Consumer Motivations

for the Engagement

in FMCG-Crowdsourcing Measures

Program: International Marketing & Brand Management

Course: Internet Marketing, Branding and Consumers BUSN32

Professor: Veronika Tarnovskaya

Author: Jennifer Joan Williams

Related question: Who is the New Consumer on the Internet?

Number of Words: 2997

BUSN32 Internet marketing, branding and consumers Individual Assignment

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Index Introduction and Purpose .......................................................................................................................................... 3

1. Who is the New Consumer on the Internet?............................................................................................. 3

2. Crowdsourcing as Part of Co-creation ........................................................................................................ 4

3. The Crowdsourcing Phenomenon ................................................................................................................ 4

4. Theoretical Framework .................................................................................................................................... 5

4.1 Maslow 2.0 and the Motivation-Ability-Opportunity Model ........................................................... 5

4.2 Co-Creation and Crowdsourcing................................................................................................................. 7

5. Engaging Consumers in FMCG Crowdsourcing Activities................................................................... 8

5.1 Crowdsourcing Category: New Product Features and Innovations – Threadless.................. 8

5.2 Crowdsourcing Category: Product Designs, Names & Logos- Pril ................................................ 9

6. Conclusion .............................................................................................................................................................. 9

Appendix ........................................................................................................................................................................ 11

References ................................................................................................................................................................ ..... 12

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Introduction and Purpose As modern internet technologies continue to develop and spread, they constantly influence the way in which organizations interact with consumers. The increasing number of information and communication technologies has facilitated consumers’ possibilities to access, comprehend and share information, which resulted in a power shift towards consumers1

Thereby empowered consumers are interacting with companies, brands and other consumers and creating and sharing their own content over “one-to-many” and “many-to-many” online communication channels. As part of a steadily growing network consumers act as collaborators, co-developers and even competitors when creating content and extracting business value.

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2 The role of the customer as co-producer of mainly intangible values when engaging in marketing activities furthermore shows a shift towards a service-centered logic for marketing3

Virtual customer integration represents a promising tool.

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1. Who is the New Consumer on the Internet?

to engage consumers in co-creation processes, especially in the FMCG industry. Here crowdsourcing measures are the tool of choice for the integration of virtual customers, to engage in co-creational processes. This short paper aims to characterize the new consumer on the internet, explain his role in the Web2.0 environment and sets focus on his motivation to participate in co-creation activities, especially through engaging in crowdsourcing-activities. So far existing marketing literature did not attach great importance to details of consumer-motivation to engage in virtual co-creation tasks of crowdsourcing within the FMCG industry, a gap which is examined by this paper.

The species of the new, empowered consumer seeks customization and personalization of high involvement products and thereby making them his own creation and uses them as display of his personality. Empowered and active he takes control of the product he wants to purchase and sometimes even of the brand offering it. The thereby encouraged change in marketing approaches brought about new possibilities for consumers to express their identity through a variety of formats offered by companies.5

The new consumer furthermore seeks affiliation to communities of likeminded consumers and demands multiple interaction channels.

6 These characteristics are added to the rather classic ones of competitive value and choice, which are also intensified due to increased consumer access to accurate, recent and unbiased information. Once organizations owned all the information, but now online agents allow easy prices comparisons and consumers are providing reviews, ratings and general information for other consumers.7

Due to almost unlimited ways of online communication consumers are aware of a company’s shortcomings and malpractices and can share their dissatisfaction with the whole world.

8 It would only take one customer, armed with PC and a Web site, to take on a large corporation and cause considerable damage by for example creating so called “spoof sites”.9

1 Pires et al, 2006 2 Prahalad and Ramaswamy, 2000 3 Vargo and Lusch, 2004 4 Füller et al, 2010 5 Chernev et al, 2011 6 Wind, 2008 7 Pitt et al, 2002 8 Pitt et al, 2002 9 Pitt et al, 2002

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As one can see, brand value creation in the current market is dominated by consumer agents. Co-creation concepts offer a possible solution to engage active consumers and extend trust through an increased brand-authenticity. The aim is to engage the consumer as co-creator, as there is probably nothing more authentic for a consumer than something he has created himself.10

2. Crowdsourcing as Part of Co-creation

More and more companies invite consumers to actively participate in product development and evaluation. Taking their role as co-creators, they discuss possible improvements and solutions, individualize prototypes, test product features or generate product ideas.11 Thereby active consumers give input about products or services they really want to purchase, use or see and enable companies to offer products which are truly demanded. This interactive value creation is basically conducted when an organization opens a challenge to solve a problem or design a product, to a broad mass of consumers, users or an online community. Consecutively individuals contribute to solving the problem, evaluating a concept or designing a product, and the conducting organization takes ownership of the ideas and incorporates them.12 The term “crowdsourcing” was coined by Jeff Howe, to describe this Web-based business model, which harnesses the creative solutions of a network of individuals through an open call for proposals.13 Crowdsourcing campaigns in marketing are particularly aiming at a mass of participants and are utilized to reinvigorate a company’s business or brand. These campaigns can be divided into three major categories: New product features and innovations, Commercials and Product designs, names & logos.14

3. The Crowdsourcing Phenomenon

In recent years crowdsourcing became a popular tool for the FMCG industry. Although it is not a new phenomenon as companies have been generating consumer insights and knowledge on product developments, design and advertising through focus groups and traditional market research, online crowdsourcing remains a special case in which the particular needs of the new consumer-generation are triggered.

Numerous examples in the FMCG industry prove the attraction caused by crowdsourcing measures. When asked to upload their favorite design (Pril), customize beer bottles for themselves (Heineken), create a new drink flavor (VitaminWater) or make their own advertisements (Doritos) consumers happily engage. Capitalizing on the possibilities offered through Web2.0, organizations entice their target group to work on behalf of the brand and “play the brand’s game”15. Being only constrained by the imagination and passion of the participants- there is, so to speak, no limit of possible outcomes.16

10 Bertilsson and Casinger, 2010 11 Füller et al, 2010 12 Brabham, 2010 13 Howe, 2006 14 Rudenko, 2011 15 Fournier and Avery, 2011 16 Howe, 2008

As many consumers share their participation via social media when for example letting their friends vote for their uploaded design in a contest or by word of mouth, the company generates spinoff-effects and profits in more than one way. Nevertheless this measure attracts broad masses and not professional niches, like in software development for example. Therefore companies need to be

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aware and prepared to be parodied or played with. Several brands had to learn, that crowdsourcing is not a cheap way to drive business, but can be quite costly and time consuming, as some of the active consumers show their power and take advantage of it to “scrawl digital graffiti on the sponsor and its brand”.17

4. Theoretical Framework

4.1 Maslow 2.0 and the Motivation-Ability-Opportunity Model When trying to understand what triggers the attraction to engage in crowdsourcing activities, consumer characteristics and needs have to be taken into consideration again. The options to express one’s identity, satisfy social needs through sharing of consumption related experiences and to join online communities provided by the internet are numerous18 and not reflected by existing models. The theory of human motivation of A. Maslow19

Figure 1: “Human needs in the Web 2.0”, modified from Maslow (1943)

builds the foundation for the description of consumer needs. But considering the empowered consumer, there is a necessity for a revised model, adapted to the world of today; Maslow 2.0. Although motivations and behaviors also depend on the environment, certain developments in our surrounding have changed our needs and it is time to include these changes into existing theoretical frameworks.

Maslow’s pyramid starts out with the undisputable Biological and Physical needs (breathing, food, water and sleep), Safety needs (property, health) and the need of Belongingness and Love (friendships, family, intimacy). Subsequently to the need of belonging one can say that respective for online engagement of consumers there is a Connectivity need, as it marks the essential requirement for the communication between parties. Once a need-level is met, an individual seeks to satisfy growth needs by going on to the next level, following the drivers of 17 Story, 2007 18 Christodoulides, 2009 19 Maslow, 1943

Self-Enhance

mentSelf

Actualization

Co-Creation Needs

Content Sharing Needs

Esteem Needs

Connectivity Needs

Belongingness and Love Needs

Safey Needs

Biological and Physical Needs

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personal growth. The Connectivity-Need-level includes the possibility to express the personal identity (creating social media-profiles) and also belonging to online communities (people with similar tastes, opinions). The following level of Esteem needs refers to Maslow’s original again, although the need for self-esteem, achievement and respect by others refers in this case to the engagement in online communities, blogs, and social networks to fulfill the need for recognition and achievement and thereby provide a way to develop a virtual status and reputation. Content-sharing is the next step of engagement, meaning the need to share consumption related experiences, pictures, video, or audio-material. After the sharing of content and distribution of information the next step in personal growth would be the need to engage in Co-creation processes (product development, open innovation, crowdsourcing) to get him further towards Self-actualization by contributing to value creation and mutual problem solving. It includes the need to ask for help and provide help to others. Self-actualization, according to Maslow, is the need for morality, creativity and problem solving, therefore it not completely disconnected from Co-creation, and- as already stated complements the prior step. Finally, as tip of the pyramid; Self-enhancement refers to the need for further self-development through access to a world of ideas, the need to constantly improve oneself, inspired by the shared content or co-created value of other individuals.

After identifying specific needs in the web 2.0 environment, the MAO-model of Motivation-Ability-Opportunity allows to combine consumer Motivation and Ability with the Opportunity created by organizations when for example operating crowdsourcing measures. The MAO-model is an integrative model for consumer action, which aims to improve predictions of behavior by incorporating the concept of “ability” in addition to the “motivation” component for the consumer-side and “opportunity” of external influences/ the company side. Figure 2: “MAO-model of consumer behavior in the Web 2.0”, modified from Ölander and Thøgersen (1995) Motivation is determined by the need-state of the consumer, based on Figure 1 and can differ among consumers. Furthermore the attitude towards the company/ brand conducting the measure, the perceived level of empowerment and the alignment with social norms affects consumers’ intention and therefore motivation to participate. The Ability component relates to consumers’ knowledge/ capability, resources and habits. The influence of Ability on consumer intention is characterized by the interrelating arrow. The Opportunity component relates to the

ABILITY Knowledge Habits Resources

OPPORTUNITY External Conditions (overall and situational)

BEHAVIOR Participation

MOTIVATION

Intention

• Needs (Maslow 2.0)

• Attitude towards Company/Brand

• Attitude towards behavior

• Perceived empowerment

• Social Norms

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facilitation of external conditions, in this particular case the design of the crowdsourcing tool and the process management of the company. Opportunity also interacts with the intension as the tool design has direct influence on the perceived empowerment and the related enjoyment of the virtual interaction20

4.2 Co-Creation and Crowdsourcing

. As the participation experience affects the fulfillment of needs, perception of empowerment and attitude towards behavior and the company/ brand, a cyclic influence is formed.

The concept of co-creation can be divided into four major parts depending on the level of openness of measures (directed towards masses or selected participants) and the ownership of the outcome (owned by initiator or by contributor). These two dimensions form a matrix, describing the four types of co-creation: The Club of Experts, the Crowd of People, Coalition of Parties and the Community of Kindred Spirits.

Figure 3: “Four Types of Co-creation”, Pater (2009) For the purpose of this paper the focus is set on crowdsourcing and therefore only concepts owned by the initiator, but with the openness to the mass-market will be examined closer. When referring to the “crowd” a high number plays an important role and almost anyone is invited to participate. Furthermore must be understood, that the crowd voluntarily engages in the value creation process and needs to be rewarded accordingly through recognition, attention, and eventually tangible goods.21 When conducting crowdsourcing measures companies offer online platforms through which people get in contact with the company and also rate and respond to each other. Furthermore social networks mediate the propagation and validation of knowledge at a much faster pace than traditional methods22. As crowdsourcing is constructed to gain input from the masses, it takes time and organizations cannot be sure that the best people will (be motivated to) contribute.23

20 Füller et al, 2010 21 Brabham, 2011 22 Huberman, 2008 23 Pater, 2009

Within the crowd, consumers can take different roles. There are for example creators (generating the driving content), critics (reacting to content), and spectators (consuming the created content). Depending on the focus of which target group is supposed to

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be addressed primarily the social application needs to be designed respectively.24 When for example designing advertisement-crowdsourcing-measures for the FMCG industry, a certain degree of “gamification” (the use of game design attributes to enhance non-games) can serve to attract the crowd, which is motivated by game mechanics25. In this particular industry crowdsourcing is often used as promotional tool with a seeding objective26

5. Engaging Consumers in FMCG Crowdsourcing Activities

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5.1 Crowdsourcing Category: New Product Features and Innovations – Threadless

Threadless is a fashion retail website and online artist community in one. The sold designs are based on uploads and choices of an online community. A constant “open call” on the company website attains designs which are submitted online to the page and put up to a public vote. Based on their rankings, certain designs are selected, produced and sold worldwide. Designers whose work is printed are rewarded monetary.27

In the early days of the company the designers were more motivated to make their designs known by having them printed and sold through Threadless- it was “where unknown designers went to make their names”

The company keeps rights to the design on clothing, but the designers keep their design-rights for all other media. Threadless has not only hosted “a” crowdsourcing contest, crowdsourcing is furthermore their business concept.

28 which shows the company driving impact of Content-sharing needs and Co-creation needs of consumers in the web 2.0. The artists promote their designs, which developed through exchange with other community members, promote their submissions on websites and blogs and have their friends vote for it.29 The motivation behind this creation of virtual reputation and status relates to Maslow’s Esteem needs, and furthermore again to Co-creation needs when considering the joint development of a design based on community feedback. Within this community members take different roles. Many non-artist community members offer their opinion on numerous designs.30 Their way of participation can be characterized as critics and spectators. Research has shown that among surveyed Threadless customers only five percent were buying a shirt without first voting on other designs. It seems that "Almost no one was simply consuming," quite contrary "They were all participating".31

Considering the active online community as biggest asset of the company, authenticity of the company becomes an important issue. When Threadless engaged into a partnership with the big fashion retailer GAP, community members actively shared their dissatisfaction

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24 Bernoff, 2008 25 Shaughnessy, 2011 26 Pater, 2009 27 Threadless, 2011 28 Chafkin, 2008 29 Chafkin, 2008 30 Chafkin, 2008 31 Chafkin, 2008 32 Craquehaus [=Pseudonym of forum post], 2012

, which can be seen when examining blog posts with high response rates on the company website. Such dissatisfaction after participating actively can easily result in a change of attitude towards Company/Brand, the own participation behavior and level of perceived empowerment, leading to a possible decrease in intention and refusal of participation.

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5.2 Crowdsourcing Category: Product Designs, Names & Logos- Pril

The German consumer goods company Henkel started an open call for a design competition for its dishwashing detergent brand “Pril”. As reward the winning design was supposed to be launched as special edition. Users were able to create their own design, share their opinion on other designs and vote for their favorites. With a response rate exceeding 33,000 designs the company believed in a success of the crowdsourcing competition.33 However, not all of the submitted designs met the expectations of the brand managers. One participant submitted rather provoking designs, as a joke to contrast the “flowery” other designs (Appendix 1, Figure a and b). Unfortunately for Henkel these designs were voted most popular among users. As managers perceived this as threat for the brand-image, they decided to change the rules during the contest, so designs would first be reviewed by a jury. Consequently a protest wave of participants intruded the company’s Facebook-page34. Henkel intervened by deleting certain consumer-posts and reassessing votes for designs- downgrading “Tastes yummy like chicken!” and the “Rage-face”, which resulted in an even larger uproar among the community. In the end of the contest two designs out of the ones with the lower votes were declared winners (Appendix 1, Figure c and d) although Breuer’s designs ranked first and second popular.35 Henkel tried to downplay the manipulation, arguing that “It was not our aim to only have designs which match our brand-image, but we need to consider the acceptance in retail distribution”.36

This case indicates a possible cycle of negative effects relating to the integrated MAO-model. When engaging consumers in crowdsourcing measures a company needs to do even more than setting up a contest. Customer liaison and support are important to actively manage the dimensions of Opportunity and Behavior as they directly affect consumer Motivation. The negative experience, which is seen in the amount of complaints on the company’s Facebook-profile clearly affects the attitude towards the company and brand, as well as the attitude towards the own participation and the perceived empowerment- which was undeniably suppressed by the company. Ideally Perceived empowerment would lead to increased trust in the empowering organization, which enhances the Intention to repeat the empowering behavior.

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6. Conclusion

While analyzing these cases and applying my modified models of “Human needs in the Web 2.0” and “MAO-model of consumer behavior in the Web 2.0” I was not able to identify the one particular motivation which could be applicable to all crowdsourcing activities, but rather a set of common denominators. However, motivations will most likely be rather unique, based on subjective needs and the specific context of the crowdsourcing measure. For this conclusion the context of crowdsourcing measures in the FMCG industry needs to be considered, as crowdsourcing is primarily utilized as branding campaign. Rather than to retrieve knowledge from consumers, it aims to build goodwill and brand loyalty38

33 Breithut, 2011 34 www.facebook.com/pril 35 Reputation-manager, 2011 36 Susanna [=Pseudonym of blog post], 2011 37 Conger and Kanungo, 1988; Deci and Ryan, 2002 38 Howe, 2008

.

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Nevertheless the analysis of the discussed cases indicates that consumers’ engagement is mainly motivated by: Connectivity Needs, Esteem Needs, Content-sharing Needs, Co-creation Needs, and Self-actualization Needs. Combined with the Attitude towards the company/ brand and behavior as well as Perceived level of empowerment and Standards of social norms, these needs affect the Intention to participate in crowdsourcing measures. Furthermore the Motivation correlates with the consumer’s Ability and the Opportunity provided by the company. As the Pril-case has proven, the establishment of an optimal technological basis and set of rules for the crowdsourcing measure, relating to consumer Abilities and external and internal Opportunity are only prerequisites. The management of the process should not be underestimated, as its direct effects on the Motivation drivers are undeniable. Companies make use of consumer needs and reward participation with their fulfillment, by providing possibilities and platforms to get social attention, achieve virtual reputation and status, and acknowledgment of skills. Although the Threadless-case relates to Self-actualization needs of designers, and touches upon Self-Enhancement when considering the fact that designers discuss ideas back and forth and learn from each other to improve their own skills, it is probably not the case that FMCG-crowdsourcing measures can fulfill the pyramid top need of Self-Enhancement. This would be more likely for other crowdsourcing contexts or co-creational processes. The recent attention in the FMCG industry shows certain indicators of a “hype” which’s attractiveness could soon wear off, if every company “crowdsources” every design, commercial or product innovation. Also the spinoff effects, generated when consumers share their participation experiences via social media, are likely to turn into reluctance when their numbers increase and “spam” the virtual communication channels. This would result in the loss of one of the greatest benefits for consumer brand companies, as future spinoffs exceed the value of direct spinoffs (Figure 4).

Figure 4: Four Areas of Value in Co-creation

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Appendix

Appendix 1 Pril design Crowdsourcing-contest

Figure a: “Tastes yummy like chicken!”

Figure b: “Rage-Face”

Figure c: “Winning designs”

Figure d:”Top Design Gallery”

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References

Literature

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Online

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