CONSUMER INNOVATIVENESS
Defining
Customer Innovation
I often get
asked what I mean when I use the phrase "Customer Innovation". Here's
my explanation:
Customer
innovation incorporates a number of emerging concepts and practices that help
organisations address the challenge of growth in the age of the empowered and
active customer (both business and consumer). It demands new approaches to
innovation and strategy-making that emphasise rapid capability development,
fast learning, ongoing experimentation and greater levels of collaboration in
value-creation. Customer innovation impacts upon all the following activities,
functions and disciplines:
Marketing
strategy and management
Brand strategy and management
Communications strategy
Customer experience design and delivery
Customer relationship management
Customer service design and quality management
Market-sensing and customer learning
Market and customer segmentation
Creativity and knowledge management including market research
Partner and customer collaboration
Organisational alignment and purpose (values, behaviour and beliefs)
Innovation strategy and management
Innovation valuation, measurement and prioritisation
Strategy-making
Brand strategy and management
Communications strategy
Customer experience design and delivery
Customer relationship management
Customer service design and quality management
Market-sensing and customer learning
Market and customer segmentation
Creativity and knowledge management including market research
Partner and customer collaboration
Organisational alignment and purpose (values, behaviour and beliefs)
Innovation strategy and management
Innovation valuation, measurement and prioritisation
Strategy-making
For me customer
innovation is not only an important perspective on value-creation but a whole
new strategy discipline that organisations must embrace if they are to pursue
growth successfully in the future. Put another way, customer innovation impacts
the fundamental means by which value is created and growth sustained.
One of the
difficulties I encounter when explaining the concept is that the
"Innovation" word is traditionally associated with products and
technology. There is a section in The Only Sustainable Edge by Hagel and
Seely Brown that eloquently defines Innovation from a much broader
organisational and strategic perspective:
We
underscore the importance of innovation but we use the term more broadly than
do most executives. Executives usually think in terms of product innovation as
in generating the next wave of products that will strengthen market position.
But product-related change is only one part of the innovation challenge.
Innovation must involve capabilities; while it can occur at the product and
service level, it can also involve process innovation and even business model
innovation, such as uniquely recombining resources, practices and processes to
generate new revenue streams. For example, Wal-Mart reinvented the retail
business model by deploying a big-box retail format using a sophisticated
logistics network so that it could deliver goods to rural areas at lower
prices.
Innovation
can also vary in scope, ranging from reactive improvements to more fundamental
breakthroughs... One of the biggest challenges executives face is to know when
and how to leap in capability innovation and when to move rapidly along a more
incremental path. Innovation, as we broadly construe it, will reshape the very
nature of the firm and relationships across firms, leading to a very different
business landscape.
Although
Hagel and Seely Brown's book provides a great analysis of capability-building
and new innovation mechanisms at the edge of organisations (through new dynamic
forms of firm-firm collaboration) and specialisation, their discussion largely
omits the customer-firm colloboration, open innovation perspective. But, from
Hagel's most recent post and article in the Mckinsey Quarterly, this seems
like it could be the subject of their next book! Here is a quote from the
article:
Cocreation
is a powerful engine for innovation: instead of limiting it to what companies
can devise within their own borders, pull systems throw the process open to
many diverse participants, whose input can take product and service offerings
in unexpected directions that serve a much broader range of needs.
Instant-messaging networks, for instance, were initially marketed to teens as a
way to communicate more rapidly, but financial traders, among many other
people, now use them to gain an edge in rapidly moving financial markets.
Example for
consumer innovativenss
For example, based on this research, Tellis, who has experience launching
new products via his past service as a sales development manager at Johnson
& Johnson, recommended that businesses employ a “waterfall strategy” (i.e.,
a country-to-country tiered release) versus a “sprinkler strategy” (all at one
time) for new products, making sure to vary their approach depending on the
country and product category.
Governments can apply this research when introducing new products, such as fuel-efficient cars, and services to their citizens. “This study tells them whom to target first in which regions,” Tellis said.
Management consultant firm A. T. Kearney funded the study’s data collection, while Don Murray, executive chairman of Resources Global Professionals, provided the annual grant to the USC Marshall Center for Global Innovation, which paid for the data analysis.
Governments can apply this research when introducing new products, such as fuel-efficient cars, and services to their citizens. “This study tells them whom to target first in which regions,” Tellis said.
Management consultant firm A. T. Kearney funded the study’s data collection, while Don Murray, executive chairman of Resources Global Professionals, provided the annual grant to the USC Marshall Center for Global Innovation, which paid for the data analysis.
Compulsive Consumption Consumer
O'Guinn & Faber (1989:148) defined compulsive
consumption as “a response to an uncontrollable drive or desire to obtain, use
or experience a feeling, substance or activity that leads an individual to
repetitively engage in a behaviour that will ultimately cause harm to the
individual and/or others.” Research has been carried out to provide a
phenomenological description to determine whether compulsive buying is a part
of compulsive consumption or not. The conclusion reached after analysing both
qualitative and quantitative data stated that compulsive buying resembles many
other compulsive consumption behaviours like compulsive gambling, kleptomania
and eating disorders (O' Guinn & Faber, 1989:147). Hassay & Smith
(1996) hold a similar view and refer to compulsive buying as a form of
compulsive consumption as well. Besides personality traits, motivational
factors also play a significant role in determining the similarities between
compulsive buyers and normal consumers. According to O'Guinn & Faber
(1989:150), if compulsive buying is similar to other compulsive behaviours it
should be motivated by “alleviation of anxiety or tension through changes in
arousal level or enhanced self-esteem, rather than the desire for material
acquisition.” Hassay & Smith (1996) also agree with the above inference and
concluded from their research that “compulsive buying is motivated by
acquisition rather than accumulation.”
Example Compulsive Consumption Consumer
Examples include uncontrollable shopping, gambling, drug addition, alcoholism and various food and eating disorders. It is distinctively different from impulsive buying which is a temporary phase and centers on a specific product at a particular moment. In contrast compulsive buying is enduring behaviour that centers on the process of buying, not the purchases themselves.
Consumer Ethnocentrism
is derived from the more general psychological
concept of ethnocentrism.
Basically, ethnocentric individuals tend to view their group as superior to others. As such, they view other groups from the perspective of their own, and reject those that are different and accept those that are similar (Netemeyer et al., 1991; Shimp & Sharma, 1987). This, in turn, derives from earlier sociological theories of in-groups and out-groups (Shimp & Sharma, 1987). Ethnocentrism, it is consistently found, is normal for an in-group to an out-group (Jones, 1997; Ryan & Bogart, 1997).
Consumer ethnocentrism specifically refers to ethnocentric views held by consumer in one country, the in-group, towards products from another country, the out-group (Shimp & Sharma, 1987). Consumers may believe that it is not appropriate, and possibly even immoral, to buy products from other countries.
Purchasing foreign products may be viewed as improper because it costs domestic jobs and hurts the economy. The purchase of foreign products may even be seen as simply unpatriotic (Klein, 2002; Netemeyer et al., 1991; Sharma, Shimp, & Shin, 1995; Shimp & Sharma, 1987).
Example for consumer ethnocentrism
Basically, ethnocentric individuals tend to view their group as superior to others. As such, they view other groups from the perspective of their own, and reject those that are different and accept those that are similar (Netemeyer et al., 1991; Shimp & Sharma, 1987). This, in turn, derives from earlier sociological theories of in-groups and out-groups (Shimp & Sharma, 1987). Ethnocentrism, it is consistently found, is normal for an in-group to an out-group (Jones, 1997; Ryan & Bogart, 1997).
Consumer ethnocentrism specifically refers to ethnocentric views held by consumer in one country, the in-group, towards products from another country, the out-group (Shimp & Sharma, 1987). Consumers may believe that it is not appropriate, and possibly even immoral, to buy products from other countries.
Purchasing foreign products may be viewed as improper because it costs domestic jobs and hurts the economy. The purchase of foreign products may even be seen as simply unpatriotic (Klein, 2002; Netemeyer et al., 1991; Sharma, Shimp, & Shin, 1995; Shimp & Sharma, 1987).
Example for consumer ethnocentrism
For example, according to Burton (2002)
and Quellet (2007), consumers are concerned with their cultural, national and
ethnic identities increasingly in more interconnected world. Some consumer
researches determined that people make their purchasing decisions on
information cues. Information cues can be intrinsic (e.g., product design) and
extrinsic (e.g.,brand name, price)(Olson, 1977; Jacoby ,1972). But extrinsic
cues are likely to be used in the absence of intrinsic cues or when their
assessment is not possible(Jacoby, Olson and Haddock, 1971 ; Olson, 1977;
Jacoby, 1972 ; Jacoby, Szybillo and Busato-Schach, 1977 ; Gerstner, 1985).
Also, according to some researches, it
was thought that there is a relationship between attitudes toward foreign
retailers’ products and some demographics characteristics such as gender,
education, income and age.
When doing this research, it was aimed
at determining consumer attitudes towards foreign retailers’ products. The
research starts with a literature review which includes international retailing
in Turkey, attitudes towards purchasing foreign retailers’ products (general
review), effects of age and education level on attitudes, influence of consumer
ethnocentrism on attitudes towards foreign retailers’ products respectively.
Secondly, methodology part that has explanations about how this research was
conducted, was presented. Then, findings which derived from questionnaire
results and its SPSS analyses, are presented. At the last stage of the
research, discussion, limitations and future researches are discussed.
Sumber :
http://chrislawer.blogs.com/chris_lawer/2005/10/defining_custom.html
http://www.businessteacher.org.uk/free-marketing-essays/compulsive-buying/
http://chrislawer.blogs.com/chris_lawer/2005/10/defining_custom.html
http://www.businessteacher.org.uk/free-marketing-essays/compulsive-buying/
http://mel-mel-liana.blogspot.com/2012/11/defining-customer-innovation.html
