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Create Your Own Chocolate

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“Customized Chocolate Bars Like No Other”

Have you ever wanted to create your own chocolate bar? Chocri is the worlds first company which allows comsumers to create their own chocolate bar by allowing users to choose from four bases and over 100 toppings. When you read this, you probably think: “I could make that! What is so special about it?” However, most of us can probably not even be bothered to actual create chocolate bars due to the time and effort it takes. This is the unique aspect of Chocri, it makes the process of creating your own chocolate bars fun! Chocri was founded in Berlin, Germany in 2008 by Franz Duge and Michael Bruck and it has been a very successful example is mass customization. In essence, Chocri is an online configurator where customers can design their own chocolate bar which is then produced by Chocri with techniques and costs comparable to mass production.

According to Chocri, the combination of 4 bases and more than 100 topics allows for more than 27 billion combinations. The configuration process of Chocri chocolate bars encompasses the several steps. First, customers have to choose the base of the chocolate bar (dark chocolate, milk chocolate, white chocolate or a combination of the three). Second, customers can add up to five topics. There are six different topping categories: fruit, spices, nuts, confections, decor and grains. In addition, Chocri sometines also includes seasonal categories.

The step of choosing toppings is probably a step which a lot of (creative) people will enjoy as it allows customers to explore their creativity. The pictures of the toppings is shown together with the chocolate base to allow the users to see how the final product will look like. This is an important feature for customers creating a present as it shows how good or bad the final product will look like. In addition, clicking on the names of the toppings provides customers with educational and entertaining descriptions (which might inspire customers for the name of their chocolate bar).

However, research has shown that  too much choice can be demotivating. Barry Schwartz (2004) has written a book which is focused on the Paradox of Choice: Why More is Less. In the book, Schwartz argues that eliminating consumer choices can greatly reduce anxiety for shoppers.

Autonomy and Freedom of choice are critical to ourwell being, and choice is critical to freedom and autonomy. Nonetheless, though modern Americans have more choice than any group of people ever has before, and thus, presumably, more freedom and autonomy, we don’t seem to be benefiting from it psychologically.

(Schwartz, 2004)

In the context of Chocri, 27 billion combinations may be too much to handle and it may take the fun out of the configuration process. Moreover, some people need to get inspired first as they find it too difficult to create something from scratch. Therefore, Chocri has a page of recommended creations and top five bar names of the week listed on their blog. Not only can this recommendation page reduce anxiety and inspire less-creative people, it can also form a rewarding prospect for other customers as they see their creations being promoted by Chocri to other people. Recognition is a very powerful reward and can actually be more rewarding than monetary rewards as recognition directly caters to someone intrinsic motivations rather than someone’s extrinsic motivations.

After customers have created their chocolate bars, customers can choose a name for their chocolate bars and have the chocolate bars delivered to their home address. The price range of creating a chocolate bar is between $10 and $15 depending on the chosen toppings. The chocolate bars are delivered in beautiful red boxes which appears to be very professional and maybe even look too good to be opened. Moreover, the bars themselves look very professional. The toppings will be arranged beautifully by Chocri and not just randomly put on the chocolate bars with adds to professional look of the chocolate bar. The boxes also have a code on the etiquette which allows you (or your friends) to re-order your creation.

In sum, Chocri is successful and delicious example of co-creation.

Sources:

http://www.createyourownchocolate.com

http://en.wikipedia.org/wiki/The_Paradox_of_Choice

Schwarz, B. (2004). The Paradox of Choice. Harper Perennial, 2004, paperback (ISBN 0060005688)

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Co-Creation of Innovation in A Virtual World

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Ward and Sonneborn (2009) and Rogers (2003) acknowledge that the emergence of web-based technologies has radically influenced the ways in which individuals around the world communicate, represent themselves, share ideas, and otherwise interact with one another. Virtual worlds allow users to engage in a very active and participatory form of co-creation which is impossible to replicate in other environments (e.g., blogs, social networking websites). An example of a virtual world is Second Life, which is a 3D world where everyone can see you as a real person and where you can visit places which were built by people like you. Second Life allows you to express yourself. You can design a 3D version of yourself or create a whole new persona. There are thousands of designer items designed and sold by other people which can be explored in the Second Life marketplace.

Due to engaging nature of virtual worlds like Second Life, it allows companies to engage customers in a new way of co-creation. In fact, the world of Second Life itself can be defined as a co-creation project as many of the worlds are created by Second Life users themselves. The motto of Second Life is:

“The largest-ever 3D virtual world created entirely by its users.”

Linden Labs (the developer of Second Life) provides users with a 3D building environment which is easy to use and allows users to collaborate with other users to create their world. Users can use scripts to add behaviors and animation to their creations and make them come to live. Creations can also be sold inside Second Life or on Xstreet SL.

Second Life can be used as a virtual shopping tool which many small companies have already realized as you can find many small businesses on Second Life. Some people have actually shut down their real-world businesses to open a business in Second Life (and are able to make a living out of it).

However, it is not easy to create a co-creating virtual world nor is it easy to participate in one. A study by O’Riordan, Adam and O’Reilly provides three recommendations:

The first recommendation for innovation co-creators is to ensure that sufficient time is taken to fully explore virtual worlds. Virtual world designers can make this process easier for innovation co-creators by ensuring that there is support for in-world exploration. For example, information about particular projects in Second Life is often shared in-world by word of mouth. The reason for this is that existing search and navigation mechanisms in Second Life are difficult to use (especially for new users) because the mechanisms have been created for particular purposes as necessary. One way to stimulate the diffusion of innovations and information through in-world communication channels would be to develop new community-level mechanisms which provide consistency and ease.

The second recommendation for innovation co-creators is to ensure that sufficient practical knowledge of virtual worlds is available. People tend to dislike to have to put in a lot of effort to acquire information. Virtual world designers should attempt to minimize the effort required to acquire practical knowledge. For example, virtual world designers could accelerate learning by developing and promoting high-quality in-world training courses for (potential) innovation co-creators. An interesting example of how a company uses Second Life to generate ideas is Xerox. The following video shows an avatar of Xerox introducing itself and explaining how Xerox generates ideas with the help of Second Life and explains how innovation co-creators can get in touch with them.

The third recommendation for innovation co-creators is to focus on tools and techniques that support self-reliance in teams. Virtual world designers should continue to ensure that individuals and teams can work effectively and autonomously because of the unique challenges associated with fully leveraging the collaborative affordances of virtual worlds (short term). Moreover, virtual designers must develop a robust understanding of the barriers preventing fully collaborative approaches to innovation co-creation in virtual worlds (long term).

Overall the study supports the view that virtual worlds are attractive for innovation co-creation. However, the authors acknowledge that more research needs to be done on how virtual world designers can leverage the collaborative affordances of virtual worlds.

The blog post is meant to provide an example of a new way of value co-creation. The key message of this blog post is that virtual worlds form the new frontier and, therefore, the affordances it has to offer have to be studied thoroughly by researchers AND by companies.

Sources:

O’Riordan, Niamh; Adam, Frédéric; and O’Reilly, Philip, “INNOVATION CO-CREATION IN A VIRTUAL WORLD” (2012). ECIS 2012 Proceedings. Paper 191. Available at: http://www.academia.edu/5615764/Innovation_Co-Creation_in_a_Virtual_World.
Rogers, E., M. (2003) Diffusion of Innovations. , New York, Free Press.
Ward, T. B. & Sonneborn, M. S. (2009) Creative Expression in Virtual Worlds: Imitation, Imagination and Individualized Collaboration. Psychology of Aesthetics, Creativity and the Arts, 3, 211-221.

Second Life (www.secondlife.com)

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Advertising: Stimulant or Suppressant of Online Word of Mouth?

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Word of mouth can be defined as informal communication among consumers about products and services. It includes interpersonal conversation and consumer brand advocacy. More recently, an increase can be seen in online word of mouth, otherwise known as word of mouse. Examples of word of mouse are discussion forums, boycott Websites and news groups.

Marketing research indicates that word of mouse can play an important role in influencing consumers’ purchase behavior. Therefore, some researchers believe that word of mouth should become an integral part of every company’s communications mix. The assumption in literature appears to be that word of mouth and advertising can serve as complements of each other. The paper by Feng and Papatla focuses on the relationship between online word of mouth and advertising. Their goal is to study whether increased advertising is negatively correlated with online word of mouth. They propose several reasons for the negative correlation between the two variables:

  • Consumer involvement relates to the argument by Dichter (1966) which argues that consumers’ desire to speak to other consumers about products can be understood in terms of different types of involvement. In particular, four types of involvement are product, self, other and message.
  • Selective consumer response relates to the suggestion that consumers can be quite heterogenous in their preference for different sources in their search for information before making purchases. Research by Klein and Ford (2003) has found that people who prefer traditional sources of information (e.g., advertising or visiting dealers) are less likely to be experienced with using the Internet and online sources. Therefore, following the implications of this research, increased advertising is more likely to attract buyers who are less likely to visit or provide online word of mouth.
  • The saturation effect refers to the decreasing response of sales to increased advertising. If the saturations effects do occur and sales do not increase as advertising spending increases, consumer word of mouth is also unlikely to increase as advertising spending crosses the saturation levels.

Product involvement refers to the consumers’ feelings regarding, and relationship with, the product. Self involvement refers to the consumer’s use of product-related conversations to satisfy emotional needs (e.g., demonstrating superiority). Other involvement refers to the consumer’s desire to give something to others (e.g., recommending or warning for products). Message involvement refers to word of mouth stimulated due to the consumer’s engagement by advertisements or public relations activities of the product’s manufacturer. Dichter (1966) suggests that factors that affect any of the four types of consumer involvement are likely to affect their desire to speak about products to others. Dichter implicitly assumed that marketing actions that increase any of the four types of involvement eventually increase consumer word of mouth. If so, marketing actions that reduce consumer involvement should decrease word of mouth.

Consumer involvement, selective consumer response and saturation effect are demand-side reasons for the negative correlation between advertising and online word of mouth. However, there are at least two supply-side reasons for the negative correlation between the two variables.

  • Differences in spending on advertising by manufacturers. If manufacturers of brands that do not have strong sales spend more on advertising than others, the relationship between advertising and word of mouth is likely to be negative for lower-selling brands since consumers are more likely to discuss brands that they own and use.
  • Dynamic adjustments of advertising budgets by manufacturers based on word of mouth response to advertising. If manufacturers decrease advertising spending as word of mouth increases, the relationship between advertising and word of mouth is negative.

The primary finding of the paper is that increased advertising expenditure can be associated with lower online word of mouth. Therefore, the assumption in literature that increased advertising can stimulate online word of mouth are disproved by this article. However, I am personally still in doubt as I do not believe that the relationship between advertising and word of mouth is so clear cut (e.g., what is the direction of the relationship? Causality?) For instance, word of mouth can also increase the effect of advertising as shortly explained in the following video:


The practical implication of the result of this paper is that advertising and word of mouth may not be complementary. Companies that want to increase word of mouth may have to reduce advertising expenditure to increase online word of mouth. Reduced spending on advertising has the advantage that it makes finances available which can be used in the effort to increase online word of mouth.

Sources:

Dichter, E. (1966), “How Word of Mouth Advertising Works,” Harvard Business Review, 44, 147–66.

Feng, J. and Papatla, P. (2011). Advertising: Stimulant or Suppressant of Online Word of Mouth? Journal of Interactive Marketing 25, 75-84.

Klein, Lisa R. and Gary T. Ford (2003), “Consumer Search for Information in the Digital Age: An Empirical Study of Prepurchase Search for Automobiles,” Journal of Interactive Marketing, 17, 3, 29–49.

Articles

Value Co-Creation at IKEA

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“An example of making an ordinary product extraordinary…”

What is value co-creation? According to the Business Dictionary, it is a business strategy focusing on customer experience and interactive relationships. Co-creation allows and encourages a more active involvement from the customer to create a value rich experience. In recent years, consumers are increasingly have helped companies, whether by creating advertising content, informing companies on what products they are interested in or advising companies on how to improve their customer service. Many companies are not encouraging consumers to share their thoughts and one of those companies is the successful retail furniture company IKEA. Rich D’Amico, the deputy marketing director at IKEA USA, states that IKEA is a company built on clear values. The two values relevant for value co-creation are simplicity and working together. In addition, IKEA constantly asks itself the following question: What can we do better? To answer this question, IKEA focuses on the needs of people and try to find a solution for them. According to D’Amico, IKEA relies on consumer insights to drive marketing and product ideas. One of the ways in which IKEA tries to understand the needs of the people better was through a campaign titled IKEA Home Tour. A team of five American employees of IKEA were sent on a yearlong road trip across the United States to give families from diverse backgrounds a home makeover using products from the local IKEA store. The road trip was filmed and the episodes were published via the YouTube channel of IKEA USA. During the IKEA Home Tour, the five employees would help with the planning, decorating and assembling of the furniture for the makeover. The home owners were also asked to provide their input. The IKEA Home Tour provided the employees of IKEA with valuable insights into the needs of people and the way IKEA products could fulfill those needs. The IKEA Home Tour allowed for a unique, inside perspective which would not be possible to gain from in-store contact. Not only did the IKEA Home Tour provide IKEA with valuable insights into the needs of the people, it also increased IKEA’s brand awareness and increased goodwill as the IKEA Home Tour visited people from a multitude of backgrounds (e.g., a homosexual couple). While we in the Netherlands may not find this extraordinary, the United States is relatively prude and for IKEA to show do this shows courage and openness. The trailer for one of the episode of the IKEA Home Tour can be found below: https://www.youtube.com/watch?v=bqiMLcNxWnw. In addition to the example of the IKEA Home Tour (which is also discussed in another blog post), another example of how IKEA increases the consumer experience is through the creation of IKEA experience rooms. In general, IKEA experience rooms are designed in a uniform way and most of the furniture comes from the same collection. However, some minor changes are made in the experience rooms to attract different target groups. All experience rooms portray the needs of everyday life (e.g., cooking, sleeping and entertaining).  The experience rooms allows the customer to gain some inspiration of what they can do with their homes. The value of the experience rooms lies in customers becoming involved in creating and assessing solutions to special needs or everyday problems at home in the true reality. Customers share ideas and suggestions during informal conversations with one another and IKEA employees. Customers are involved and that they create their own experiences and not predefined ones. IKEA also encourages customers to do their own assembly and thus selling the furniture at discounted prices. A consumer may decide to buy all the items in the experience room. However, it is more likely that consumers will mix-and-match the items of several experience rooms to design their own room at home. IKEA has simplified this process by digitalizing all of its products for their design stands. For instance, with the help of IKEA employees, consumers can pick the cupboards they want, the size and the color. IKEA goes one step further by allowing customers to mix and match cupboards. For example, a customer may like the internal designs of cupboard A but like the doors of cupboard B and the handles of cupboard C. With the help of IKEA employees, the consumer’s dream kitchen can be assembled digitally, purchased and delivered. The experience rooms are a clear example of IKEA’s principles related to value co-creation: simplification and collaboration. A standardized cupboard is just a cupboard. However, this same cupboard, disassembled and reassembled with customer input can become a unique cupboard. Therefore, IKEA has shown how simplification and collaboration can make an ordinary product extraordinary without having to ask a premium. Other companies should take a good look at the IKEA business model and find ways to adapt it in a unique way to their own context. In this day and age, mass production is OUT, mass customization is IN! Sources http://www.businessdictionary.com/definition/co-creation.html#ixzz3Vt43H1xM http://www.sandeepdighe.com/co-creating-ikea.html http://www.psfk.com/2014/07/ikea-brand-strategy.html https://books.google.nl/books?id=g4F9AgAAQBAJ&dq=ikea+experience+rooms&source=gbs_navlinks_s