Marketing Professor Studies the Impact of Crowd Sourcing on Supply Chain Intermediaries

 

Every year consumers generate more than billions of online impressions. These online consumer reviews have become a key source of information for other consumers as well as organizations who harness the positive energy of consumer contributions to the firm. This mechanism broadly referred to as crowdsourcing is used by businesses ranging from Reebok, Adidas, Ralph Lauren, Starbucks, Toyota, BMW and Dell among others.  Crowdsourcing often provides consumers the platform to design merchandise and services. Dr. Gary Hunter, Marketing Professor at the College of Business, in his recent study looks at the indirect economic and relational benefits and costs of customer value creation on channel intermediaries (i.e. distributors, retailers) in an online world.

Dr. Hunter along with his co-authors find that when manufacturers utilize consumer contributions through crowd sourcing, affiliated intermediaries will find themselves in a less desirable situation within their value chain as there is direct collaboration between manufacturers and customers. They point out that intermediaries will have less informational power and thereby offer lesser value to manufacturers. They argue that channel intermediaries need to recognize this change in power and position themselves within the manufacturer’s value chain to enhance their future prospects of this relationship. In particular, they call for intermediaries to heightened efforts to create channel value by enhancing reputation and creating newer benefit-based outcomes, compared to traditional options.

This work entitled, ‘ Consumer Co-Creation and the Impact on Intermediaries,’ is forthcoming in the  Journal of Physical Distribution & Logistics Management .