Market concentration and effectiveness of co-creation (2011)

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Information about Market concentration and effectiveness of co-creation (2011)
Marketing

Published on March 9, 2014

Author: piotrbakker

Source: slideshare.net

Description

Slides for my master thesis presentation. The study showed that regardless of the level of market concentration, co-creation as a positioning strategy was always superior to the traditional value creation mode. The results also provided evidence for the stability of the preference for co-creation across different levels of perceived freedom of choice. Furthermore, the effectiveness of co-creation as a positioning strategy has been unaffected by the ratings of product performance attributes, such as innovativeness and reliability, adding more weight to the argument about this strategy’s strength.

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 7

Success stories 8

Success stories 9

Non-participating users 10

Positive effects Innovation ability Customer orientation 11

Negative effects User expertise Design complexity 12

Market concentration 13

Market concentration high concentration low concentration 14

Market control “ “ When cryptomonopoly is assumed it no longer follows that any of the old goals of social efficiency are realised. John K. Galbraith, American Capitalism (1952, p.43) 15

Market control Prices Innovation Technical advance Culture 16

Attitude change: positive 17

Attitude change: negative 18

Consumer resistance 19

Consumer resistance 20

Consumer resistance 21

Consumer resistance 22

Research question Does market concentration play a role in the effectiveness of co-creation? 23

2.Present study. 24

Effects of market concentration high concentration co-creation 26 25

Effects of market concentration low concentration co-creation 26

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. 27

Conceptual model market concentration value creation strategy behavioural intentions 28

Methodology 29

Industry software for video editing 30

2 × 2 between subjects design VS company-driven user-driven 31

2 × 2 between subjects design VS high concentration VS low concentration 32

Functionality & Innovativeness 6.4 5.7 33

Functionality & Innovativeness 6.4 5.7 34

Reliability & Usability 5.9 5.2 35

Reliability & Usability 5.9 5.2 36

Which option will they choose? ? company-driven user-driven 37

3.Findings. 38

Participants 600 invitations 162 usable responses No reward for participation 39

Participants 56% male 54% non-student Mean age: 27 years (SD = 7.90) 40

Manipulation and control checks 1.Type of value creation strategy 2.Level of market concentration 3.Differences in attribute rating ✔ 1.Involvement 2.Product knowledge 3.Expertise ✔ 41

So, did market concentration play a role? 42

Market concentration and preference for type of value creation strategy Choice shares by market concentration 100% 80% 28,2% 31,0% 71,8% 69,0% Low concentration Company-driven User-driven High concentration 60% 40% 20% 0% Company type choice by market concentration: χ2(1) = 0.49, p = .48 43

Market concentration and preference for type of value creation strategy Choice preference 7 User-driven Company-driven 6 5 4,72 4,83 4 3 3,05 3,28 2 1 0 Low concentration High concentration Company 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") 44

Market concentration and preference for type of value creation strategy Option “1” adoption likelihood 7 User-driven Company-driven 6 5,21 5 4,52 4 4,11 3,88 3 2 1 0 Low concentration High concentration Company type preference by market concentration: F = 3.13, p = .08; measured on a seven-point Lykert-type scale (1 = Very unlikely and 7 = Very likely) 45

Market concentration and preference for type of value creation strategy Option “2” adoption likelihood 7 User-driven Company-driven 6 5 4 5,03 3,87 4,85 4,15 3 2 1 0 Low concentration High concentration Company type preference by market concentration: F = 0.41, p = .84; measured on a seven-point Lykert-type scale (1 = Very unlikely and 7 = Very likely) 46

H1: Preference for a user-driven value creation strategy is associated with market concentration. 47

Value creation strategy and preference Frequency of choice 100% User-driven Company-driven 80% 60% 40% 20% 67,9% 32,1% 0% 48

Value creation strategy and preference Adoption likelihood 7 User-driven Company-driven 6 5 4 3 4,88 2 3,54 1 0 Company type adoption likelihood: t(161) = 3.90, p < .001; measured on a seven-point Lykert-type scale (1 = Very unlikely and 7 = Very likely) 49

Value creation strategy and preference Contriubtion to choice preference (R-statistic) 0,30 Company type description Functionality & Innovativeness 0,14 Reliability & Usability 0,16 0,0 0,2 0,4 0,6 0,8 1,0 Relative contribution of company type description and performance attribute ratings: χ2 = 32.10, p < .001. 50

Reasons for co-creation preference Frequency of reasoning behind preference Perceived customer orientation Perceived expertise 31% 23% Customer orientation Target segment Diversity Numbers Expertise 4% 4% 39% Perceived Innovation ability 51

Reasons for co-creation preference Frequency of reasoning behind preference Perceived customer orientation Perceived expertise 31% 23% Customer orientation Target segment Diversity Numbers Expertise 4% 4% 39% Perceived Innovation ability 52

H0: Consumers prefer user-driven value creation strategies to company-driven ones 53

4.Implications. 54

Theory 1.Generalisability 2.Counter mediation 3.Consumer resistance 55

Practice 1.Focus: A.Novice users B.Target segment 2.Avoid: A.Market structure B.Freedom of choice 56

Limitations “ “ Like the physical, the psychical is not necessarily in reality what it appears to us to be. Sigmund Freud, “The Unconscious” in The Freud Reader (1989, p.577) 57

Limitations 1.Student sample 2.Atypical product descriptions 3.Experimental design 4.Polar opposites 58

Future research 1.Wider demographic 2.More product categories 3.Different levels of empowerment 4.B2B 59

Conclusion 1.First study 2.Inconclusive evidence 3.Unsolved mysteries 4.More research needed 60

Thank you!

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