The “Right” Consumers for the Best Concepts: A Methodology for Identifying Emergent Consumers for New Product Development Donna L. Hoffman Praveen K. Kopalle Thomas P. Novak* Paper presented at ACR 2008 Donna L Hoffman is the Chancellor’s Chair and Professor of Marketing at the A. Gary Anderson Graduate School of Management, 900 University Avenue, University of California, Riverside, Riverside, CA 92521; Ph 951-827-4848; Fax 951-827-3970; Donna.hoffman@ucr.edu Praveen Kopalle is associate professor of business administration and faculty associate, Center for Digital Strategies at the Tuck School of Business at Dartmouth, Dartmouth College, Hanover, NH 03755; Ph: 603-646-3612, Fax: 603-646-1308, Praveen.kopalle@dartmouth.edu. Thomas P. Novak is the Albert O. Steffey Professor of Marketing at the A. Gary Anderson Graduate School of Management, 900 University Avenue, University of California, Riverside, Riverside, CA 92521; Ph 951-827-4999; Fax 951-827-3970; tom.novak@ucr.edu *The authors thank David Porter, an entrepreneur and the inventor of SmartBox, a patented storage device for the delivery and pickup of goods (U.S. Pat. #5,774,053), for permission to use the SmartBox descriptions in this research. 1 The “Right” Consumers for the Best Concepts: A Methodology for Identifying Emergent Consumers for New Product Development LONG ABSTRACT Consumer firms are generally interested in learning which consumers might be the "right" ones they might use to further develop product concepts and improve their chances for success in the marketplace. Which consumers are the most appropriate to engage in the product development process is important because while new product development is a major activity of firms (Chandy and Tellis 1998), most of the 25,000 products introduced in the United States each year fail (Goldenberg, Lehmann, and Mazursky 2001). While much research has emphasized improving current new product concept techniques (e.g. Dahan and Hauser 2002; Dahl and Moreau 2002; Green, Krieger, and Vavra 1997), except for the lead user approach (von Hippel 1986), little work has focused on which consumers to use in the new product development process, particularly in the consumer goods industry. We propose such a methodology to identify these “right” consumers. We argue that the right consumers possess what we call an “emergent nature,” i.e., the ability to process information in a synergistically experiential and rational thinking style, and exhibit a unique set of personality traits such that interactions among them in a new product development context will produce a product that mainstream consumers would find more appealing and useful relative to one that is developed by mainstream or even innovative consumers. We draw on information processing theory to develop the emergent nature construct and test our hypotheses in four studies. 2 A considerable body of research in dual-processing theory has differentiated among two types of information processing styles: experiential thinking style and rational thinking style (e.g. Epstein 1994; Pacini & Epstein 1999; Sloman 1996; Smith and DeCoster 2000) and substantiated the existence of individual differences in these two thinking styles (Epstein, Pancini, Denes-Raj, and Heier 1996; Pancini and Epstein 1999; Norris and Epstein 2003a, 2003b). Rational thinking style involves goal-directed, active, logical processing, and permits consumers to make optimal judgments about the utility of adopting a particular product innovation. Experiential thinking style, on the other hand, involves holistic, emotional, associative processing. Immediate experience is critical for experiential thinking, while logic and evidence are critical for rational thinking. The two thinking styles are not mutually exclusive processing styles; empirically they tend to have a very small positive correlation. Epstein and his colleagues have shown that these two processing styles reliably relate to a variety of psychological constructs (e.g. Pacini & Epstein 1999), with rational thinking style appearing to be adaptive for good judgment in specific decision-making situations, and an experiential style adaptive for interactions and creative pursuits. Novak and Hoffman (2007) suggest that some tasks “might demonstrate synergistic effects” in which both experiential and rational situation-specific thinking style might correlate positively with performance. We propose that consumers with an emergent nature are high in both experiential and rational thinking style and are able to use the two thinking styles in a synergistic manner. That is, we argue that emergent nature is defined largely by the complementary interaction between the experiential and rational thinking styles. We propose that emergent consumers, owing to the synergies among their thinking styles, are able to engage successfully in both idea generation to enhance the original concept and 3 logical analysis to refine and develop the concept further. In other words, emergent consumers are able to synergistically apply intuition and judgment to improve product concepts. Consumers with a high emergent nature develop an intuitive, almost “instinctive” understanding, i.e., visualizing the latent uses of a new product, through a sequence of small scale, affective, and associative perceptions. They are able to generate these ideas focused on the future because they possess a high degree of experiential processing ability. The experiential system generates the “gut feelings” underlying the intuitive understanding of the potential usefulness of a new product concept. Following this automatic, associative stage, emergent consumers, owing to their high degree of rational processing ability, then employ a rational thinking style in a conscious, logical and analytic effort to evaluate and refine the concept. In our conceptualization, the thinking styles work together in a complementary and iterative fashion, where a rational effort to analyze a product concept may activate further implicit, experiential associations about that concept, followed by another round of rational analysis, and so on. The essence of emergent nature is that consumers so possessed are able to inform their experiential impressions and associations with rational evaluation and judgment and vice versa. The results from Study 1, a comprehensive calibration and validation phase involving scale development and construct measurement, provide strong support for the idea that emergent nature is a useful construct in the product development context. We have developed a highly reliable and valid scale to measure emergent nature in consumers and showed that the emergent nature construct is empirically distinct from other product development constructs such as lead user status, as well as dispositional innovativeness (Steenkamp and Gielens 2003). In study 2, five mutually exclusive groups of consumers, including those high on emergent nature, lead user status, and dispositional innovativeness, develop a new product 4 concept using an online bulletin board methodology, and in studies 3 and 4, those concepts are market tested demonstrating that consumers high on emergent nature can develop product concepts that are perceived by typical consumers as significantly better than concepts developed by groups high on domain-specific lead user status or dispositional innovativeness. The strong showing of the concept developed by the high lead user group reinforces research that argues that lead users represent a good segment for developing radical new product concepts (von Hippel 1986). It also provides strong face validity to our results. We also note that we have developed a highly reliable and valid scale to measure domain-specific lead user status in a consumer context and marketing researchers may also find value in this scale. 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