Market concentration and effectiveness of co-creation (2011)

Power to the People!Does market concentration play a role in the effectiveness of co-creation?

What’s coming

1.Background 2.Present study 3.Findings 4.Implications

1

1.Background.

2

What makes co-creation effective?

3

What is co-creation?

4

Company-driven NPD

5

Co-creation: user-driven NPD

6

Success stories

Linux Apache Firefox

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Success stories

8

Success stories

9

Non-participating users

10

Positive effects

Customer orientation

Innovation ability

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Negative effects

Design complexity

User expertise

12

Market concentration

13

Market concentration

high concentration low concentration

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Market control

When crypto-monopoly is assumed it no longer follows that any of the old goals of social efficiency are realised.

“ “15

John K. Galbraith, American Capitalism (1952, p.43)

Market control

Prices Innovation

Technical advance Culture

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Attitude change: positive

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Attitude change: negative

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Consumer resistance

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Consumer resistance

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Consumer resistance

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Consumer resistance

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Research question

Does market concentration play a role in the effectiveness of co-creation?

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2.Present study.

24

26

high concentration

Effects of market concentration

25co-creation

low concentration

26

Effects of market concentration

26co-creation

Hypotheses

H0: Consumers prefer user-driven value creation strategies to company-driven ones.

H1: Preference for a user-driven value creation strategy is associated with market concentration.

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Conceptual model

market concentration

value creation strategy

behavioural intentions

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Methodology

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Industry

software for video editing30

VS

2 × 2 between subjects design

company-driven user-driven31

2 × 2 between subjects design

high concentration low concentration

VS VS

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Functionality & Innovativeness

33

6.4

5.7


34

5.7

6.4

Reliability & Usability

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5.2

5.9


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5.9

5.2

?

Which option will they choose?

company-driven user-driven37

3.Findings.

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Participants

600 invitations

162 usable responses

No reward for participation

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Mean age: 27 years (SD = 7.90)

Participants

56% male

54% non-student

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Manipulation and control checks

1.Type of value creation strategy 2.Level of market concentration 3.Differences in attribute rating

✔

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1.Involvement 2.Product knowledge 3.Expertise

✔

So, did market concentration play a role?

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Choice shares by market concentration

0%

20%

40%

60%

80%

100%

Low concentration High concentration

31,0%28,2%

69,0%71,8%

User-drivenCompany-driven

Market concentration and preference for type of value creation strategy

43Company type choice by market concentration: χ2(1) = 0.49, p = .48

Choice preference

0

1

2

3

4

5

6

7


4,72 4,83

3,05 3,28



44Company type preference by market concentration: F = 0.40, p = .53; measured on a seven-point

Lykert type scale (1 = Company "A" and 7 = Company "B")

Option “1” adoption likelihood

0

1

2

3

4

5

6

7


4,11 3,88

5,214,52




Lykert-type scale (1 = Very unlikely and 7 = Very likely)

Option “2” adoption likelihood

0

1

2

3

4

5

6

7


5,03 4,85

3,87 4,15




Lykert-type scale (1 = Very unlikely and 7 = Very likely)

H1: Preference for a user-driven value creation strategy is associated with market concentration.

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Value creation strategy and preference

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Frequency of choice

0%

20%

40%

60%

80%

100%

32,1%

67,9%


Adoption likelihood

0

1

2

3

4

5

6

7

3,544,88



49Company type adoption likelihood: t(161) = 3.90, p < .001; measured on a seven-point Lykert-type

scale (1 = Very unlikely and 7 = Very likely)


50Relative contribution of company type description and performance attribute ratings: χ2 = 32.10, p < .001.

Contriubtion to choice preference (R-statistic)

Company type description



0,0 0,2 0,4 0,6 0,8 1,0

0,16

0,14

0,30

Frequency of reasoning behind preference

31%

4%4%

39%

23%Customer orientationTarget segmentDiversityNumbersExpertise

Reasons for co-creation preference

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Perceived expertise

Perceived Innovation ability

Perceived customer orientation


31%

4%4%

39%


Reasons for co-creation preference

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Perceived expertise

Perceived customer orientation


31%

4%4%

39%


Perceived Innovation ability

H0: Consumers prefer user-driven value creation strategies to company-driven ones

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4.Implications.

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Theory

1.Generalisability 2.Counter mediation 3.Consumer resistance

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Practice

1.Focus: A.Novice users B.Target segment

2.Avoid: A.Market structure B.Freedom of choice

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Limitations

Like the physical, the psychical is not necessarily in reality what it appears to us to be.

“ “57

Sigmund Freud, “The Unconscious” in The Freud Reader (1989, p.577)

Limitations

1.Student sample 2.Atypical product descriptions 3.Experimental design 4.Polar opposites

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Future research

1.Wider demographic 2.More product categories 3.Different levels of empowerment 4.B2B

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Conclusion

1.First study 2.Inconclusive evidence 3.Unsolved mysteries 4.More research needed

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Thank you!

Market concentration and effectiveness of co-creation (2011)

Marketing

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