This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Who Says Customers Can't Help Create Major Innovation?

CHICAGO, Nov. 20, 2012 /PRNewswire-USNewswire/ -- Conventional wisdom suggests that customers cannot easily contribute to the creation of major innovation and new product development (NPD) should proceed in defined stages. This research finds otherwise.

(Logo: http://photos.prnewswire.com/prnh/20111102/DC96044LOGO)

Every marketer involved with NPD knows: 1) they should listen to the voice of the customer, and 2) they should involve customers at certain development stages. However, are customers simply subjects for research and product testing? Does a stage approach really help firms trying to push technological frontiers? To explore these issues, we studied how customers participate in NPD for major innovation, comparing projects that succeeded and failed. We examined small technology firms because this context allowed for rich insight to what customers actually do during NPD.

What did we find? Two approaches to NPD and ten ways that customers participate in creating major innovation.  The successful innovators pursued an atypical process: "almost ready, fire, do a bit more, re-fire." They had no conventional market assessment and made very early sales of a not-nearly-ready technology. These firms were not customer-centered. Rather, they treated customers as co-innovators, mobilizing a mix of present and potential downstream customers for trial-and-error learning. Customers were sometimes lead-users but often, they were simply keen to play with new technology. Critically, they were active in most of the roles we identified, and in every NPD activity. In clear contrast, the firms with MI failure took a more traditional approach to NPD. They followed clear stages of development where customer participation was limited to certain activities and very few roles.

The analysis appears in the November 2012 issue of the American Marketing Association's Journal of Marketing (Vol. 76, pages 87-104).

"Any firm new to major innovation is dealing with 'newness' because the technology and market is so unknown. As a result, we think even large firms can learn from our study, if they are willing to break-out of the step-by-step and risk-averse models learned in business school." [ Nicole Coviello].

Our results suggest that to succeed with major innovation, a firm should NOT follow an analysis-driven stage model. Instead, they should cultivate an iterative approach to NPD, continuously involving customers in different ways. This means being willing to: (1) share in knowledge generation and (2) share technology early. This entrepreneurial approach to co-creation helps mitigate risk through early buy-in to the innovation, early market access and rapid development of a market position.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs