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

Companies are increasingly drawing on their user communities to generate promising ideas for new products, which are then marketed as "user-designed" products to the broader consumer market. We demonstrate that nonparticipating, observing consumers prefer to buy from user-rather than designer-driven firms because of an enhanced identification with the firm that has adopted this user-driven philosophy. Three experimental studies validate a newly proposed social identification account underlying this effect. Because consumers are also users, their social identities connect to the user-designers, and they feel empowerment by vicariously being involved in the design process. This formed connection leads to preference for the firm's products. Importantly, this social identification account also effectively predicts when the effect does not materialize. First, we find that if consumers feel dissimilar to participating users, the effects are attenuated. We demonstrate that this happens when the community differs from consumers along important demographics i.e., gender or when consumers are nonexperts in the focal domain i.e., they feel that they do not belong to the social group of participating users. Second, the effects are attenuated if the user-driven firm is only selectively rather than fully open to participation from all users observing consumers do not feel socially included. These findings advance the emerging theory on user involvement and offer practical implications for firms interested in pursuing a user-driven philosophy. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.1999 . This paper was accepted by Pradeep Chintagunta, marketing.