The Dark Side Of Customer Participation: Theoretical And Empirical Study

Firms benefit from engaging customers in new product development(NPD)?while customer participation(CP)brings potential costs and risks or may even negatively impacts new product outcomes.When involving customers as information provider and relation builder,firms may manage the challenges posed by effective management of customer participation and mitigate the negative impact of customer engagement in NPD process.Whereas current literature emphasizes the positive consequences of customer participation and a few researches have taken note of the negative effect of customer participation,the extant research is more fragmented and only concerned with the negative participatory results in certain contexts.The current literature lacks a systematic conceptual and empirical study showing the connotative meaning of the dark side of customer participation.Our study defines the dark side of customer participation in NPD context.Drawing on social capital theory,this study differentiates two forms of customer participation,elaborates the connotation of the dark side of customer participation and sheds light on the direct effect and relation between two forms of customer participation and the dark side of customer participation systematically.The social capital theory has become an important perspective to study the nature of connection collaboration between organizations.As the cohesive bonds between firms and business customers,social capital is a valuable asset that can help explain why engaging customers in NPD process can promote new products or services performance.Just as the opposite of the asset is debt,social capital may vanish or translate into social liability.Customers provide informational and relational resources to firms when they are being involved in NPD process,but these resources will not automatically translate into specific assets required by the new products or services.Conversely,if these resources are inappropriately utilized and even wrongly used,they could come to the social liability.The mechanism behind translating social capital into social liability is dynamic resources and the relational inertia.On the basis of three dimensions(cognitive,relational and structural)of social capital and social lability theory,this paper puts forward the social lability model of customer participation,conceptualizes the dark side of customer participation with information overload,customer entitlement and structure rigidity.From a relational resource perspective on social capital,this study divides customer participation into two categories:CP as information provider(CPI)and CP as relation builder(CPR).We explore the relation between the two forms of customer participation and information overload,customer entitlement and structural rigidity in the social liability model and compare the differences of dark side caused by two different forms of customer participation.This paper also discusses the four situational factors involved in NPD context,participation stage,CP formality,technological capability and product customization,points out how these factors can moderate the relation between two forms of customer participation and the three variables in social liability model,and provides feasible and theoretical guidance to firms for managing customer participation in NPD process effectively.Our study also explores the relation between the three variables in social liability model and the NPD performance,speed to market.We conducted interview with design and marketing managers and then distributed a paired questionnaire to some innovative companies or start-ups in high-tech park in Beijing and Tianjin TEDA.164 well-matched data finally are collected and product was used as analysis unit.Hierarchical regression analysis was used to test the fit between two forms of customer participation and social liability model and the moderating effect of four situational factors in NPD context.The empirical results support most of the hypothesis proposed in this study.1)CP as information provider,CP as relation builder and social liability model:In contrast to CP as information provider,CP as relation builder introduces more information overload and structural rigidity.2)The moderating effect of the situational factors in NPD context:Participation stage positively moderates the relationship between CP as information provider and customer entitlement;CP formality negatively moderate the relationship between CP as information provider and information load;Technological capability weakened the relationship between CP as relation builder and the structural rigidity;Customization strengthens the relationship between CP as information provider and structural rigidity.3)NPD performance and social liability model:Information overload and customer entitlement delay speed to market.Structural rigidity has no impact on speed to market.Finally,this study points out the theoretical and managerial implications and discusses the limitations and future research directions.