Diffusion of Web-Based Product Innovation

Diffusion of Web-Based Product Innovation
Emanuela Prandelli, Gianmario Verona Deborah Raccagni
California Management Review, Summer 2006

Every manager knows it’s important to involve customers in the creation of new products. By becoming directly involved in the innovation process, customers can help companies better anticipate market changes.

However, the absorption of customer knowledge is not an easy task. It’s difficult to learn what customers want, and it’s also hard to transfer that knowledge.

The Web can greatly simplify these activities by making it easier to absorb customer knowledge at low cost at each stage of the innovation process.  The question is:  How are companies integrating Web-based tools into their Web sites to support cooperation with consumers at each innovation stage?

In “Diffusion of Web-Based Product Innovation,” in the Summer 2006 California Management Review, Emanuela Prandelli, Gianmario Verona, and Deborah Raccagni reveal what they’ve learned after analyzing more than 200 brand and corporate sites.  Prandelli and Verona are associate professors of management at Bocconi University in Milan, where Raccagni is a Ph.D candidate.

They found that a company’s capacity to absorb customer knowledge is vital at each stage of the product development process.  The first stage of new product development, idea generation, benefits considerably from the Web’s potential to enhance consumer input.

The simplest application consists of on-line questionnaires.  When searching for successful new product ideas, the goal should be to identify customer preferences and interact directly with them to gain new knowledge.

The questionnaire usually aims to improve selected aspects of the site, product, or service.  To enhance cus­tomer involvement in the idea generation stage, companies can even use on-line suggestion boxes where users express their own innovative ideas. For example, the Kashi site’s “My recipe” section invites customers to “send in your recipe.”

At the Ben & Jerry site, users can contribute new ideas for products, such as pre-packaged ice cream, as well as services, especially packaging and distribution. Procter & Gamble’s Web site has a suggestion box for customers in the “Share Your Thoughts” section.

Reward mechanisms for proposing innovative uses of company products can be found on the Hellman’s site, while market tests offering customers product samples are available on the P&G and Nestle sites.  Motorcycle companies, such as Ducati and Aprilia, also enc...