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Week Authors Name of Article
1 John T. Gourville Eager Sellers, Stoney Buyers : Understanding the Psychology of
New Product Adoption
1 Robert B. Woodruff Customer Value : The Next Source for Competitive Advantage
2 Peter C. Verhoef & Understanding the Marketing Department’s Influence Within
Peter S.H. Leeflang the firm
2 Christian Homburg, Marketing Excellence : Nature, Measurement, and Investor
Marcus Theel, Valuations.
Sebastian Hohenberg
3 Luigi M. De Luca & Market Knowledge Dimensions and Cross-Functional
Kwaku Atuahene- Collaboration : Examining the Different Routes to Product
Gima Innovation Performance
3 Holger Ernst, Wayne Sales, Marketing, and Research-and-Development
D. Hoyer, Carsten Cooperation Across New Product Development Stages :
Rübsaamen Implications for success
4 Mary Tripsas & Capabilities, Cognitions, and Inertia : Evidence from Digital
Giovanni Gavetti Imaging
4 Rosa, J. A., & Spanjol, Markets as Dynamic Socio-Cognitions
J.
5 Joep W.C. Arts, Ruud Generalizations on consumer innovation adoption : A meta-
T. Frambach, Tammo analysis on drivers of intention and behavior
H.A. Bijmolt
8 Yikuan Lee & Gina New Product Launch Strategy for Network Effects Products
Colarelli O’Connor
9 Kristof De Wulf, Gaby Investments in Consumer Relationships : A Cross Country and
Odekerken-Schröder, Cross-Industry Exploration
Dawn Lacobucci
9 Ian Clark S . The interplay of innovation, brand, and marketing mix
Sinapuelas, Hui-Ming variables in line extensions.
Deanna Wang,
Jonathan D.
Bohlmann
10 Roland T. Rust, Return on Marketing : Using Customer Equity to Focus
Katherine N. Lemon, Marketing Strategy
Valarie A. Zeithaml
10 Sunil Gupta & Valerie Customer Metrics and Their Impact on Financial Performance
Zeithaml
11 Harri Terho, Andreas Selling Value in Business Markets : Individual and
Eggert, Wolfgang Organizational Factors for Turning the Idea into Action
Ulaga, Alexander
Haas, Eva Böhm
1
,Article : Eager Sellers, Stoney Buyers : Understanding the Psychology of New-Product Adoption
Author : John T. Gourville
Topic : New-Product Adoption
Year : 2006
Objective of Article : Understanding the Psychology of New-Product Adoption
Summary :
Both parties of a trade (consumers and sellers) have psychological biases which can result in new
products not being adopted at the rate sellers expect.
At the sellers side, there is a psychological bias which is best described as the tendency to overvalue
the benefits of their innovation. They overvalue the benefits of their innovation with a factor of
three. When anticipating other judgements people find it impossible to ignore what themselves
already know or believe to be true. This phenomenon is called the curse of knowledge. In other
words , developers expect consumers to see the same value in their innovations that they see.
At the consumers side, there is a psychological bias which is best described as the tendency to
overvalue the benefits they currently have relative to those they do not. Consumers evaluate the
attractiveness of an alternative based on its subjective or perceived value. After this they evaluate it
with a reference point which is usually a product they already own. Improvements relative to this
reference are gains and all shortcomings are losses in the mind of consumers. The losses however
have a far greater impact on people than similarly sized gains. This phenomenon is called loss
aversion. This loss aversion lead people to value products they possess more than those they don’t
(endowment effect). Consumer overvalue losses by a factor of three (therefore it is not enough for a
new product to simply be better).
In order for companies to enlarge the probability for adoption behavior a company must minimize
behavior changes in customers (behavior changes can be seen as losses). Other strategies for
companies to manage consumer resistance are 1.) Being patient and brace for slow adoption 2.)
Strive for 10 times improvement to overcome the 9x effect (3x3). 3.) Eliminate the old which takes
away the losses in terms of behavior change. Strategies for companies to minimize consumer
resistance are 1.)Make behaviorally compatible products 2.) Find believers.
2
,Conclusion :
Companies often overvalue their innovations and consumer overvalue the benefits they currently
have. Due to these psychological biases , there is a gap in adoption probability called the 9x effects. In
order to successfully diffuse an innovation, the innovation should have 10x the relative advantage of
the alternatives and require minimal behavior change of a consumer.
Article : Customer Value : The next Source for Competitive Advantage
Author : Robert B. Woodruff
Topic : Customer Value
Year : 1997
Objective of Article : Understanding Customer Value and its source as competitive advantage
Summary :
The article is about the strong need for companies to focus on Customer Value and aligning internal
processes in order to create this value. Customer value is a broad concept and is linked through the
use of a product and something perceived by a customer rather than objectively determined by a
seller. The customer value hierarchy model suggest that there is a hierarchy of desired value in a
means-ends way. Customers learn to think about products as bundles of attributes and its
performances, when purchasing they form desires or preferences for certain attributes and their
ability to achieve desired consequences which are in line with the customer’s goals and purposes.
3
, The customer value hierarchy model suggest that managers should look beyond attribute
performances and learn about its consequences and how well it fit with the goals of the customer.
The use situation of the product is a critical determinant of the preferred consequences , in other
words when the use situation changes, the linkages between attributes, consequences and goals
change as well.
Customer value is related with customer satisfaction , desired and received value fit into a
disconfirmation type satisfaction model. When triggered to make an evaluation , customers
constructs some notion of what value they desire by past and present experiences. Desired value
guides customer when they form perceptions of how well a product has performed in a actual use
situation.
In order to fill the gap between what manager think their customers value and what customer say
they value , managers should conduct customer learning by organizations. CSM (customer satisfaction
measurement) is a process for learning about customer value but lacks in -depth understanding of
specific use consequences. CVD (Customer Value Determination) is more appropriate, which
identifies target customers and seeks out the complete picture of customers entire desired value
hierarchy, qualitative interview is needed to reveal the links between attributes, consequences, and
the goals or values. By using a survey CVD measures the customer satisfaction at the consequence
level rather than attribute level and follows up on the results to explore why Customer Satisfaction is
bad among customers with in depth qualitative interviews. CVD should incorporate CVOMIS
(Customer Value-Oriented Marketing Information System) in order to fill in the lack of understanding
that comes from only using formal consumer research. The shift from CSM to CVD should help
companies to not only think about attribute level of the customer value hierarchy but rather at the
consequence level. In addition CVD also helps the company to track whether their target customers
think that value received is getting better or not.
CVOMIS helps managers learn about customer-determined performance outcomes of customer value
delivery and causes of that performance. The system should provide insights into customers current
preferences as well as long-terms patterns of change in order to keep up with the external
environment.
In order to gain advantage of Customer Value Learning, learning should shape managers mental
models of their customers, and take action to achieve customer value delivery. In order to come up
with an appropriate strategy management should take the in use situations into account and the
benefit consequences which are use-situation specific. In addition a firm must align customer value
with the internal processes, one frequently used tool is the QFD (quality-function-deployment).
There are several organizational barriers that can delay the integration of CVD, for instance
organizational culture barriers, organizational procedural barriers by inertia, and managerial learning
barriers as some managers may be to committed to the way they do things.
Conclusion :
Firms should focus more on customer value as a
competitive advantage where it is important that
value is highly dependent upon the in-use situation
and the different consequences that are a results
from the product attributes. In order to successfully
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