Defining Customer Innovation
I often get asked what I
mean when I use the phrase "Customer Innovation". Here's my
explanation:
Customer innovation
incorporates a number of emerging concepts and practices that help
organisations address the challenge of growth in the age of the empowered and
active customer (both business and consumer). It demands new approaches to
innovation and strategy-making that emphasise rapid capability development,
fast learning, ongoing experimentation and greater levels of collaboration in
value-creation. Customer innovation impacts upon all the following activities,
functions and disciplines:
Marketing
strategy and management
Brand strategy and management
Communications strategy
Customer experience design and delivery
Customer relationship management
Customer service design and quality management
Market-sensing and customer learning
Market and customer segmentation
Creativity and knowledge management including market research
Partner and customer collaboration
Brand strategy and management
Communications strategy
Customer experience design and delivery
Customer relationship management
Customer service design and quality management
Market-sensing and customer learning
Market and customer segmentation
Creativity and knowledge management including market research
Partner and customer collaboration
For me customer innovation is not only an
important perspective on value-creation but a whole new strategy discipline
that organisations must embrace if they are to pursue growth successfully in
the future. Put another way, customer innovation impacts the fundamental means
by which value is created and growth sustained
We underscore the importance of innovation but we
use the term more broadly than do most executives. Executives usually think in
terms of product innovation as in generating the next wave of products that
will strengthen market position. But product-related change is only one part of
the innovation challenge. Innovation must involve capabilities; while it can
occur at the product and service level, it can also involve process innovation
and even business model innovation, such as uniquely recombining resources,
practices and processes to generate new revenue streams. For example, Wal-Mart
reinvented the retail business model by deploying a big-box retail format using
a sophisticated logistics network so that it could deliver goods to rural areas
at lower prices.
Example for consumer innovativenss
For example, based on this
research, Tellis, who has experience launching new products via his past
service as a sales development manager at Johnson & Johnson, recommended
that businesses employ a “waterfall strategy” (i.e., a country-to-country
tiered release) versus a “sprinkler strategy” (all at one time) for new
products, making sure to vary their approach depending on the country and
product category
Governments can apply this research when introducing new products, such as
fuel-efficient cars, and services to their citizens. “This study tells them
whom to target first in which regions,” Tellis said.
Management consultant firm A. T. Kearney funded the study’s data collection, while Don Murray, executive chairman of Resources Global Professionals, provided the annual grant to the USC Marshall Center for Global Innovation, which paid for the data analysis.
Management consultant firm A. T. Kearney funded the study’s data collection, while Don Murray, executive chairman of Resources Global Professionals, provided the annual grant to the USC Marshall Center for Global Innovation, which paid for the data analysis.
Compulsive
Consumption
O'Guinn & Faber (1989:148) defined compulsive
consumption as “a response to an uncontrollable drive or desire to obtain, use
or experience a feeling, substance or activity that leads an individual to
repetitively engage in a behaviour that will ultimately cause harm to the
individual and/or others.” Research has been carried out to provide a
phenomenological description to determine whether compulsive buying is a part
of compulsive consumption or not. The conclusion reached after analysing both
qualitative and quantitative data stated that compulsive buying resembles many
other compulsive consumption behaviours like compulsive gambling, kleptomania
and eating disorders (O' Guinn & Faber, 1989:147). Hassay & Smith
(1996) hold a similar view and refer to compulsive buying as a form of
compulsive consumption as well. Besides personality traits, motivational
factors also play a significant role in determining the similarities between
compulsive buyers and normal consumers.
Example Compulsive Consumption Consumer
Examples include uncontrollable shopping, gambling, drug addition, alcoholism and various food and eating disorders. It is distinctively different from impulsive buying which is a temporary phase and centers on a specific product at a particular moment. In contrast compulsive buying is enduring behaviour that centers on the process of buying, not the purchases themselves.
Examples include uncontrollable shopping, gambling, drug addition, alcoholism and various food and eating disorders. It is distinctively different from impulsive buying which is a temporary phase and centers on a specific product at a particular moment. In contrast compulsive buying is enduring behaviour that centers on the process of buying, not the purchases themselves.
Consumer
ethnocentrism
Consumer ethnocentrism specifically refers to
ethnocentric views held by consumer in one country, the in-group, towards
products from another country, the out-group (Shimp & Sharma, 1987).
Consumers may believe that it is not appropriate, and possibly even immoral, to
buy products from other countries.
is derived from the more general psychological
concept of ethnocentrism.
Basically, ethnocentric individuals tend to view their group as superior to others. As such, they view other groups from the perspective of their own, and reject those that are different and accept those that are similar (Netemeyer et al., 1991; Shimp & Sharma, 1987). This, in turn, derives from earlier sociological theories of in-groups and out-groups (Shimp & Sharma, 1987). Ethnocentrism, it is consistently found, is normal for an in-group to an out-group (Jones, 1997; Ryan & Bogart, 1997).
Basically, ethnocentric individuals tend to view their group as superior to others. As such, they view other groups from the perspective of their own, and reject those that are different and accept those that are similar (Netemeyer et al., 1991; Shimp & Sharma, 1987). This, in turn, derives from earlier sociological theories of in-groups and out-groups (Shimp & Sharma, 1987). Ethnocentrism, it is consistently found, is normal for an in-group to an out-group (Jones, 1997; Ryan & Bogart, 1997).
Example for consumer ethnocentrism
Also, according to some researches, it was thought that there is a
relationship between attitudes toward foreign retailers’ products and some
demographics characteristics such as gender, education, income and age.
When doing this research, it was aimed at determining consumer attitudes
towards foreign retailers’ products. The research starts with a literature
review which includes international retailing in Turkey, attitudes towards
purchasing foreign retailers’ products (general review), effects of age and
education level on attitudes, influence of consumer ethnocentrism on attitudes towards
foreign retailers’ products respectively. Secondly, methodology part that has
explanations about how this research was conducted, was presented. Then,
findings which derived from questionnaire results and its SPSS analyses, are
presented. At the last stage of the research, discussion, limitations and
future researches are discussed.
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