for Europe: Towards a better society of empowered citizens and enhanced research.

Story. (2017). Galaxyzoo.org. Retrieved 15 February 2017, from https://www.galaxyzoo.org/#/story

 

 

Share a ride TOOGETHER


In times of sustainability, the increasing importance of mobility, and the environmental issues the use of vehicles is still the most important way to go to work. A big irritation to motorists are the traffic jams caused by the increasing use of the car. Moreover, the limited parking areas frustrates the motorist. Regardless of the distance to their final destination, the motorist’s first choice is still using their car. The use of the car and especially the traffic jams causes a lot of environmental issues. When we hate the traffic jams, are frustrated by the limited parking areas and we know using the car is harmful to the environment, why do we simply keep using such manners to go to work?

Toogether finds this gap in the market and offers a solution. Toogether is a platform that makes it very easy to get together and share a ride. How does it work? Instead of driving to work on your own, despite the remaining seats in the car, Toogether offers a possibility to travel together. This has consequences regarding the reducing of traffic jams, reduced limited parking areas and finally reduced emission of co2. Toogether provides an overview of where all of the colleagues are living (especially colleagues living nearby) and offers the possibility to make an appointment to drive together with the particular colleague. As user of the platform you have to create your own profile and Toogether provides matches based on the desired destination, the location, and the associated travel time. An additional benefit of this platform is cost sharing, since the users split the gasoline costs.

Toogether is an innovative startup which uses the concept of co-value creation. According to Prahalad & Ramaswamy (2004) co creation is a management initiative that brings different parties together in order to produce a mutually valued outcome. Furthermore, Lusch and Vargo (2006) defines co creation of value as a desired goal as it can assist firms in highlighting the customer’s or consumer’s point of view and in improving the front-end process of identifying customers’ needs and wants. Both definitions are in line with the concept of Toogether, which provides a mutually valued outcome to multiple parties and accomplish their needs. On the one hand motorists denounces the traffic jams and limiting parking areas’ which accomplish the motorist needs, and on the other hand solving the mobility problem ensures reducing environmental issues which create sustainable value to all of us (government, population and organizations).

When the users of the platform increases, there is more and more data available of each user. We can think about data regarding to travel routes and peaking hours. When all of these data could be analyzed the company could offer more specific recommendations and finally increases the customer satisfaction. More specifically, users create value for themselves and for the Toogether when they are commonly uses the platform. Like aforementioned, Toogether needs their users to accomplish such goals. This is in accordance with the theory towards co value creation which emphasized that no single firm can create anything of value without the engagement of individuals (Prahalad, C.K. & Ramaswamy, V. (2004).

References

Lusch, R. P., & Vargo, S. L. (2006). The service dominant logic of marketing: Dialog, debate and directions. Armonk, NY: M.I. Sharpe.

Prahalad, C. K., & Ramaswamy, V. (2004). The future of competition: Creating unique value with customers. Boston, MA: Harvard Business School Press

Grrrowd: The outsourcing of justice


When people think about crowdsourcing, they will often associate this with companies asking their customers to help them with innovative business ideas. However, it is a lot more than that. Crowdsourcing is used by companies to solve problems; generate ideas; design (logo’s, etc.) and for the outsourcing of tasks. This seems logical; companies utilizing the ‘wisdom of the crowd’ in order to come up with novel business ideas. The pros and cons of crowdsourcing are known by the companies that use this phenomenon. The pros of outsourcing obvious; you will generate a lot of ideas, in a short period of time and at a low cost. On the other hand, the cons might be less obvious. Although, the generating of ideas will go fast and with high volume it is often the case that only a small fraction can even be considered. Many of the ideas are simply not realizable by the firm, due to costs; brand image or other factors.

In 2014 there arose another application of the ‘crowdsourcing’-principle. Greenpeace came up with the idea to crowd source activism. This new application of crowdsourcing has not been seen before. It can be considered as a kind of ‘kickstarter’ for justice. In other words, Greenpeace offers potential users; considering the well-being of our planet, initiatives to participate in their activism. They have created a platform on which people can contribute to specific activism projects. They call this ‘the outsourcing of justice’. Examples of project in which people can invest are; A case to block the Ibutho coal company’s application for mining rights in the oldest proclaimed nature reserve in Africa; A case from a coffee farmer in Uganda who has been thrown off his land; A case to stop manufacturers of Genetically Modified Corn from invading the country where corn was born. (greenpeace.org)

The first case that was described above was an initiative to participate in blocking the activities of a coal company in a nature reserve in Africa. The coal company and their way of earning money would be a direct threat to the inhabitants of this nature reserve. This nature reserve was home to the greatest rhino population in the world and was the last 1% true wilderness in South-Africa. (greenpeace.org) People could visit the platform and just as with Kickstarter, donate money for the specific cause.

Greenpeace has been the first company, within this domain, which has made use of crowd sourcing in order to achieve a greater goal. It was not only possible to donate money for specific causes, but also to ask attention for these causes by re-posting the cause on social media. As they specify it themselves: “Grrrowd is founded in the belief that the special interests that drive environmental destruction and human injustice can be defeated by the power of the crowd”. (greenpeace.org) I think it is great initiative to make use crowd sourcing in this context. Not only will they obtain money for their activism, but people might also be encouraged to ask attention for specific causes which they find important. This is different from the conventional way in which companies like Greenpeace obtain money. Normally, they will ask you to subscribe and donate a fixed amount of money monthly. In this new initiative, people can still donate money. However, the money is directly associated with a specific goal that these donators consider as important. This will add a personal touch to activism, also creating synergies by the use of social media. After all, you are not just asking money for the good cause; but also helping Greenpeace get attention for specific causes.

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