Article Comments: “Why and When Consumers Prefer Products of User-Driven Firms: A Social Identification Account”

Darren W. Dahl, Christoph Fuchs, Martin Schreier. 2015. “Why and When Consumers Prefer Products of User-Driven Firms: A Social Identification Account”. Management Science 61(8):1978-1988.

User-generated products create greater value for companies, not just through creating better products, but by adding to the brands’ intangible value – consumers associate more positively with user-designed products through a kind of “vicarious identification” (2015: 1978) with the user-designers. However, the process also works in reverse if users feel too dissimilar to the social group of participating users.

Dahl et al. were concerned here with extending the literature that provides us with a deeper understanding of the motivations of consumers to become involved in user design in some capacity. This is done primarily by addressing when and why consumer perceptions of user-driven firms might change the relationship consumers develop with the firm (i.e. the firm’s market philosophy -> consumer/user identification with the firm -> product preference, controlling for product attribute perceptions). In other words, how can a firm’s market philosophy (user-driven versus design-driven) influence how a consumer identifies with an institution and how does this identification change consumer preferences in the market (2015: 1979).

The studies articulated here draw on social identity theory developed by Turner (Turner 1986), which can loosely be defined as “the shared categorical self”; social categorizations of self and others that define the individual in terms of his or her shared similarities with other members of certain social categories in contrast with other categories. Social identity theory broadly argues that our identity is not only formed on the basis of our own values and achievements but also on the basis of those of relevant others: people with whom we identify (Cialdini et al. 1976).

Importantly, any accomplishments by these relevant “others” might affect the perception of our own identity. If a female is awarded the Nobel Prize, for example, other females can be observed to activate their female self-identity, which in turn makes them feel flattered by the prize—in a way, a relevant other’s achievement becomes their own achievement (Cialdini et al. 1976). We see this all the time, particularly with respect to national sporting competitions like the Olympic Games, whereby the success of an entire nation can be based on the performance of a handful of single individuals who stand to represent it. By the same logic, therefore Dahl et al. hypothesized that a firm’s market philosophy triggers an important identity-relevant attribution in a consumer; consumers are empowered by like-minded others, form a stronger identification with the firm itself (2015: 1980).

Dahl et al. set out to accomplish three major projects with their work here:

  • To disentangle the effect of identification from the effects of products (i.e. effects created by objective differences in the products themselves)
  • To provide insight as to why consumers can identify more strongly with user-driven firms
  • To enable the prediction of when effects of social identification are likely to be less pronounced.

Across three studies, Dahl et al. came to a number of interesting conclusions.

  • An analysis of variance (ANOVA) with product preference as the dependent variable and the firm philosophy factor as the independent variable shows that if a firm is described as a user-driven firm, respondents demonstrate a significantly stronger preference for the firm’s products than if that firm is described as a designer-driven firm.
    • If the respondents can imagine the consumer base of the firm and fell themselves to be similar to that imagined group, their preference for that firm is even stronger. Similarly, if the respondents are told what demographic make-up constitutes the firm’s consumer community (e.g. that it is 95% male or female), and feel similar to that group, those respondents also report stronger preference for that firm.
  • An ANOVA on perceived empowerment reveals a significant effect of the firm’s philosophy factor: if a firm was described as a user-driven firm, respondents felt psychologically more empowered than if that firm was described as a designer-driven firm.
  • If a user-driven firm is reported to respondents as being “selectively open” rather than “completely open” – that is it only allows select individuals from its consumer base to contribute to designing its products rather than allowing any person from within or out of its consumer base to contribute to designing its products, then the effect of user identification is negatively affected. In other words, respondents self-report higher preference for user-driven firms that are completely open than those that are selectively open.

Conclusions:

Dahl et al. make a compelling argument, and I’d only remark on the fact that the groups with which users feel they identify with don’t have to be based on demographics, however it’s much harder to test for. In 1983, anthropologist Benedict Anderson wrote about the phenomenon of the “imagined community”, which he used to describe nationalism. Today, the theory has been used to talk about a number of communities which have emerged in the name of some shared ideal, attribute, or sense of belonging, whether those attributes exist in actuality. We can apply the theory to a discussion of car buyers, for example – there need not be an archetypal rural truck driver, there need only be the attributes a consumer associates with one in order to induce in that consumer a sense of “I am one of those”.

Nonparticipating, “observing” consumers generally prefer to buy from user- rather than designer-driven firms because of an increased social identification with that firm. Dahl et al. demonstrated that a firm sees “a significant and often substantial increase in preference if the firm is portrayed as pursuing a user- versus designer-driven market philosophy” (2015: 1987). Companies should be increasingly drawn towards incorporating user-design philosophies into their work, not only because the products will better suit the needs of their consumers, but because on a fundamental level, users feel empowered by firms they believe care about their needs.

Works Cited

Anderson, B. 1991. Imagined Communities: Reflections on the Origin and Spread of Nationalism. Verso. New York, USA.

Cialdini RB, Borden RJ, Thorne A, Walker MR, Freeman S, Sloan LR. 1976. “Basking in reflected glory: Three (football) studies”. J. Perspect. Soc. Psych. 34(3):366–375.

Darren W. Dahl, Christoph Fuchs, Martin Schreier. 2015. “Why and When Consumers Prefer Products of User-Driven Firms: A Social Identification Account”. Management Science 61(8):1978-1988.

Tajfel H, Turner JC. 1986. “The social identity theory of intergroup behavior”. Worchel S, Austin WG, eds. Psychology of Intergroup Relations (Nelson-Hall, Chicago), 7–24.

 


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