Innovative Approaches towards Data Collection Process for New

Innovative Approaches towards Data Collection Process for New Product Development Umidjon Ahunjonov Maxamadumarovich1 School of Management, Wuhan University of Technology, Wuhan, China ([email protected])

Raja Irfan Sabir2 Chinese-German Institute for Intellectual Property, School of Management, Huazhong University of Science and Technology, Wuhan, China ([email protected])

Abstract - This paper examines different novel methods in today’s internet technology dominated era to capture consumer inputs and inspirations to benefit the process of developing new goods and services till their placement in the market. Taking exploratory research and inductive approach based on literature view as the methodology, the paper compares and contrasts similarities and differences between traditional and non-traditional means of obtaining consumers’ perceptions about future goods and services, and makes an attempt to define some qualities that companies lack regarding the adoption of internet-based means for generating new product ideas. Our findings reveal that internet-based methods, compared to traditional means, are more efficient in acquiring consumer insights for further usage in NPD process. The paper points out that the main problems that hinder the usage of internet-based methods are non-sensitive and non-enthusiastic management and incapable staff. And by highlighting these problems, the paper serves as guide for business managers to take appropriate approaches during data collection process for New Product Development.

innovative users to satisfy their own needs [1]. Mojara points out idea generation or “creativity” stage to be the initial phase of the innovation process [2], and Karkkainen et al. assess this early phase of product innovation process as vital for the success of the whole innovation management [3].

Keywords - Creative consumers, Consumer-driven innovations, Internet technologies

I.

INTRODUCTION

It is generally true that any kind of initiative begins with the bearing of a new idea which later on is developed, implemented and benefited from. All the new products currently available in the market are also a direct final result of newly-born innovative ideas. As competition among companies continues to be fiercer, in order to gain a little extra market share, and at the same time, to keep already-gained one stable, companies strive to capture consumer interest in their products. For retaining consumer attention, companies should always be alert with offered products, and should frequently “invent” products with superior characteristics comparing to previous ones or of those being offered by rivals. In this case, finding more innovative ideas to create new products can determine a company’s success. According to von Hippel innovations are generated either by companies to meet their customers’ satisfaction or by

Following the idiom of “customer-king” and implying a huge new idea source potential, currently many leading companies are more likely to involve customers themselves into new product development (NPD) process. They are using various means and methods to engage customers into new product development process. II. IMPORTANCE OF CONSUMER-DRIVEN INNOVATIONS There are several means to obtain ideas for creating new products: the main sources to generate ideas for developing new products range from company’s basic research – SWOT analysis to company’s R&D department, department of marketing and sales, suppliers, employees, salespeople, trade shows, trade literatures, universities, corporate spies, consumers and so on. To some extent, all these methods help companies come up with new ideas to innovate company’s products. However, nowadays, approaches toward which method to use in order to be the first and efficient innovator have been changing. According to a survey conducted in the UK textile industry companies, it has been found that company’s R&D, marketing department and consumers are the best sources of new product ideas in regard to frequency and profitability rating [4]. If we generalize these three means of new idea sources, we result in “customer” being the number one source of new idea generation process. Because in fast growing and highly competitive market condition R&D and marketing department are highly dependent on customers to come up with new product solutions. In this regard, Chas Martin represents his opinion by saying: “To be fair, many designers (R&D or marketing department members) are thoroughly capable of creating through consumer eyes. But consumers represent an incredible diversity of alternate perspectives” [5]. Hence, currently the position of “consumer –

king” has been expanding to be market-research head, R&D chief and product-development manager at the same time. III. CAN CONSUMERS INNOVATE? – WHAT IS CONSUMER INNOVATION? In their article “When customers get clever:” Berthon et al. deliver several examples from how cleverly customers modified/adjusted products to suit themselves (as one of these examples we can mention the story from one of the Toyota funs who added extra batteries to boost his car’s mileage). He accentuates creative consumer phenomenon to be old and to have recently started to gain attention by researchers and business leaders. He analyses company’s stances toward adeptly modification of services and products by creative consumers and challenges firms to recognize creative consumers’ existence, urges them to identify their actions and to capture and create value from them [6]. Von Hippel also underlines user innovation to have always been around [7]. In his studies, Christoph found that in certain industries (in his case: Kayak Rodeo industry), users might end up with being manufacturers themselves in their attempt to realize their radical changes to the existed products into action, after not getting corresponding respond to their given innovative ideas from the companies [8]. After realizing the importance of user innovation and as the result of the widespread availability of internet technologies and social computing, consumers come to the central stage in the product innovation processes of many leading companies. Forrester illustrates this phenomenon as a shift from “Consumer-Focused Innovation” into “Consumer-Driven Innovation” [9]. For the companies, the only task to be successfully accomplished is to quickly adapt to this shift and to create more efficient ways to better capture their consumers’ inspiration. IV. NON-TRADITIONAL VERSUS TRADITIONAL METHODS AND APPROACHES TOWARDS CONSUMER NEED RESEARCH Within the invention of internet technologies, previously widely used methods of analyzing customers’ potential desires, such as focus groups, interviews, panels seem to be obsolete and are more likely to be regarded as traditional methods compared to more internet-involved methods as wiki-research projects, blog mining and online ethnographic studies and so on. However, it should be noted that some traditional methods are still widely in use with noticeable modifications to their structural context. In this regard, we can see the success of Anthony’s methodology to efficiently capture customer’s unarticulated (latent) needs to benefit product modification process of the company. He points out approaching ordinary consumer groups to solicit their ideas as one of the most

frequent mistakes that companies make. In his view, ordinary consumer groups have limited or no knowledge about emergent technologies, new materials and the like, which seem to be inefficient to capture the exact input required; however products spring from the recommendations of “lead users” group (narrow intelligent group of customers) might have limited appeal to ordinary customers due to its complexity. Therefore, he suggests companies to focus on consumers’ desired outcomes to get better results to innovate and explains his five steps outcome-based methodology to tap into consumers’ insight and inspiration to bring novel services and products to life. And there is evidence from the Cordis Corporation case, a medical device manufacturer, applying Anthony’s methodology in its business, succeeded to grow its market share from 1 % up to 10 % in the US market in only one year period [10]. Derrick Palmer claims that although conventional means of consumer researches are considered to be supportive foundation for non-traditional ways of gathering information from consumers to “co-create” new products, in today’s fiercely competitive market they are no longer effective to harness consumers’ inspiration to develop innovative products. They serve only to validate internally-elaborated concepts – not to generate novel ones. According to the author, internet technologies have created great opportunities for companies to tap into consumers’ mind and passion in totally different ways to co-develop novel products in the market [11]. Comparing and contrasting traditional person to person brand research and internet-based crowd-sourced research, Bryan also confirms internet-based crowd-sourced research to be complement of traditional brand research; however, he points out traditional person to person researches to be more artificial in context [12]. Moreover, Berthon et al. underscore that focusing only on the study of lead users alone doesn’t provide companies with comprehensive understanding of consumer creativity. What we think is the concept of “lead users” or “luminaries” (definition by GE healthcare division) is the most prominent focal point in traditional means of consumer innovative idea generation, not in internet-involved new methods. In general, internet-based methods enable companies to use whole potential of consumer creativity, including “lead users” only as a complement of subsequent stage of “fuzzy front end”. To enable the reader to better understand our point we refer BMW and Staple examples depicted in the table below. Within the rise of online communities along with easy-touse design tools, new approaches toward capturing consumerdriven innovation have been on a serious rise. In the table below, we can see some examples from how different leading companies applied internet-based toolkits to successfully grasp and utilize consumer creativity.

TABLE I. INTERNET-BASED TOOLKITS TO HARNESS CONSUMER CREATIVITY Name of the company

a.

Production area

Methods used to harness consumer creativity

Electronic Arts

Computer games

Sent programming tools to its consumers, posted their modification online and built their ideas into new games

BMW

Automobiles

Posted a toolkit on its website and let consumers develop ideas in telematics and in-car online services. Chose the top best idea-innovators and invited them to meet its engineers.

Staples

Office supply retailer

Declared competition under the name of “Invention Quest” online, got 8300 new idea submissions and chose the best ones to develop

Boeing

Airplanes

Developed interned-based forum including message boards and discussions with Boeing design team on what passengers like or dislike in today’s air travel

Lego

Toys (educational)

Allowed programmers to access the code that controls its Mindstorms toy robot through the internet, thus downloading its operating system, vastly improved and posted their work freely online

Westwood studios (now owned by EA)

Computer games

Dedicated department to feed designers and producers working on new projects with consumer innovations of existing games posted freely on fan websites

This table is formed according to the data collected from references [11] and [13].

If we draw attention to all these cases above, innovative ideas collected are all almost free of charge offerings by customers. In that vein, Von Hippel emphasizes that consumers have no commercial interest to submit their innovative ideas, but their direct personal enthusiasm and need [13]. The reasons that can explain why customers are willing to give their “innovative” ideas freely are different and vary from person to person concerning their personal standpoint: - they feel happy to have gratitude, recognition from prominent companies and kudos from their peers and other users; - they imply network effects of their freely revealing work;

- they have less interest in patenting their innovative ideas because they regard patents to be costly and with weak protection; - they work to satisfy their own personal interest; keen to trial (experimentation) and creativity; - challenges of solving problem and bringing benefit to other customers. From several literature views, we tried to generalize and unite some techniques that have been using by different companies to tap into consumer creativity to one joint structure.

TABLE II.METHODS TO GET IDEAS FROM CONSUMERS IN NPD PROCESS Traditional methods

Non-traditional methods

Traditional

Modified traditional

Internet-based

Qualitative focus groups, interviews, survey research, concept tests, panels, test market launches

“Divergent” techniques: “real-time visuals”, “here’s what I really want”, “humor and empathy”, “devotees and detractors” Ethnographic methods: field observation, depth interviews, video ethnography, cultural inventories, video diaries, visual stories.

Crowd-sourced approaches: Social media platforms, blogs, online video conferencing, conversation analytics, mobile-driven online ethnographic studies, dialogic loops, semi-structured virtual focus groups, “viral” research, wiki-based research projects, game-based play research, idea competitions, create-yourself toolkits

It is said that about three quarter of traditional consumerfocused projects fail due to longevity of research period and feedback return [13]. Conversely, with a shortcut of the internetbased process of gaining consumer insight, company’s

management can easier and earlier come up with the new product sample they want to prototype. In the figure below, we can see differences between the stages included in traditional and internet-based new product development processes.

Internet-based NDP Process

Project Development Team (Manufacture)

Test Feedback Researcher

Report back

MARKET (CONSUMER)

R&D and Marketing departments (Screening) Online toolkits

Data

Project Development Team (Manufacture)

New or modified Product Sample

DESIGN

BUILT

TEST FEEDBACK

CONSUMERS

TEST FEEDBACK

Data

New Product Market Introduction

BUILT

R&D AND MARKETING

DESIGN

NEW PRODUCT

Traditional NDP Process

Figure I. Traditional Vs Internet-based NPD process. What we can see from the figure is that with the application of internet tools, customer need assessment process has totally changed its meaning of what once it used to have in traditional one. Now, customers themselves are telling companies what they want to see in future products. Using internet-based means more reliably guarantees competitive edge to the companies with their new products. However, so many challenging problems to deal with in the starting point of application of internet-based methods to NDP process are restricting companies to step forward. V. DEVELOPING INTERNET-BASED NPD PROCESSES Mapping innovations, Tony Davilla et al. differentiate two types of strategic innovations in the companies: business model and technology innovations, which both include three subinnovation strategies inside. One of these sub-innovation strategies is “enabling technologies” which implies changes in information technologies. As they state, enabling technologies enable companies to execute the operations much faster and leverage time as a source of competitive advantage [14]. In order to implement internet-based methods in NDP process, two main points in the company level should be considered: A. Sensitive and enthusiastic management Top management of the company plays a core role in implementing any kind of changes in the company. It is regarded as the most important enabling factor in bringing new methods into the process. However, Rodney stated that still some managers opposed the use of internet to search for new ideas. It seems that they are not fully aware of relative advantages of adopting internet-based methods. In this regard,

they should realize the potential benefits of internet-based methods, such as rapid information access, global communication opportunities with customers, reduced administrative costs and dramatic decrease in manual work procedures. Additionally, they should recognize that those methods that brought success in the past will not do so in the future. B. Capable staff Sangjae et al. notes relationship between implementation of internet-based systems and company expertise in related area. He hypothesizes that the greater internet system expertise of the company, the greater the implementation success of the system [15]. One can infer from this hypothesis that companies planning to adopt internet-based NDP system should pay attention to the capability of company staff. Companies should reconsider their current recruitment policy in regard to qualities demanded from new employees and at the same time, should encourage organizational learning processes. VI. CONCLUSION According to a recent research, the total number of internet users all over the world has increased by more than four times in ten years’ period: from 2000 to 2010. However, one should note that this increase is much higher in the context of less developed parts of the world such as Africa (more than 23 times), Middle East (more than 18 times), Asia (more than 6 times) and Caribbean (more than 10 times) [16]. It is clear that this growth tendency keeps continuing because information technologies have already turned out to be the most important necessity in every area of the modern society. Thus, it is highly important for the companies to keep track and respond to the

changes in the society accordingly. As it comes to involving the customers into NPD process, it is up to company’s marketing and R&D managers to decide. In addition, since conventional ways of consumer researches are still in use in many companies, using the same means assures only little competitive advantages to the company. REFERENCES [1] Eric Von Hippel. The Sources of Innovation, Oxford University Press, New York, 1988. [2] S. Mojaro, Managing Ideas for Profit. McGraw-Hill, Maidenhead, 1988. [3] H. Karkkainen, K. Elfvengren. Role of careful customer need assessment in product innovation management – empirical analysis. Int.J. Production Economics 80 (2002) 85-103. [4] Rodney McAdam, John Mcclelland. Sources of new product ideas and creativity practices in the UK textile industry. Technovation (Journal) 22 (2002) 113-121. [5] Chas Martin. Customer-Driven Innovation. http://www.innovativeye.com/blog/2006/7/18/customer-driveninnovation.html [6] Pierre R. Berthon, Leyland F. Pitt, Lan McCarthy, Steven M. Kates. When customer get clever: Managerial approaches to dealing with creative consumers. Business Horizons (Journal) (2007) 50, 39-47. [7] Eric Von Hippel. Democratizing Innovation. The MIT Press, 2005.

[8] Christoph Hienerth. The Commercialization of User Innovations: The Development of the Kayak Rodeo Industry. userinnovation.mit.edu/.../Hienerth%20Commercializing%20UI.pdf [9] Christine Spivey Overby, Carrie Johnson, Brian Tesch. The Essentials Of Consumer-Driven Innovation, http://www.forrester.com/rb/Research/essentials_of_consumerdriven_innovation/q/id/36186/t/2, 2006. [10] Anthony W.Ulwick. Turn Customer Input into Innovation. httpwww.ergen.grfilesTurnCustomerInputIntoInnovation.pdf, 2002. [11] Derrick Palmer. Harnessing Consumer Inspiration in New Product& Service Development. 2007. http://www.innovationpoint.com/resources.htm [12] Bryan K. Oekel. Crowd-sourced Research Models for Consumer-driven Innovation, http://www.unboundedition.com/pdp_thinking/2009/mar/25/crowd-sourcedresearch-models-consumer-driven-inno, 2009. [13] The rise of the creative consumer. The future of innovation. The Economist (Journal) 374(8417), 75. 2005. [14] Tony Davila, Marc J. Epstein, Robert Shelton. Making Innovation Work, Wharton School Publication, New Jersey, 2005. [15] Sangjae Lee, Kyoung-jae Kim. Factors affecting the implementation success of Internet-based information systems, Computers in Human Behavior (Journal) 23 (2007) 1853-1880. [16] http://www.internetworldstats.com/stats.htm