Introduction:

One of the crucial factors for company’s growth and strength is
developing new products to compete other companies in the market. However, not
all new products have the chance to succeed (Geise, 2017). Involving customers
in new product development could be of great value and can play a role in the
success of the new product (Brockhoff, 2003; Stenmark, Tinnsten & Wiklund,
2011). Eriksson and Hilletofh (2010) argue that during the new product
development, deep understanding of customer needs should be considered rather
than the technology of the product. In the 70s, customers were considered as
passive buyers and their roles was defined in the consumption stage while in
today’s market, customers considered as partners who participate in the
creation process (Agafitei and Avasilcal,2016). Co-creation is the term that
used to describe the collaboration between the company and its customers to
develop a new product (Liljedal, 2016). According to Agafitei and Avasilcal
(2016), the term co-creation has been mentioned for the first time in 2000 and
it defined the active customers who participate in defining the value of the
new product or service. Cheron and Pera (2016) described the co-creation as a
booming activity that has been implemented nowadays by companies to include
their customers in the creation process by generating ideas and giving an
insight to the company to develop a new product or improve an existing one.  

Customer Participation:

Sanden (2007) stated that “customer involvement effort should start
with a definition of the project’s prerequisites in terms of corporate,
marketing and innovation strategies, and cultural and organizational factors
such as skills and competences needed and the organization of the project”. Customer
participation defined as the extent to which they are involved in the new
product development (Fang, 2008). Brockhoff (2003) mentioned that the degree of
customers’ co-creation should be measured and they should be selected based on
their potential stage of contribution. A research by Fang, Palmatier and Evans
(2008) measured customer participation by breadth and depth of co-creation. The
breadth refers to the range of customer involvement in the NDP stages (concept
generation, prototyping, and product testing) while the depth refers to the
level of customer involvement in each stage of the NDP. Another research by
Hoyer, Chandy, Dorotic, Kraftt and Singh (2010) measured customer participation
by scope and intensity of co-creation. The scope refers to the tendency of the
company to collaborate with customers through the NPD process stages while the
intensity refers to which extent the company is relying on co-creation in the
NPD different stages. Nambisan (2002) relate the customer role in NPD to four
areas: customer and value creation, customer as resource, customer as co-creator
and customer as user. Geise (2017) emphasized on the importance of customers as
valuable resources for the companies that work with open innovation strategy to
generate new ideas.

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Ideas Generation:

Companies find customer co-creation, a successful approach for
ideas generation and mirroring closely what customers need (Hoyer, Chandy,
Dorotic, Kraftt and Singh, 2010). Ideas generation was a manufacturer-active
role rather than a customer-active role, Hippel (1978) developed a new
customer-active paradigm where companies develop new products according to the
customers’ request who communicate their needs opposite to the
manufacturer-active paradigm where companies search for customers’ needs then
develop the product. Luo and Toubia (2013) argue that customers who participate
in the NDP can be classified to low-knowledge customers and high-knowledge customers
and both are facing different challenges in the task of idea generation.

The development of new communication technologies participated in
changing the producer-customer relationship and has its implications on the NDP
(Nambisan, 2002). According to Luo and Toubia (2015), online platforms for idea
generation give companies access to customers’ ideas, categorize ideas and
offer free navigation to customers across these categories. Vere (2014) argue
that social media enabled a new way of consumerism where consumers are playing
an active role in product design and production through the virtual
communities.  Roberts and Piller (2016)
mentioned that social media is not limited in Facebook and Twitter but it
includes special forums and blogs which provide information that lead to
successful new products. Companies across industries start establishing virtual
customer communities where customers share knowledge and participate in new
product development (Nambisan, 2002).

Customer involvement can go beyond ideas generation to product test
and product support; involving customers in product test stage can help the
company to detect flows in an early stage of developing cycle which can reduce
the cost of redesigning the product (Nambisan, 2002).

Customers’ Motivation:

One of the challenges in customer involvement in NPD is to
understand what motivates customers to be part of generating ideas and testing
or evaluating the product (Agafitei and Avasilcal, 2016). Understanding
customers’ motivation to participate in the new product development process can
be beneficial for both customers and producers (Brockhoff, 2003). Some of the
motivation factors according to Hoyer et al. (2010) can be financial rewards or
social benefits. Companies should communicate the reasons that will motivate
the customers and show the value that they will get from their participation
(Liljedal, 2016).  From the other side,
Brockhoff (2003) argue that customers also should clarify their involvement
strategy in the NPD process to get an equivalent value for their participation.
Fernandes and Remelhe (2016) found that the most important motivation factors
for customers’ participation in new product development are knowledge
acquisition and intrinsic motivations while rewards were not among the most
important motivation factors for the customers.

Challenges:

Sanden (2007) argue that outsourcing parts of the creation process
puts demands on the company and requires a shift in mindset; customers should
be considered and treated as partners by the company’s employees who take part
in that collaboration. Nambisan (2002) discussed a number of challenges related
to customer involvement in NPD such as finding innovative customers in
cost-effective way, creating incentives to encourage customers to contribute in
the process and capturing the customer knowledge.

Customer involvement in many cases can be limited to interviews and
product testing due to two reasons; first, it can be costly for the company and
second, many companies do not agree to reveal information about any new
products before releasing it (Stenmark, Tinnsten and Wikland, 2011).

Another challenge is managing the co-creation process between the
company and the customers; any misbehaver from the company (intentionally or
accidentally) might have a negative influence on the process and might lead to
lose the trust and the commitment of the customers (Cheron and Pera, 2016)

Conclusion:

Co-creation in NPD is the collaboration between producers and
customers in product development process; it allows customers to play an active
role in developing new products (Hoyer, 2010).

 

Beer (as cited in Hoyer, 2010) outlined Jeffrey Kalmikoff, Chief
Creative Officer of Threadless.com words

“We don’t advertise at all. All our
efforts are toward finding ways of expanding word of mouth. If you’re a
designer and you want to get chosen, you’re going to tell everyone you know to
go to the site and vote. If you’re going to do that, why wouldn’t we give you
the tools to do that better? Banners for your site, the ability to send mass
e-mails and stuff like that. It also grows our site because in order to vote,
people need to register and get a username, which gets more people on our
newsletter. Is it marketing? Of course”.

 

 

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