Idea Competitions in New Service Development: Co-creation with a Certain Consumer Group

Abstract

New service development (NSD) processes are often ineffective in bringing about successful services because companies miss what is fundamentally important to their consumers (Kumar and Whitney 2003). Therefore it has been advocated to better align key activities in development projects with the needs of actual and potential consumers (Jaworski and Kohli 1993) and to integrate consumers into the development process (von Hippel 1986). Thus, the integration of consumers for cocreating value has been stressed as critically important (e.g., Kristensson and Magnusson 2005). Idea competitions are one way to integrate consumers (Piller and Walcher 2006). For example, Volkswagen calls for ideas about possible applications regarding eco mobility, games and fun, networking and communication, productivity and travel utilities (www.app-myride. com). Even though there is a huge agreement that consumers are able to contribute useful ideas during the ideation phase, there is little examination of which consumers should be involved and how they should be targeted in ideation of NSD (e.g., Piller and Walcher 2006). Based on the notion of the lead user concept (von Hippel 1986) it can be proposed that consumers are different regarding their qualifications for NSD (Rogers 2003). In this context, a clear understanding of critical user characteristics enhances the effectiveness of the search for valuable consumers. Following Nambisan’s (2002) classification of consumer roles in innovation development, a company integrates consumers via idea competitions to make use of them as a resource. Using consumers as resources for new service ideas provides companies with challenges such as the selection of consumer innovators, the establishment of ties with them and the creation of appropriate incentives to foster consumer motivation to contribute new service ideas (Nambisan 2002). These challenges are addressed with this study. This paper investigates the relationships between different consumer characteristics supplying ideas as well as their influence regarding ideas for new online services. In particular, this study examines whether consumers’ ideas become of higher or lower quality for companies depending on specific characteristics