The phenomenon of user innovation has been thoroughly described in the past and its rise seems to continue: Some researchers praise the new area of bottom-up economics, some call it a paradigm shift and some simply put it as the age of the consumer innovator. It has never been easier to turn one’s own need-driven idea into a working solution. Once insurmountable barriers are turning into small hurdles when it comes to the value-chain of innovation. This includes, but is nowhere limited to, seeking solutions and expert help for free within communities, cheap access to machines for (rapid) prototyping, getting almost riskless funds through crowdfunding to turn one’s idea into a commercially viable product all the way up to an easy access to the market place via the internet. Yet, recent studies show that only a small part of all user innovations diffuse and only a fraction is being commercialized. According to de Jong, et al. (2015), this market failure poses a potential loss for social welfare.
However, and in line with this terminology, the market or demand side is largely neglected in extant literature. Simply speaking, if nobody is willing to adopt user-innovated products, the potential loss for social welfare might be overestimated. In order not to be prone to some kind of pro-user-innovation-bias, we want to investigate whether or not consumers are willing to adopt products developed and commercialized by user innovators. Next to willingness, Hyysalo, et al. (2012) show, that some user innovations aren’t even suitable for adoption. While this shouldn’t be left unmentioned, these innovations weren’t designed for diffusion in the first place so that this aspect won’t be part of our further investigations.
Still, the demand for user-innovated products remains unclear. Existing research on the commercialization of user-innovated products (user entrepreneurship) mostly focuses on the pathways of entrepreneurship or on the innovator himself. Note, that there are (at least) two ways of commercializing a product for a user innovator: via licensing one’s product to an incumbent cooperation or by truly turning into an entrepreneur. Both are covered in our research. Some studies have been conducted on the effect of how labeling something as a user-innovated product influences the perception on the market side. However, these studies fall in a large extant into the realm of co-creation rather than user entrepreneurship. That is, that users where only attributed a role in the ideation process, which misses out an important part on the consumer side: most certainly there is a difference between trusting someone with having a good idea for a product innovation and turning this idea into a commercially attractive product under one’s own steam.
Potential adopters have to make judgments and decisions based on the limited information and knowledge available to them. While this is true for any kind of innovation, it is especially critical for user-innovated products – products without a trusted brand one can infer from and with limited if even existent possibilities to try out prior to purchase (e.g. in a store). The research on consumer inference making knows various types of inferences a consumer might draw from (e.g. the country-of-origin). Brown and Dacin (1997) show that corporate associations can influence perceptions of the company's products. Therefore, we would like to answer the following research question:
RQ1: Which influence does product origin (user innovation vs. producer innovation) have on customer acceptance?
Another overlooked aspect in the research on the diffusion of user-innovated products is how consumers perceive the product’s attributes. As perceived product attributes are proven to be an excellent indicator for adoption, we would like to answer the following research question:
RQ2: Which influence does the product origin have on perceived product attributes?
Schreier, et al.(2012) show that labeling a product as user-innovated (i.e. the idea originated from a user) had a positive effect on the perceived innovativeness of a company for products of low complexity. However, this effect was reversed when they tested for products of high complexity. Therefore we would like to answer the following research question:
RQ3: Does acceptance vary between different product categories and products of different complexity?
To answer these questions, we conduct a 5-between-subject online-experiment (product origin: user innovation, licensing, incumbent, no story and real story). Participants have to evaluate two products of different complexity from two different categories: gardening and cycling. The products all originate from the crowdfunding-platform Kickstarter. Whilst not necessary for the experiment, we still chose products which from their story of origin showed some level of user innovation.
We use overall consumer appreciation and willingness to pay to measure the overall acceptance and the four most common perceived product attributes to evaluate the perceived product characteristics. Namely these are relative advantage, perceived complexity, perceived risk and compatibility. Furthermore, we control for consumer domain knowledge, familiarity with user innovation and consumer innovativeness.
At the moment we are pretesting the online experiment, which should allow us to eliminate repetitive items and to check whether our manipulations are effective. At the beginning of August the experiment should be successfully completed and first results might be presented. The findings of this study ought to lead into a follow-up study, which will investigate how an individual user innovator might increase the consumer acceptance for his product.
160513_Consumer_acceptance_of_user_innovated_products_OUI_PosterSession_AndreSchorn.pdf 