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Virtual Customer Integration in New Product Development

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  • 1. Virtual Customer Integration in New Product Development Guido Lang University of Bern, Switzerland, guido.lang@iwi.unibe.ch Marc Fetscherin Rollins College, USA, mfetscherin@rollins.edu Christoph Lattemann University of Potsdam, Germany, christoph.lattemann@uni-potsdam.de International Academy of E-Business 8th Annual Conference, March 20-23, 2008
  • 2. Introduction Cf. Füller et al. (2004), Sawhney et al. (2003), Leonard-Barton (1993), von Hippel (1988).
    • Virtual Worlds
      • May impact the way businesses interact with customers
      • Market is constantly changing and evolving
      • Second Life (SL) encountered widespread public attention
      • SL is entirely built and owned by its residents
    • New Product Development
      • Innovation is key for competitive advantage
      • External knowledge to succesfully launch new products
      • Integration of customers into the product development process
      • Different development stages and integration forms
    • If and how are companies using Virtual Worlds for customer integration in new product development?
  • 3. Literature Review
    • Various authors conceptualized the new product development process using stage models
    • Lengnick-Hall (1996) described distinct roles for customer contributions in the value-creating process
  • 4. Methodology
    • Focus on Second Life, as no other Virtual World attracted comparable amount of companies to establish presences
    • Case study approach due to explorative-qualitative nature
    • Three-step data collection and analysis
      • List of companies in Second Life (n=130)
      • Public announcements of companies‘ activities
      • Qualitative content analysis of public announcements
        • Categorization of each case
        • Cross-case analysis
    Cf. Yin (2003).
  • 5. Results
    • Data collection until October 2007
    • First company, BBC Radio 1, in May 2006
    • Since then monthly average of 10 companies entering
    • Peak in March 2007 (23 companies)
    • Prominent examples include IBM, Sun Microsystems, GM, Dell, NBC Universal, Mercedes Benz, AMD, Microsoft, etc.
    • Cross-case analysis revealed similarities/differences
      • Core product
      • Main objective
      • Competitive contribution
      • Ongoing development
  • 6. Results continued Vgl. bspw. Festinger/Katz (1965), Bortz & Döring (2003).
  • 7. Conclusion
    • Only 17 percent of companies in Second Life use it for customer integration in new product development
    • Development of new core products mainly in later stages
    • If used during concept and design or product testing, this tends to be the main objective
    • Companies organize competitive contributions when customers are integrated in the concept and design phase
    • Most companies plan their activities as an ongoing development effort - not as a one-time event
    • Limitations
      • Qualitative-explorative, hence no statistical generalization
      • Public announcements often only intention to act
      • Study conducted at an early development stage
  • 8. References Dahan, E., Hauser, J. (2002). The Virtual Customer, Journal of Product Innovation Management, Vol. 19, Issue 5, pp. 332-353. Enkel, E., Perez-Freije, J., Gassmann, O. (2005). Minimizing Market Risks Through Customer Integration in New Product Development: Learning from Bad Practice, Creativity and Innovation Management, Vol. 14, Isssue 4, pp.425-437. Füller, J., Bartl, M, Ernst, H., Mühlbacher, H. (2004). Community Based Innovation. Proceedings of the 37th Hawaii International Conference on System Sciences. Füller, J., Matzler, K. (2007). Virtual Product Experience and Customer Participation – A Chance for Customer-Centred, Really New Products. Technovation, Vol. 27, pp. 378-387. Lengnick-Hall, C. A. (1996). Customer Contributions to Quality: A Different View of the Customer-Oriented Firm. Academy of Management Review, Vol. 21, No. 3, pp. 791-824. Leonard-Barton, D. (1993). Developer-User Interaction and User Satisfaction in Internal Technology Transfer, Academy of Management Journal, Vol. 36, Issue 5, pp.1125-1140. Nambisan, S. (2002). Designing Virtual Customer Environments for New Product Development: Toward a Theory. Academy of Management Review, Vol. 27, No. 3, pp. 392-413. Sawhney, M., Prandelli, E., Verona, G. (2003). The Power of Innomediation. MIT Sloan Management Review, Vol. 44, No. 2, pp. 77-82. von Hippel, E. (1988). The Sources of Innovation. New York: Oxford University Press. Yin, R. K. (2003). Case Study Research. 3rd Ed., Thousand Oaks: Sage Publications.