Does your business identify your customers' needs for new product development (NPD)? And how can customer involvement in the process of NPD be effective?
The idea seems simplistic in real-life marketing experience. Experienced managers may say, "Of course, we design our products based on our customers' needs! The ultimate momentum behind the whole idea of business management is revolving around the customers and their needs."
However, research from the Journal of the Academy of Marketing Science may have more to say about that than the experienced managers do. Professor Anna Shaojie Cui and Professor Fang Wu conducted research to analyze the influences on and the effects of customer involvement in the innovation of new products.
Three types of customer involvement strategies in NPD are identified as:
- Customer involvement as an information source
- Customer involvement as co-developers
- Customer involvement as innovators
1. Customer Involvement as an Information Source (CIS)
The traditional and most-widely used method for using customers' knowledge in NPD is acquiring the information from them. This could be directly done (as in the case of feedback or ratings by customers) or indirectly done (as in the idea of gathering and analyzing the most implicit data from the customer behavior, mindset, decision-making, etc.).
Easy and manageable as it seems, this method has some shortcomings, such as:
- Customer need heterogeneity. The wide range and diversity of the customers' needs might make it unthinkable to involve all of them in the NPD process. Consider Nike and its $28 billion in annual sales. How could it possibly be able to consider the whole range of customer need heterogeneity it faces?
- Customer need tacitness. The second problem is the difficulty in interpreting the customer needs for the employees to work on. Due to the cultural diversity, over-personalized expectations, or special physical or mental situations, customers' ideas might not be well understood by the company's employees or they might even think them absurd and not worth trying.
2. Customer Involvement as Co-developers (CIC)
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