This article describes the key principles of creating partnerships with professional consumers–prosumers, identifies the problems of applying prosumerism in the practice of marketing partnerships, and provides the main directions for future research to substantiate the technology of creating prosumers and the system of relationships with them.
The realities of dynamically changing markets lead to the fact that economic entities of the markets are increasingly beginning to realize the possibility of increase in profits and market share. Ultimately, to create and enhance the company’s shareholder value not through an aggressive promotion package aimed at consumers of economic goods, but by creating partnerships with them: long-term trust relations on the terms of mutually beneficial exchange of values. In the concept of partnership marketing, all subjects of the marketing environment are considered as partners: consumers, competitors, suppliers, intermediaries, and contact audiences. In this article, we will focus on the basic principles of building partnerships with the end-user – the main economic entity for which the company carries out production and economic activities.
Characteristics of prosumerism
One of the mechanisms for creating long-term relationships of trust with end-users-partners is the use of the phenomenon of prosumerism in the marketing of partnerships. Prosumerism is a socio-economic phenomenon that means the emergence of communities that are both producers of goods/services and consumers. Prosumerism is the participation of consumers, sometimes for quite a long time, in the processes of improvement, and sometimes in the development of an innovative product at the early stages of its development and production processes. Prosumerism can also be considered as the result of the transformation of the industrial economy into a digital economy, «moving part of production from the sector of exchange of labor products to the sector of «production for oneself» (Plotichkina 2013, 67).
According to Toffler’s concept, which he presented in the book ”the Third wave ” in 1980, the prosumer is both a producer and a consumer (Toffler 1980.) Prosumers are characterized by Do It Yourself (DIY) activities based on manual work and the use of electronic and household appliances in order to improve and modernize the economic benefits consumed. The new cybernetic reality of Web 2.0, described by Amy Shuen in 2008 in What Is Web 2.0, created a new type of prosumers who tend to engage in mental activity and use new information technologies to solve some problems related, for example, to improving the projects and services created in the network (Shuen 2008).
The forms of Toffler`s prosumerism, characterized by self-service, DIY activity, product customization, and viral marketing, are replaced in the era of Web 2.0 by active interaction between a company and its consumers. Their involvement in the processes of designing, improving the product, and testing is based on cooperation with network media: social networks, forums, and communities. (Plotchina 2013.)
Researchers H. Hanekop, A. Tash, F. Wittke, M. Wolf, S. Mcquitty, and E. von Hippel describe professional consumers as users in the network who have a high potential in developing and implementing ideas for creating an innovative product. As a rule, these are consumers loyal to brands, innovators, so-called brand communities, ”autoremesleniki”, computer scientists (Hanekop, Tasch & Wittke 2001; Izvercianu 2012; Klen 2009; Rayna & Striukova 2016; Wolf & McQuitty 2011). Euro RSCG Worldwide’s international system research, which has been conducted since 2003 to study a new type of consumer – the prosumer- allows us to characterize it as an authoritative innovator, able to experiment, actively communicate with his own kind. It is also somewhat skeptical of information in the media and trying to recheck it, as well as a self-sufficient person who lives in the present and is involved in popular culture. (Advertising Industries 2006.) Unlike opinion-leaders, prosumers are more interested in innovation and are more sociable.
It should be noted that the concept of ”prosumerism” is not identical to the concepts of ”customization”, ”consumer centralization”, which means that consumers adjust the properties, functions and characteristics of an almost ready-made product to themselves, or modify individual elements of the product based on its basic parameters.
Marketing of partnership relations
Marketing of partnership relations (MPOs) with the consumer prosumer is implemented on the basis of the key principles of MPOs. The principle of creating new value with the distribution of benefits between the manufacturer and the consumer is implemented on the basis of methods of attracting professional consumers to the process of product development or modernization, adjusting the set parameters, and providing feedback to the consumer during the project process. The mutual benefit of working with prosumers is obvious for both the manufacturer and consumers-prosumers, providing that the company offers opportunities for prosumers to improve the product during its life cycle. (Zvereva 2012; Kirillova 2012; Rybalkina 2011.)
Consumers-prosumers with whom companies cooperate create competitive advantages of the product and the company, as well as, implement and even promote new properties of the products. The analysis of results derived from the international research by Euro RSCG Worldwide showed that prosumers have a closer relationship with other consumers, acting on their consciousness as a “social media” and having an impact that is 4-6 times stronger than that of the average consumers. Thus, prosumer becomes a voluntary helper in conquering of the market, bringing commercial ideas to the target audience of the company, therefore increasing the share of voice of the consumer. (Advertising Industries 2006.)
On the other hand, prosumers meet their own psycho-social needs of the highest order – these are the needs of involvement, recognition by the virtual community of prosumers, company representatives, the need for self-actualization and demand for their knowledge, skills and abilities, the manifestation of individuality and empowerment.
In the process of development of innovative products for the company and in buying improved or developed by them products prosumers receive high added values in form of social, emotional, cognitive values. By creating their brainchild, an innovative product, such consumers most likely will remain committed and loyal to the company, since involvement in the process of improvement and development of the product a priori implies a long and trusting relationship between two parties.
The principle of partnership marketing implies the allocation of customer-partners in a privileged category and the adoption of joint strategic and tactical decisions. This can be embodied in the application of high-tech systems of marketing management and support, based on quality data obtained from social network, forums and blogs. Close interaction between prosumers and company marketing can cause certain problems. Not all the innovations introduced by prosumers can meet the emission and vision of the company and its development strategy. Again, it may be unclear for a company how to protect their intellectual property on innovations that offered by consumers, how the system of rewards for innovations would be defined, and so forth.
Prosumer interaction and innovations
In marketing practice there are a large number of examples where companies are able to benefit from the innovative potential of consumer-prosumers. In the digital economy, prosumerism manifests itself in open source software, in creation of a universal Internet encyclopedia with free content – Wikipedia, content processing and creative collaboration: Flickr, ccMixter, You Tube, Instagram (Plotichkina 2013).
In the real sector of the economy, prosumerism can be used by companies that operate on the markets of a wide variety of items of purchase and sale: from umbrellas and shoes to cars. For example, consumers of John Fluvogh’s high-end shoes offer their design for shoes “open source” and the best of those are launched into production, which is rewarded by assigning name of the designer on the pair of shoes with a unique design. (Tapscott & Williams 2010.) Companies that specialize on the development of smart devices (for example, an umbrella that can predict the weather), often launch projects even at the stage of conceptual development, when user can easily offer them their ideas.
Lego uses Mindslorms.lego.com to encourage work with its own software. The website offers free downloadable program, and consumers respond by using it to post descriptions of their designs: program code, instructions, and Lego parts needed for specific devices. Despite the large amount of highly qualified researchers and developers engaged in the production of software for cars in Silicon Valley, BMW on its website involved its consumers in the process of improving the car. Thousands of users have submitted ideas to the engineers, many of which have since become valuable innovations. (Tapscott & Williams 2010.)
However, the rigidity of organizational structures in companies, the static nature of production processes, the lack of marketing mobility does not allow modern companies to fully use in the practice of creating partnerships such a non-standard phenomenon as prosumerism. Prosumerism can also pose a threat to a company, which can be manifested by the loss of control over the innovation processes related to its own product, since the prosumers community can create an innovative product on a platform without the knowledge of the company. The development and release of a competitive product will create new opportunities for competitors, resulting the loss of both loyal customer-prosumers and the company’s position in the competitive market. A company that is open to innovations from prosumers, that provides the conditions for creativity and innovation implementation, and the company that finds opportunities to reward the innovative efforts of consumers will be able to build a system of long-term trust relationships with consumers.
Since the very idea of long-term mutually beneficial cooperation with prosumers is relatively new in theory and practice for Russian marketing, there are practically no studies to date that would show how much interaction with prosumers would allow to ensure mutually beneficial exchange of values between both parties. An empirical confirmation of the relationship between the variables ”cooperation with the prosumers” and ”efficiency of partnership marketing” will allow the marketing of companies to develop a technology of creating systems for relations with prosumers (Timokhina & Kulikova 2015). The main tasks in developing such a technology may be the following:
- Study of the degree of consumer involvement in the target segment of the company in the process of collecting, processing and analyzing product information.
- Evaluation of the potential consumer community capacity.
- Study of the innovative potential of consumers-prosumers.
- Identifying effective channels of communication with the community of producers.
- Determining the mechanism of building relationships with the community of consumer-prosumers in the framework of partnership marketing.
- Determine a system of remuneration for the creation of innovative products.
- Study of ways to protect the intellectual property of consumers-prosumers.
- Study and development of methods to assess the effectiveness of marketing companies with requests from the perspective of mutual benefit in the process of values exchange. (Timokhina & Kulikova 2015.)
All together, the application of the phenomenon of prosumerism in the marketing of partnership relations implies the construction of a system of long, trusting relations with the consumer. The relations are based on the interaction to improve or create a new product, which makes such a system of relations mutually beneficial. In the conditions of globalization, when companies have to work with consumers from different countries / cultures, when working out the methodological issues of building long-term trust relationships with drillers-prosumers should consider cross-cultural variations in consumer behavior from different countries / cultures (Shuen 2008).
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