There are two sources of information. On one side, consumers possess information regarding their needs, preferences, tastes. On the other side, companies have information about their targets, capabilities, budget restrictions. Companies are trying to get access to consumers’ information. they want to know what they want, what they need, in order to offer the best match possible. Although advances in modeling allow for more accurate predictions of consumer choice behavior, there is still a lot left unknown. A lot is remained probabilistic. Continue reading Open Innovation & Lead Users
We have extensively talked about the advantages of offering personalized product recommendations to consumers. These recommendations increase consumers’ decision quality and save them a lot of effort. There are various approaches in personalized recommendation systems either based on past behavior or based on collaborative filtering techniques (see this article on different approaches of recommendation engines).
However, we have to take into account that sometimes personalized recommendations (especially when we passively receive them) feel quite invasive and consumers at some point ignore or even react. Think about the following situation: you visit a website X and look at a specific red t-shirt. You don’t buy it, yet you move continue your browsing. You send a couple of e-mails, you read the news and finally you log in to facebook. On the right banner, you see an ad with this red t-shirt you inspected 1 hour ago. Next morning, you open your computer, you search information about something you saw n TV last night. Google gives you 1million results in less than a second…plus, a red t-shirt on the right banner of Google ads.
Here is a great example on how co-creation is used in the entertainment industry. This project is called the Entertainment Experience where the audience is given the opportunity to make their own movie closely accompanied by acclaimed experts. The first three minutes of the script are given, but based on that the audience can create the remaining of the movie. Every part of the creation of the movie is done by the audience: script writing, acting, editing, directing etc. If you lack the talent to contribute directly to the movie, you still have the possibility to be involved because the audience votes on what will be used in the end movie. Together they will create the first user generated movie.
On the website – http://www.entertainmentexperience.com/ – there is a movie that explains how it works.
It will be interesting to see how successful the end result will be. Will this be the future for Hollywood?
I found this really interesting post and thought that it would be a great idea to share it with you since it is so in line with the content of the “Consumer Channel Dynamics” Seminar. I hope you will also find it interesting and enjoy! It shows that customer co-creation is important not only during the product’s designing but mostly during the every day life, when the product is actually used by consumers. It is during the every-day life that customer co-creation gives value to the customer himself!
Whether shopping for clothes or electronics, books or microwave food, consumers have many more options than ever before. The variety of choices today gives us a much better chance of finding something that exactly suits our needs, our personalities, our activities and our bodies. However, those choices can be overwhelming. In his book “The Paradox of Choice: Why More Is Less,” Barry Schwartz emphasizes the downside of these huge assortments. According to him, as the number of choices grows further, consumers feel overloaded and, as a result, choice becomes a burden rather than a freedom.
However, since we (i.e. the consumers) have easier access to more and more information and alternatives, the chances that there is a product perfectly fitting our preferences exists out there. Traditionally, the rule of 80-20 was overruling all markets. The underlying idea is that 20% of the products make up 80% of the revenues.
One rich source of information on recent and upcoming trends, trendwatching.com , already in 2004 spotted a substantial rising trend regarding the phenomenon of companies working closely with consumers in order to create design, produce, develop or promote their products (Customer Made).
Shifting to the latest consumer trend report of January 2012, we can see that consumers’ active involvement in the value creation process is still thriving. Crowd-based problem solving is expected to be the core source of ideas, especially given that contributing will be more effortless than ever before (Idle Sourcing). One of the facilitating drivers is the increasing capabilities of the available interfaces. Screens are expected to be more interactive and consistently on (and online within “the cloud”) (Screen Culture). Even in situations that were considered difficult to “intrude”, consumers are becoming increasingly active and powerful. Health related mobile applications and online interfaces, gives the opportunity to consumers (patients) to satisfy their implicit desire for control by discreetly tracking and managing their health on their own (DIY Health).
In the old times, consumer decision making was simple. Consumers had access to limited (but easily handled) information and only a few channels to look for products. The competition was less intense and consumers could have strong preferences among the clearly distinguished alternatives. However, times have changed and the digitization as well as the need for individualization in modern economies have made the situation a bit more complex. The following video (from the advertising company Scholz & Friends) offers a nice illustration of the evolution of marketing throughout the last decades.
The costs of computing power and telecommunications have been dramatically reduced and, in this information intensive economy, products and services have been extensively digitized. In addition, consumers are becoming more and more knowledgeable and demanding and contact firms in many different situations. These consumers require the formation of tailored value creation systems to better match their needs. The emerging challenge for firms is how to best support and activate consumers and also learn about their product needs? Increasingly firms and consumers work closely together in the value creation process. Firms such as Dell and Nike allow their customers to tailor products to their own taste. Other firms like Amazon and Facebook rely heavily on consumer input to create value for other consumers. To be successful, these new business models often use non-conventional marketing channels, and strongly rely on new information technology such as the Internet and mobile technology to interact with consumers.