NEW PRODUCT DEVELOPMENT WITH FACEBOOK FANS: IDEA CONTEST EXPERIMENT - Department of Operations Management, School of Business, Yonsei University Ayaka Oda 12/10/2012 (VERY SHORT VERSION OF MY MASTERS THESIS)

Introduction Users are important sources of innovation (von Hippel, 1988; Nambisan, 2002). Role of the Internet Crowdsourcing: The act of taking a job traditionally performed by a designed agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call (Howe, 2006). Ideas contests appear to be a promising tool for crowdsourcing and open innovation activities (Leimeister et al., 2009; Bullinger et al., 2010; Fuller et al., 2011). Seeker Companies Potential Solvers

Why Facebook? Facebook Fan Page Ayaka Oda liked Godiva Chocolatier. Friends News Feed Extending user research is relatively easier on Facebook fan page than firm-based virtual community.

Research Purposes 1. To introduce how to design an idea contest on Facebook fan page. 2. To find out what motivates users to participate in the idea contest on Facebook fan page and to investigate the effect of participation on resulting marketing implications. Idea Contest Facebook

Design of Facebook Idea Contest Stage 1 Obtain user awareness for the Facebook fan page through the Like button. Stage 2 Conduct idea contest with the fans to generate new product ideas. Stage 3 Have fans to provide feedbacks to other users contributions. Stage 4 Evaluate the ideas submitted by the users to select the best idea. Stage 5 Market the new product generated through the contest on Facebook fan page.

Hypothesized Model Idea Contest Contribution Networking Self Presentation Word of Mouth Willingness to Purchase MOTIVATIONS Monetary Rewards Enjoyment Learning Customer-Brand Relationship INTENTIONS H1 H2 H3 H4 H5 H6 H7 Motivation for networking is positively associated with the fans contribution to the idea contest.

Research Setting - Boramsam ( ) Registered as (Yonsei University Boramsam Idea Contest) on September 3, 2012 ( An with the link was sent to approximately 23,000 undergraduate and graduate students. Students were asked to come up with their new product ideas for Boramsam and refine others submissions. The idea contest was held for 43 days, and feedbacks and improvements to the submitted ideas were accepted for two more days after the deadline for the new product ideas. Boramsam ( ) One of the stores that Yonsei University Co-op Goods manages. Located on the 1 st floor of the Student Union Building ( ). Sells goods with Yonsei University logos, such as T-shirts and mug cups.

Data Collection and Analysis Data Collection Content Data of Facebook Fan Page Online Survey An online survey was conducted using Survey Monkey. 5-point Likert scale from strongly disagree to strongly agree. Prepared in Both English and Korean Data Analysis SPSS 18.0 (Exploratory Factor Analysis) SmartPLS 2.0 (Confirmatory Factor Analysis + Testing the Hypothesized Model)

Key Figures of the Idea Contest Idea Contest Characteristic Specification Duration9/3/ /17/2012 Number of Total Fans*137 (3 organizers + 69 active fans) Idea Presenters58 (57 fans + 1 non-fan) Number of Total Ideas**103 Number of Fans who Liked49 Number of Total Likes231 Number of Fans who Commented38 Number of Total Comments 185 *There were 9 dislikes. ** One idea was deleted by the idea submitter.

Categorization of Idea Contest Participants Competitive Fan (27) Coopetitive Fan (30) Observer (63) Cooperative Fan (12) Low CooperationHigh Cooperation High Competition Low Competition User who submitted idea and helped other ideas to improve. Uses who only liked or commented on other users idea. User who submitted idea and/or only commented on own idea. User who liked our fan page but did not engage in any action. (Reference: Hutter et al., 2011)

Survey Respondent Profile (N=101) Characteristics# (%) Characteristics# (%) GenderFacebook Use Intensity Per Day Male54 (53.5) Less than 10 min6 (5.9) Female47 (46.5) min22 (21.8) Nationality min34 (33.7) Korean75 (74.3) 1-2 hours20 (19.8) Others26 (25.7) 2-3 hours5 (5.0) Age More than 3 hours14 (13.9) (7.9)Boramsam Familiarity (59.4) Yes80 (79.2) (27.7) No21 (20.8) (3.0)Fan Page Visit Frequency 35 or above2 (2.0) Once a month20 (19.8) Occupation Twice a month24 (23.8) Undergraduate Student74 (73.3) Once a week37 (36.6) Graduate Student13 (12.9) Twice a week18 (17.8) Exchange Student9 (9.0) Every day2 (2.0) MBA Student1 (1.0) Employed4 (4.0) Rough Mean: 345 Friends

Measurement – Idea Contest Contribution In the idea contests held online, people not only compete for the rewards but also seem to collaborate with each other by providing feedbacks. ActivityValue Liking the Fan Page1 Liking Own Idea2 Commenting on Own Idea3 Liking Other's Idea4 Commenting on Other's Idea5 Making Qualitative Comment on Other's Idea6 Submitting Idea7 User IDUser TypeLike (Own) Comment (Own) Like (Other) Comment (Other) Qualitative Comment Idea Total Contribution Score 71Coopetitive Fan Competitive Fan Cooperative Fan Competitive Fan18 75Observer1 Assigned Value (1-28) (Reference: Hutter et al. 2011)

Results of the Hypothesized Model (***p < 0.01, **p<0.05, *p<0.1)

Post-Hoc Analysis: ANOVA User Type (N) Networking Self Presentation Enjoyment Learning Monetary Rewards MeanSD MeanSD MeanSD MeanSD MeanSD Observer (36)3.47 a a a Cooperator (10)3.28 a,b a,b b Competitor (25)2.85 b a,b b Coopetitor (30) 3.11 b b b F-Value10.334***6.831*** *** Notes) ***p < Post-Hoc Scheffé Test: Subscribts a,b show the result of significant test. (p < 0.05) Number of Items (N): Networking (5), Self Presentation (4), Enjoyment (4), Learning (3), Monetary Rewards (4)

Comparison of Group Means: Scheffe Test Interestingly, observers had the highest motivation for networking.

P.S. If you happen to be interested in listening to the whole version of this PPT, please feel free to come to on 12/21(Fri) at 10am.