Written by Leonie Wolf
Today, the need for innovation is an integral part for companies in all industries. Developing innovative ideas and implementing them in everyday practice is seen as a core competency for long-term market positioning and economic growth (Fagerberg, 2005).
However, there is a gap between striving for innovation and its implementation in practice. Many companies are struggling with the development and implementation of new products or services. They do not have the capacities or business structure, the money or the ideas (Kumar, Scheer & Kotler, 2000). Thus, companies are increasingly including customers into their innovation process and, therefore, use them as partner for generating innovation to satisfy the consumers’ needs – a trend which is also known as crowdsourcing and has been grown more and more in the recent years (Djelassi & Decoopman, 2013).
There are several successful examples of crowdsourcing and including customers into the innovation process in all industries. However, this paper focuses on the food industry. With the increasing supply of private labels and the internet as transparent marketplace, food brands and companies are more and more exposed to competition (Anselmsson & Johansson, 2014). Today, food brands have to be innovative in order to be competitive (Abril & Martos-Partal, 2013).
In the light of the above, the paper aims to investigate the following question, using McDonald’s crowdsourcing contest ‘My Burger’ as successful example:
How can food brands use crowdsourcing for product innovation?
From Closed to Open Innovation
For many years, the closed innovation model was the right model. Companies innovated within their boundaries and brought new ideas and products to the market (Chesbrough, 2003). It was a successful way, but it also was another era. In the end of the last century there was an increasing knowledge exchange, which made it difficult for companies to keep their ideas to themselves. As a consequence, many businesses started to open up their boundaries for ideas outside their own company (Chesbrough, 2003). External innovations are marketed in-house; internal ideas are developed apart from the current business. The underlining shift from closed to open innovation has become a central platform for exchanging knowledge and generating further innovation (Chesbrough, 2003).
Especially with the rise of the internet and social media, the open innovation concept can be seen in a different perspective. The new technology enables companies to collaborate easier with external stakeholders; it enables them to collaborate with their customers (Djelassi & Decoopman, 2013). In other words: Companies can use customers as partners and involve them into their innovation process – they are “co-creators of value” (Djelassi & Decoopman, 2013, p. 683).
One form of open innovation and a quite young phenomenon is crowdsourcing – a term that is composed of the two words ‘crowd’ and ‘outsourcing’ (Djelassi & Decoopman, 2013). Crowdsourcing was first mentioned by Howe in 2006 who described it later as “the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call” (Howe, n.d.). Therefore, crowdsourcing is an effective concept for a company to benefit from insights and the knowledge of its customers. The input of the crowd and integrating them into the innovation process gives businesses the chance to develop new ideas and products (Djelassi & Decoopman, 2013). What could be better for a company than a new idea that is (co-) innovated and approved by a huge crowd of customers?
Crowdsourcing in Practice
How do brands use crowdsourcing in practice? There are many example, from Levis’s to Nissan (Moth, 2013). However, regarding to the food sector, this article takes a look at one of the most successful crowdsourcing campaigns of food brands worldwide.
McDonald’s Crowdsourcing Campaign ‘My Burger’
Let’s have a look at the world’s famous fast food chain. In 2011, McDonald’s introduced its first crowdsourcing campaign in Germany. True to the motto ‘My burger’, the customers were invited to create their own individual burger. Online they chose between different ingredients and condiments and labeled their burger. Then, every burger was available for public voting and in the end the crowd’s burgers with most clicks were sold in the restaurants (Razorfish, 2015; VivaKi, 2012).
The success of this crowdsourcing campaign was driven by the social media. McDonald’s provided every participant with tools to share their burger online, create offline flyer or make an own commercial. In order to win this challenge, the burger innovators were promoting their burger and hence McDonald’s itself. The created buzz of this crowdsourcing concept and the participation of the crowd made this project to the most successful campaign by then. With 7 Million page impressions on their website and 116.000 burger creations within five weeks, ‘My Burger’ is a prime example how to elaborate a fruitful crowdsourcing campaign that brings additional customers and sales as well as new innovations (Razorfish, 2015; VivaKi, 2012).
Crowdsourcing Campaigns benefit Brands
The crowdsourcing project shows how a food company can integrate consumer engagement into their innovation process. Successful crowdsourcing campaigns will benefit businesses and its brands:
Crowdsourcing contests are perfect for getting customers engaged with a brand (Hoffman & Fodor, 2010). Successful crowdsourcing campaigns are even better. A good project is able to gain high consumer engagement as well as commitment. It is able to strengthen the brand loyalty and identification as well as get customers more likely involved with the brand in the future (Hoffman & Fodor, 2010).
45.000 burger creations in the first seven days and 116.000 after five weeks (Razorfish, 2015) – The high participation in McDonald’s crowdsourcing contest shows that consumers are open to new ideas and are willing to engage. This positive and high response rate makes a dream of every brand manager come true.
Marketing for free
McDonald’s crowdsourcing demonstrates that a good campaign is able to gain high consumer engagement. Besides more than 100.000 clicks on the website, McDonald’s got promotion for free. Around 12.000 customers created their own marketing campaign and were sharing, promoting and talking about their own creation – and therefore the brand McDonald’s. Over all, this crowdsourcing campaign has reached every fourth German user online. Additionally, the press was talking about the project and so McDonald’s has gained attention offline (Razorfish, 2015).
The viral success of this crowdsourcing campaign is also based on the word of mouth that the project has triggered. The good thing with word of mouth marketing is, once customers are favorable towards a brand and/or project, they start communicating about it to other costumers. “Satisfied and loyal consumers communicate their positive attitudes toward the brand itself […] to new, prospective customers both online and offline” (Hoffman & Fodor, 2010, p. 46). It is personal and trustworthy marketing for free and isn’t this the best way of promotion?
The crowdsourcing case of McDonald’s shows: Although internal innovation costs went down, the company got a lot of new input, ideas and inspiration (VivaKi, 2012). All the submitted creations give insights in the preferences of the customers regarding the ingredients. Furthermore, it is a collection of new products for free. A company can use this innovation input in order to create new products and thus make itself more valuable for its customers.
As mentioned above, innovations are essential for companies to gain long-term growth (Fagerberg, 2005). Collaborating with consumers in an open innovation project benefits brands as they can make use of the knowledge, ideas and insights of their participants. Furthermore, identification of the crowd with the brand and the product, effects higher value in the innovations (Min Antorini, Muniz & Askildsen, 2012).
The Challenges of Crowdsourcing?
It is one thing to start a crowdsourcing contest, it is another to do it successfully. Although brands can benefit in several ways, there are, of course, challenges.
The most important aspect in open innovation with customers is to motivate them to participate. Having a good contest design as well as alluring the crowd with motivation factors is an important aspect when carrying out a crowdsourcing campaign. Primarily intrinsic motivation has a strong impact in the engagement of consumers. It is twice as high as extrinsic motivation (Zheng, Li & Hou, 2011). Therefore, it is challenging for the brand to create a contest that motivates the crowd. If extrinsic motivations like a cash prize is not the main reason, companies have to be creative in order to address the intrinsic motivation. The contest should be fun and challenging – a special, creative project that motivates customers to participate (Parvanta, Roth & Keller, 2013).
Another challenge is the definition of the crowdsourcing problem. What is the aim for the company with such a contest? Generating innovative ideas of its customers is a wide task, so it is important to generalize the problem. The task should avoid company specific terms and details. It is important that the customers can easily understand what to do. If customers can identify with the contest, they are more motivated to participate (Boudreau & Lakhani, 2013).
How can Food Brands use Crowdsourcing for Product Innovation?
This article is supposed to answer the question of how food brands can use crowdsourcing for product innovation. After investigating the theoretical framework and examining McDonald’s example of successful open innovation, the question can be answered:
- Food brands need a creative idea: The crowd needs to be convinced in order to participate and get innovative.
- They need a well-defined task. The crowd should easy understand what to do and how to participate.
- The crowd needs Motivation. Let the customers identify with the contest.
- Food brands should have a viral concept: Once the crowdsourcing campaign goes viral, it reaches a lot of participants and the more customers are participating, the more creative innovations will the food brand gain.
- And last but not least, food brands need luck. A good campaign does not guarantee a successful campaign.
Food brands need and want to generate innovation and they want to innovate for their customers – so why not integrate consumers into the innovation process. There are so many good examples how food brands use crowdsourcing – which food brand will be the next one?
Crowdsourcing – Real Innovation or rather a Good Marketing Campaign?
McDonald’s crowdsourcing campaign ‘My Burger’ demonstrates that a company can easy launch such a project and motivate a high number of customers to participate. Besides a lot of marketing for the brand, the crowd generated a lot of new ideas and innovation. New burger ideas, ingredients and burger names has emerged and McDonald’s will benefit from this insights from a long-term perspective.
However, the value of the whole project can also be described in another context: Besides a lot of new ideas and innovation, the crowd generated a lot of marketing for the brand. Marketing that did not cost a lot for McDonald’s. The online and offline promotion that the crowd generated went viral and was a total success for McDonald’s – The crowdsourcing campaign brought additional customers, more sold burgers and, overall, more total revenue (VivaKi, 2012).
A lot of promotion, satisfied customers and new insights and innovation – In the end, McDonald’s is the winner of the campaign and a prime example for all food brands that want to use crowdsourcing campaigns to generate innovation.
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