Social Media and Innovation

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Social Media and Innovation

A qualitative study on the benefits and challenges of social media

use throughout the innovation process

Master Thesis

MSc. Strategic Innovation Management Faculty of Economics and Business

University of Groningen

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Abstract

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1. Introduction

In today’s economy, innovation is critical for a firm to survive in competitive markets, which are becoming more complex through the inclusion of more actors and more stakeholders (Crossan & Apaydin, 2010; Archer-Brown & Kietzmann, 2018). The generation, development, and integration of knowledge from both internal and external sources play a key role in the innovation processes (Chesbrough, 2003). One critical stakeholder and external knowledge source is the firm’s consumer, whose role within innovation has become even more critical, due to the trend of increased customer focus within innovation and knowledge management (Archer-Brown & Kietzmann, 2018). Another trend is the increasing importance of social media platforms in almost everyone’s life over the last decades. This trend has not gone unnoticed by companies, which turn to social media platforms to market their products and engage with their customers. A clear increase in the use of social media to connect, interact, and collaborate with consumers has been seen over recent years (Mount & Martinez, 2014). The importance of innovation, combined with the increased customer-centric focus, enable opportunities for social media. As such, it can be concluded that in today’s world social media and innovation are closely intertwined (Brandtzaeg, Haugstveit, Lüders & Følstad, 2016).

It is not a surprise that in recent years the research done on the use of social media has increased significantly, addressing a broad variety of topics (Bhimani, Mention & Barlatier, 2019). The current literature and its findings have been summarized in the systematic literature review of Bhimani et al. (2019), identifying the research trends and gaps in the field. Most research, however, has focused on the business applications of social media in relation to marketing activities. The current understanding on the use of social media for innovation is limited (Mount & Martinez, 2014; Muninger, Hammedi & Mahr, 2019).

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of leaking valuable information and the fear of losing control (Mount & Martinez, 2014). Apart from the research done by Mount and Martinez (2014) and Jussila et al. (2011) none of the researchers distinguished their results for the different phases of innovation.

As such, current literature offers little guidance for developing the strategic use of social media for innovation (Muninger et al. 2019). Particularly limited is the research on how social media can be used as an innovation tool to facilitate user collaboration at different phases of the innovation process. To help close this gap in the literature, this research will examine the use of social media for innovation purposes and evaluate the benefits and challenges encountered at different phases of the innovation process. This study applies a qualitative approach to derive an overview of these benefits and challenges. The research question that I will try to answer in this paper is:

What are the benefits and challenges of using social media across the phases of the innovation process?

In order to find an answer to this question, I have gathered data through conducting interviews with 14 company representatives, to discuss which benefits they experience and challenges they face while engaging customers through social media for innovation.

This research complements previous investigations of social media management, such as Muninger et al. (2019) and Mount and Martinez (2014) and adds to the existing literature in two ways. Firstly, it will confirm the already discovered benefits from the use of social media for innovation and link these to the different phases of the innovation process, which to my knowledge has not been done before from the business-to-consumer (B2C) perspective. Moreover, new benefits were discovered and linked to phases in the innovation process. Secondly, it adds to the currently limited research on the challenges of using social media for innovation, by linking existing and new challenges to the different phases of the innovation process.

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The results show that the majority of companies actively engage with its customers in the ideation/ design phase of the innovation process. Most of the benefits and challenges found in this phase match the current literature, some new challenges were discovered, which add to the existing literature. The same applies to the benefits and challenges found in the commercialization phase of the innovation process. The results on the development phase show that the majority of companies are not actively engaging its customers through social media in this phase. The companies that do, use private Facebook groups for this purpose. The results indicate that private Facebook groups might offer companies promising opportunities to engage with their customers throughout the development phase.

This paper will be structured as follows. Firstly, the existing literature on social media for innovation and the different phases of the innovation process will be discussed. Subsequently, the methodology used to collect and analyse the data will be described. Furthermore, the results section will provide an overview of the found benefits and challenges. Following, the key findings, implications, limitations, and further research opportunities will be discussed in the discussion. Lastly, in the conclusion a summary of this research will be provided.

2. Literature Review

In this section, the relevant existing literature will be reviewed. Firstly, the concepts of innovation and social media will be discussed. Afterwards, the connection between the use of social media and innovation will be elaborated upon. Finally, the different phases of the innovation process will be discussed.

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This definition includes social media platforms like Twitter, Facebook, Instagram, WhatsApp, Snapchat, YouTube, and the relatively new platform TikTok, however is not limited to these platforms. This broad definition is chosen, because I do not want to limit this research and the interviewees’ answers to the generally known networks.

2.1. Social Media and Innovation

Innovation in many forms, such as new product development and new service development has emerged as a strategic imperative for firms (Alam, 2006). Some would even say that the success of a company depends on its ability to innovate (Lagrosen, 2005). With this increasing pressure to innovate, many firms are looking for new internal and external knowledge sources. An external source, which could possibly provide the firm with rich and diverse knowledge, is its customers (Alam, 2002). Social media offers new ways for firms to engage with their customers. An engaged customer can actively partake in the innovation process, through for example the sharing of ideas and preference information (Jaakkola & Alexander, 2014; Gruner, Homburg & Lukas, 2014). Previous research has found that through social media, customers’ needs can be identified more comprehensively than through traditional settings, because the needs of customers, both expressed and unexpressed can be searched for and identified more easily (Nguyen et al., 2015)

The social media tools to engage customers are not limited to mainstream social networking sites, such as Facebook and Twitter, but also include other applications that facilitate exchanges of information, such as blogs and wikis (Bhimani et al., 2019). Social media platforms provide low entry barriers and are considered user-friendly, making them an effective way to bring diverse actors together to foster innovation (Lin, Li & Wang, 2017; Ooms, Bell & Kok, 2015). Research shows that most organizations benefit from using social media for product innovation, since it can lead to more and better product ideas and faster time to market (Halale et al, 2015).

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whole innovation process (Mount & Martinez, 2014; Muninger et al., 2019; Halale et al., 2015). Research even shows that companies which use social media in every stage of the innovation process, benefit most from their efforts (Roberts & Piller, 2016).

Three different ways social media can contribute to market foresight in the context of innovation were identified: creativity, expertise, and collective intelligence (Cachia, Compano & Da Costa, 2007; Mount & Martinez, 2014). Creativity emerges when many users with diverse knowledge interact. Social media offers firms the possibility to tap into this pool of diverse knowledge and use it throughout the innovation process, this can also boost internal creativity and innovation. Additionally, social media can be used as a source of expertise in the form of insight and market foresight. The large amounts of data available through social media can help firms identify emerging trends. Through analysing the exchanges of thoughts and opinions shared on social media firms can gain valuable foresights. Lastly, collective intelligence refers to knowledge synergies that can emerge from social media. Social media platforms can bring together dispersed and diverse groups of people which can lead to collective and collaborative intelligence (Cachia et al., 2007; Mount & Martinez, 2014).

Firms that want to use customer engagement through social media should carefully consider how they want to involve their customers to gain market insights. Additionally, the right approach for their company must be identified, since just using social media does not automatically lead to innovation performance. A dedicated strategy that links social media use with the innovation strategies of a company is needed (Roberts & Piller, 2016). Picking the right social media approach for a company seems to be key in order to benefit from the efforts. In order to establish such a strategy, it is important to recognize the benefits and challenges of the use of social media for innovation. Moreover, the innovation process consists of various phases, a firm might need a different approach for each phase, depending on the areas of customer engagement they want to explore. Making a distinction between the benefits and challenges across the different phases of the innovation process, will provide a clear idea on what to consider when creating such a dedicated strategy.

2.2. The Phases of Innovation

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not a phase, however it is seen as the start of the innovation process. The stages following the discovery are: scoping, building a business case, development, testing and validation, and the launch. In later research ‘post-launch review’ was added at the end of the process (Cooper, 2008). Following the research by Mount and Martinez (2014), I combined these five stages into three phases: the ideation/ design phase, the development phase, and the commercialization phase.

The ideation/ design phase is a combination of the idea generation, the scoping, and the building the business case stages of the stage-gate model. Within this phase new ideas are discovered or generated. Ideas coming from multiple sources are screened and it is determined whether the idea will continue into the process or not (Cooper, 1990). Cooper (1990) already recognized the importance of ‘voice of customer’ and advised to communicate with customers already in these early stages. This phase also entails a quick review of the project and often includes a preliminary market assessment and a technical assessment. Afterwards, the business case is developed, this often includes research on the customers’ needs and wants, a competitive analysis, concept testing, and technical and manufacturing assessments. In this phase it is important to verify the attractiveness of the project, before a lot of money is spent in the next phase, which is the development (Cooper, 1990).

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interaction within these early stages can significantly influence the performance of new products (Gruner & Homburg, 2000). However, there is a significant challenge when using social media in the ideation/ design phase, namely the issue that the open nature of social media make it nearly impossible to regulate and control the ideas coming in. This makes isolating contributions within the target group difficult (Mount & Martinez, 2014).

After the ideation/ design phase, the development phase starts. This phase is a combination of the development and testing and validation stages from the stage-gate model. In this phase the emphasis is on technical work, while marketing and manufacturing activities also proceed (Cooper & Kleinschmidt, 2001). Additionally, this phase often includes the testing and validating of a prototype. Testing the project can take multiple forms, such as in-house tests or field trials. Within this phase the use of social media has a clear benefit, as it can enable brand or product co-creation (Muninger et al., 2019). However, only particular users, such as brand ambassadors, might be able to enhance the innovation process, because they have a better understanding on the brand and value consistency in innovation activities (Muninger et al., 2019). Co-creation through social media empowers users and can help break corporate barriers by opening the brand to the consumer crowd (Mount & Martinez, 2014). A challenge discovered by Mount and Martinez (2014) is the internal lack of capability to deal with the large amounts of user-generated content. Other found challenges included the resistance of senior managers, who fear ceding managerial power and losing control of the brand (Mount & Martinez, 2014).

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Ideation/ Design Development Commercialization

Benefits • Increased speed and quality of ideas

(Mount & Martinez, 2014)

• Increased market acceptance of new products (Hoyer et al., 2010) • Support R&D at low costs (Mount &

Martinez, 2014)

• Reduce the reliance on more traditional ways of doing market research (Mount & Martinez, 2014)

• Enable brand or product co-creation (Muninger et al., 2019)

• Empower users and break corporate barriers (Mount & Martinez, 2014)

• Cost-effective way to access masses of users (Muninger et al., 2019; Mount & Martinez, 2014)

• Can lead to viral marketing through word-of-mouth campaigns (Muninger et al., 2019)

• Increased interactivity with customers (Halale et al., 2015) • Reaching new customers (Halale et al., 2015)

• Gaining insight into customer behaviour (Halale et al., 2015)

• Identifying customers’ needs more comprehensively (Nguyen et al., 2015)

Challenges • Internal lack of capability to deal with

the large volumes of data coming in (Mount & Martinez, 2014)

• Internal lack of capability to deal with the large volumes of data coming in (Mount & Martinez, 2014)

• Resistance of senior managers, who fear ceding managerial power and losing control of the brand (Mount & Martinez, 2014)

• Internal lack of capability to deal with the large volumes of data coming in (Mount & Martinez, 2014)

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3. Methodology

To fill the gap in the current literature on the benefits and challenges of using social media in the innovation process, a qualitative study design was followed. Since the research topic is relatively new and because there is little prior research, a qualitative research method seems suitable (Pratt, 2009). In order to explore this topic, more data is needed. To gather data, in-depth, semi-structured interviews with company representatives were conducted. The main criteria for choosing companies to interview were that the company is active on social media and has a focus on innovation. A firm is characterized as active on social media when it has at least a Facebook and Instagram account, on which the firm posts/ updates at least twice a week.

3.1. Data Collection

To find the answer to the research question I have gathered primary data through interviews. Interviews were the chosen data collection method, because the research topic is relatively new and unexplored and interviews provide much more detailed information than other data collection methods, such as surveys (Boyce & Neale, 2006). The interviews were conducted in October, November, and December 2020. Due to the circumstances regarding Covid-19, face-to-face interviews were not possible. Video call, phone call and e-mail were therefore the methods used for the interviews. On the one hand, video call and phone call interviews have some drawbacks compared to face-to-face interviews. Among others, face-to-face interviews offer better possibilities to read and use visual cues and non-verbal communication. Research has also shown that phone interviews are on average shorter than face-to-face interviews (Irvine, 2011). On the other hand, there are some significant benefits to phone/video call interviews, namely the flexibility it offers in terms of organizing the interview, the cost and time efficiency, and the reduced health concerns, which were logically most critical during these times (Deakin & Wakefield, 2014).

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Participants were selected through purposive sampling. Through purposive sampling the most relevant and plentiful data can be collected (Yin, 2011). The interviewees were selected based on how active the companies are on social media platforms, such as Instagram and Facebook. More information on the interviewed companies and attached company labels can be found in Table 2.

Table 2. Research Sample

Companies Industry Sector Size** Company label

Company 1 Food and drinks Small Small, food and drinks 1 Company 2 Food and drinks Small Small, food and drinks 2 Company 3 Food and drinks Medium Medium, food and drinks Company 4 Food and drinks Large Large, food and drinks Company 5 Cosmetics Small Small, cosmetics Company 6 Cosmetics Medium Medium, cosmetics Company 7 Consumer goods Small Small, consumer goods Company 8 Consumer goods Medium Medium, consumer goods Company 9 Retail Large Large, retail

Company 10 Gaming Small Small, gaming Company 11 Travel Large Large, travel Company 12 Telecommunication Large Large, telecom Company 13* Education Small Small, education Company 14* Media Medium Medium, media

* B2B company.

** firms are considered small when they have up to 49 employees. Firms are considered medium when they have 50 to 249 employees. Firms are considered large when they have more than 250 employees.

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One of the B2C companies was interviewed twice, due to time constraints in the first interview. The e-mail interviews were conducted at the end of the data collection process, through sending a specific list of questions to the respondents. In this stage of the data collection, it was clear which data I wanted the gather, therefore it was possible to send a specific list of questions to these companies to gather additional data. The questions were all open-ended questions, similar to the questions asked in the interviews and can be found in Appendix B.

Table 3. Interview Details

Company Label Respondent Method Time (min)

Small, food and drinks 1 Head of Growth & Head of Marketing

Video call interview 40 Small, food and drinks 2 Customer Engagement

Employee

Video call interview 45 Medium, food and drinks Customer Service Supervisor Video call interview 45 Large food and drinks Senior Brand Manager

Benelux

Video call interview 60 Small, cosmetics Content Marketeer Video call interview 50 & 35 Medium, cosmetics Customer Engagement

Employee

Email /

Small, consumer goods Content Specialist Video call interview 40 Medium, consumer goods Press Team Email / Large, retail Manager Digital Innovation

Lab

Phone interview 30 Small, gaming Sales & Communication

Employee

Video call interview 35 Large, travel Senior Director, Global Head

of PR, and Social

Video call interview 30 Large, telecom Online Channel Manager Video call interview 45 Small, education* Growth Marketing Specialist Video call interview 55 Medium, media* Digital Marketeer Video call interview 40

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3.2. Data Analysis

The gathered data was analysed following the five data analysis steps as described by Yin (2011). Firstly, the data was compiled. The audio recordings of the interviews were transcribed and ordered, this compilation of data is considered the database. The gathered data was then disassembled without coding, through highlighting the relevant data. Disassembling the data without coding has the potential benefit of being more thoughtful and insightful. However, there is the risk of inconsistency and inaccuracy, therefore I returned to the original data numerous times to make sure the disassembled data was still faithful to the original interview data (Yin, 2011). The next step was to reassemble the data. A common way of arraying the data takes the form of matrix (Yin, 2011). In order to figure out what the matrix should look like, a close look was taken at the paper by Mount and Martinez (2014). I decided to use a similar set-up, with the innovation phases in the columns and the benefits and challenges in the rows. The data was reassembled by entering the relevant interview data within the cells, with the goal of placing some data into each cell (Yin, 2011). Through abbreviating I avoided that the cells became too large or crowded (Yin, 2011). To make sure the abbreviated version of the data faithfully represented the original, the original data was revisited frequently. The final two steps of data analysis as described by Yin (2011) include the interpreting and concluding, which will be done in the results and discussion sections.

3.3. Research Quality

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4. Results

In this section the findings of the interviews will be presented. Quotes from the interviews will be used to provide context and examples. Throughout the interviews I discovered that the use of social media for innovation was a relatively new topic for several companies. Some even declared there is currently no direct link between the use of social media and the innovation process. When asked about whether social media were actively used in the innovation process, one respondent declared:

“Previously, they were not, and it was not necessarily something that was a really big focus for us. However, I would say that over the past year, a goal of my team was to make sure that we could start to feed into that process. So, I would say about a year ago, we started using social listening to help search for specific keywords.”

Large, travel

Other companies declared social media to be critical for their company and their innovation process. Thus, large differences on the topic of social media and innovation were found between the interviewed companies. A trend noticeable throughout the interviews was that most companies decided not to involve customers through social media during the actual development of new products and/or services.

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Table 4. Overview of Results

Ideation/ Design Development Commercialization

Social media Mainly Facebook and Instagram Mainly Private Facebook groups All social media platforms

Benefits • Quick way to discover customers’ needs

• Easy to get information on the potential demand for a new product/ service

• Simple way to target specific audiences and get their input

• Direct access to customers’ input

• Positive effect on the firm’s reputation

• The development of products adjusted to customers’ needs and wants

• Customers can be used as valuable testers

• Create a brand community

• Shorter decision making-process, due to feature of direct ordering • Create tension/ excitement for the

new product/ service

• The large reach of influencers can boost the product launch

Challenges • How to differentiate the social media input

from other research done within the company • How to ensure the quality of the input, and

filter out the nonvaluable input • When a trend becomes visible on social

media, the company might already be too late • Hard to save the ideas coming in, since some

social media platforms are transient

• Asking the right questions • Receiving too many diverse

opinions

• Understanding which input is vital • Risk of leaking valuable

information/ risk of copycats • How to ensure diversity in private

Facebook groups

• High maintenance of private Facebook groups

• Finding the right influencers and working with them

• How to keep posts attractive • Company-wide coordination of

product launches

• As a company you should not exaggerate your social media engagement

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4.1. The use of Social Media in the Ideation/ Design Phase

Throughout the interviews it was recognized that all companies do to some extent use social media in the ideation/ design phase of the innovation process. The majority of companies use social listening to find out their customers’ needs and wants, the related benefit is the speed at which social media can offer the firm information on these needs and wants. Companies also use social media platforms to confirm customers’ needs. When a company already has an idea for a new product or service, but still needs to verify the potential demand for the product before development starts, social media offers a suitable platform to test this. An example provided in one of the interviews is that through advertising on social media, companies can test whether the need for a product is actually there and whether there are enough customers with this need:

“During this phase we use social media advertisements to check whether the need is really there. [..] You can test whether customers actually have this need or if they do not click on the advertisement. That is most important. When there are enough people clicking on the advertisement, the customer is interested enough to see what the offer is.”

Large, retail

Information on and confirmation of customers’ needs is critical for a company. An additional benefit is that social media are suitable to get this information from specifically targeted audiences. Through advertising, companies can target a specific customer segment and gather feedback or information from them. The ease of getting feedback from a specific group of people is something traditional ways of marketing cannot offer.

Not only can social media be used to confirm customers’ needs and gather feedback, but social media also offer companies direct access to customers’ input. As discussed before, there has been a clear trend of customer-centric innovation. Companies have come to realize that in order to make suitable products for their consumers, these consumers need to be included in the creation of these products or services. Social media seem to offer these companies direct access to their customers and their input, which is critical. One respondent declared:

“In order to be a truly successful company in this day and age you need to be able to deliver on what your customers are looking for. [..] From our perspective social media gives us direct access to their input.”

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Multiple challenges of using social media within the ideation/ design phase became apparent in the interviews. One challenge mentioned by several respondents in the interviews is the low value of many of the ideas coming in. Filtering through all the ideas coming in takes a lot of time and effort by the companies. They need to filter out a lot of “noise” before getting down to the core insights that can prove to be valuable. The reason behind all this noise differs. Where one representative from a small company mentioned getting many ideas that are already on the market or simply unrealistic, a representative of a large company declared it has to filter through many spambot messages to get to the qualified insights. A related challenge is that companies need to find ways to differentiate the insights pulled from social media from the other research that is done within the company. So once a company has filtered out the noise to get to the valuable customer insights it needs to ensure these insights are not already obvious within the research department but complement the internal research programs.

Another challenge is about preserving the valuable insights. Social media offer limited tools to label or save certain messages coming in. Capturing the specific suggestions and or ideas can therefore be difficult. One of the respondents mentioned:

“Something that is difficult is that we cannot save everything coming in through social media. [..] Direct messages and stories are all transient.”

Small, food and drinks 1

A final challenge in this phase is related to trend watching through social media, once a trend becomes visible on social media it might already be too late to react to this as a company. Adapting the supply chain to produce the new product will take time. Since social media trends often have a short nature, adapting on time is a significant challenge. One of the respondents declared that social media might therefore not be the right platforms to look for new product ideas and still prefers traditional conferences. The respondent stated:

“When you notice a trend on social media, you are actually already too late. You should try to forecast what is trending in small groups now, but will be the next big thing. [..] There is so much involved in developing a new product, that it is impossible to just ask for ideas on social media and start developing. It costs a lot of money, because of the different factors involved. You will need to adapt the supply chain and find a factory to produce the new product.”

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4.2. The use of Social Media in the Development Phase

This section will show the benefits and challenges of using social media in the development phase. For this phase it was hard to get valuable insights on the benefits since many companies declared to not use social media during this phase to involve customers for innovation. Moreover, these companies decided to keep the development phase activities internal, because of the challenges of involving customers. In the sample however, there are a few companies that do actively involve their customer in the development of new products, these companies discussed some clear benefits, which will be explained first.

One of the company respondents, which initially declared to not really involve its customer throughout this phase of the innovation process, did provide one example of customer involvement in the development phase through social media. For the development of a new product, input in the form of pictures, was asked from its customers. This resulted in enthusiastic reactions, creating an overall feeling of enthusiasm for the brand among the customers. The company described the positive effect on the company’s reputation as a clear benefit of involving its customers in the development phase.

Three respondents, who more actively use social media in het development of new products, described that this provides them with the opportunity to adjust the product, so it fits the needs and wants of the community. Through the community’s feedback or answers to specific poll-questions, customers can make their ideas clear on what the product should look like. An additional benefit is that the company does not have to produce several similar products and then hope that some of them will do well in the market, the customers have already specified which product will suit the majority best. One of the respondents stated:

“The customers’ input is always taken into consideration. We aim to design a product that has the company signature, but also really fits the needs of our community. For us designing an innovative product is not only based on our own idea of what innovation entails, but also what our community thinks or experiences as “innovation” regarding our designs. This way we can improve the product based on our customers’ needs. It also helps to understand what customers really like about our product and what not. All this in an “informal” setting, where we can engage and connect with the end user.”

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Moreover, creating products together with customers can lead to very successful products, it could even lead to products, which would not have been created without the input of customers. This is shown by the next example:

“The most recent example is in choosing which colours to release for our new make-up product. Because of social media outreach and questionnaires, we added an entire new colour. This is now one of the two best-selling tints of the product.”

Medium, cosmetics

In the development phase customers can be engaged throughout the development of the product, however, this phase also includes the testing and validation of the new product/ service, which can lead to other opportunities for social media. One found benefit is linked to finding product testers through social media. One of the respondents uses its private Facebook group to send its customers prototypes of products to test. Another respondent plans on using its private Facebook group for this purpose as well. The representative declared that its most active and loyal consumers are involved in this private Facebook group and states that using these consumers as testers will be both beneficial for the customers and for the company. Loyal customers will get the chance to test new products, and the firm will get valuable feedback from its most active users.

Even though there are some clear benefits of engaging with customers through social media in this phase, many companies choose not to. This is due to the challenges that arise during this phase when involving customers through social media. A challenge that three respondents mentioned during the interviews is that of gathering and understanding vital information in this phase. Asking the right questions was given as a related challenge. When the questions asked are not clear enough, the received input will be too diverse, and it will be impossible to use all this input. One respondent acknowledged the challenge of understanding which input is vital and declared:

“Feedback by customers is always provided on personal interest, however this does not mean it is equally relevant for everyone.”

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Another company also faces this challenge and mentioned that you cannot satisfy all your customers with a new product/ service and when you try to do this, your firm will get stuck in the development phase:

“You cannot do right by everybody, because everyone is different. We will get too many different opinions and there comes a point where we will have to say: this is what we are going to make. If you start engaging end-users too early in the development of a product, then you can continue to develop forever, and the product will never launch.”

Large, telecom

A final challenge that is mentioned by several respondents is the risk of leaking valuable information to competitors. This challenge or risk seems to withhold companies from involving their customers in the development phase of the innovation process. One of the respondents declared:

“This phase is probably least ‘till none present on social media. The foremost reason is trademark, patents, and copyright. As soon as designs are starting to get a concrete shape, our legal team makes sure all our plans and designs are protected. This phase of the process stays internal. [..] Copycats are the risk. People that have ill intent and want to copy our designs. We have already experienced this!”

Medium, consumer goods

The importance of being able to capture the value of an invention seems to outweigh the benefits of engaging with consumers during the development of new products for these companies.

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4.3. The use of Social Media in the Commercialization Phase

The most active use of social media for innovation across the data sample was in the commercialization phase of the innovation process. Every company in the sample declared that new product launches are announced on social media. Launching a product on social media provides the opportunity to reach a large target audience at once. This reach can be increased, through the use of social media influencers. Influencers often have a large reach, which according to one of the respondents is far bigger than the reach of a commercial on television or an article in a paper. This increased reach can offer significant benefits for a company, however working with influencers does also come with challenges, which will be discussed later in this chapter.

Some companies start the promotion of their new product on social media a couple of days before the actual launch of the product. Social media are suitable platforms to build tension and excitement for the new product/ service. These early promotion posts often do not display the product yet, however they are created to grab and hold the attention of the potential customers until the actual product launch. Logically the firms hope that the attention and excitement built will lead to increased sales of the new product/ service. Whether this strategy is effective cannot be concluded, however the majority of firms included in this research, did state that a product launch through social media leads to increased activity on both the social media platforms and the company website.

A related benefit found in this phase is that through social media you can offer customers the possibility to order directly. With just a few clicks the product can be ordered. This can lead to shorter decision-making processes and therefore promoting new products through social media can be very beneficial:

“People want to order directly, social media offers this opportunity. When we are launching a new product, we see that many people use this option. The decision-making process of a customer that orders directly through social media is a lot shorter (compared to the decision-making process that a customer goes through on the website).”

Small, cosmetics

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the chance that someone who is shopping will try this new product is larger than when it is not launched on social media. The respondent declared that customers do not always check the “newly added” section on the website and therefore the social media launch might create awareness for the customer to check this section when shopping.

Even though most companies actively use social media in this phase of the innovation process, there are still some significant challenges. Firstly, some challenges are linked to the use of influencers to increase the reach of a new product/ service launch. Several companies declared that finding a social media influencer that fits the brand can be a real challenge. Even though influencers have a reach that most companies cannot realize by themselves, influencers are considered expensive and quite difficult to collaborate with. Where one of the respondents declared facing the challenge of finding influencers that fit the brand, another respondent struggled with the lack of marketing knowledge of some of the influencers.

Another challenge of using social media for innovation in the commercialization phase is linked to the company’s own new product announcements. Three respondents admitted they see a challenge in keeping their social media posts attractive. Especially one of the companies, which launches several new products a month faces the challenge of creating enthusiasm for the new product launches. One of the respondents that also recognizes this challenge, faces difficulty with creating social media posts that are both informing and exciting for their customers:

“The challenge is to make sure that your posts keep attracting your customers, but also clearly describe the new product. The new product always has to be unique and different, getting this across through social media is not always easy.”

Small, gaming

A final challenge in this phase is related to the company-wide coordination needed for a product launch. A product launch via social media, reaches a large audience within a short time period. This can have significant companywide effects, which companies need to be prepared for. One of the large companies in the sample mentioned this challenge, which the company faced during one of its last big product launches. The whole company should be ready when a new product will be launched, otherwise the product launch can have a negative impact on the company and its reputation. The respondent mentioned:

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calls. If you do not have enough employees, that again will have a negative effect on your campaign. Imagine when people call because they want to order the product, and customer service is not available or the product itself is not available. It is not just a marketing campaign, you have to think about the after care. It is quite an operation.”

Large, telecom

4.4. Other Challenges

During the interviews two other challenges were identified that could not be linked to one of the phases of the innovation process. Firstly, the challenge of not exaggerating your online presence as a company. Some respondents declared that too many advertisements or posts could have a negative effect on the company’s reputation, finding the right amount of posts is described challenging. Secondly, the challenge of continuously changing social media platforms, which was mentioned by many respondents. Throughout the last decade, several new social media platforms have emerged, some would even require new types of content. The respondents described it as a real challenge to keep up with all these changes. One of the respondents declared:

“It changes constantly, new platforms are created, and older ones disappear. Within the platforms there are also new innovations. The challenge is to decide which platforms you want to use. How much do we need to invest and what will be the benefits for us?”

Large, food and drinks

4.5. Private Facebook Groups

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are not invite-only, however, customers who want to join the group will have to be accepted by the administrator of the group. One of the cosmetics companies’ representatives explained that the people who want to join the group are screened by the content marketeer. The only criteria used is that the customer does not openly work for a direct competitor. This way the challenge of leaking valuable information to competitors within the development phase is managed.

Having a private Facebook group also comes with challenges. The representative that recently started its invite-only Facebook group faced the challenge of how to ensure diversity in the group:

“The best research is research that is pulled from a very diverse group of people so that you are making sure that you are bringing in all these different perspectives, but people's personal data is private. So, when we go into our system to identify people that we want to invite to this group, we are unable to identify whether they are male, female, what their economic level is and things like that. We can only look at their purchase history. So, that was one struggle, how do we make sure that we continuously have a diverse group of people.”

Large, travel

Another challenge discussed by one of the cosmetics representatives is the high maintenance of a private Facebook group. When the company does not post frequently enough or when the posts are not engaging, the company might not be able to get a lot of valuable information out of the group. The respondent sees challenges in this demand for quality content and stresses the importance of offering something extra to the group members. This can take many forms, such as letting the group members know about a new product before it is openly announced on social media or using the private Facebook group to find testers for new products, which in turn could lead to valuable insights in the form of feedback.

4.6. Size and Industry Differences

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When looking at the various industries in the sample, a few differences can be identified. In the ideation/ design and commercialization phases, no striking differences are observed for the different industries. However, a difference is observed between the industries in the development phase of the innovation process. The companies most active in engaging their customers during the development phase, were both companies operating in the cosmetics industry, which is a very competitive industry with many rivals. The company operating in the telecom sector, which is highly regulated, spoke of great risks of involving customers during development, because of the highly competitive pressures in the market. One of the companies operating in the consumer goods industry also declared that in the development phase customers are not engaged through social media. The reason being that they do not want other companies stealing designs before the patents and copyrights are obtained.

4.7. Differences between B2C and B2B

This research focused on B2C companies, this choice was made due to the presumed different benefits and challenges of social media use for innovation (Jussila et al., 2015), and because Jussila et al. (2015) already researched the benefits of using social media throughout the innovation process for B2B companies. However, the data of two B2B firms was gathered and will be used to identify differences between B2B and B2C companies. The data indeed shows several differences, which will be discussed for every phase in the innovation process. A difference not related to the different phases of innovation is the social media platforms used by the companies. The focus of social media platforms for the B2B companies was on Twitter and LinkedIn, whereas the majority of interviewed B2C companies stated that Facebook and Instagram were their main social media platforms.

In the ideation/ design phase the biggest difference between the B2C and B2B benefits and challenges can be found. One of the B2B respondents actively searches for new product ideas or product improvements ideas on LinkedIn. However, the respondent does not actively engage with its target audience, which is university professors. Described benefits are that gathering ideas through social media is free, less time consuming and available for everyone within the company. The respondent mentioned:

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consuming and expensive, and sometimes you don't even gather much from those events.”

Small, education

These benefits are relatively similar to the benefits of B2C companies, however the challenges are different. The respondent describes that the biggest challenge in the ideation/ design phase is a copyright issue. If an idea from social media is used, the company needs to give credit to the university professor, who provided the idea. A related challenge is that the respondent is afraid of reputational damage when many of the product ideas are not their own. The other B2B respondent declares not to use user-generated content gathered through social media. The respondent mentioned that when they want to involve a customer, social media would not be their first choice, mostly because the projects are often specific for one customer.

Both B2B companies do not actively involve customers in the development phase of the innovation process. The found challenges are similar to those in the ideation/ design phase and to those of B2C companies. The benefits and challenges in the commercialization phase are also similar to those of B2C companies. One of the respondents declared that keeping posts attractive and capturing the attention of the audience is a real challenge:

“One of our biggest challenges with using social media is the fact that social media is just very dynamic. There are so many people who are posting at once. So, we have to compete in making our products and our tweets capture the audience's attention.”

Small, education

5. Discussion

Following the results, this section will link the existing literature and the findings of this research. Firstly, the key findings of this research and the research implications will be discussed in relation to the existing literature. Secondly, the implications of the findings for managers will be considered. Thirdly, the limitations of this research will be examined. Lastly, some promising fields for further research will be highlighted.

5.1. Key Findings and Research Implications

In this section the results of this research will be analysed and interpreted with use of the existing literature. The key findings of this research are:

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• Several new benefits and challenges were discovered in the interviews.

• Private Facebook groups offer significant benefits and co-creation possibilities. • Different benefits and challenges found for different industries.

• B2B companies use different social media platforms and face different challenges than B2C companies.

Each of these key findings will be discussed in more detail below.

5.1.1. Results confirm existing literature. The majority of benefits and challenges

found by Mount and Martinez (2014), Muninger et al. (2019), Halale et al. (2015) and Roberts and Piller (2016) as discussed in the literature review and as shown in Table 1, are confirmed by the data gathered in the interviews. Most of these benefits and challenges are not new in the literature and show similarities with research on open innovation and crowdsourcing. Such as, the need of mechanisms to process the large amounts of customer input and the importance of involving different customers to ensure diversity (Van de Vrande, de Jong, Vanhaverbeke & De Rochemont, 2009; Seltzer & Mahmoudi, 2013; Ulkuniemi, Pekkarine, Nicolajsen & Scupola, 2011). These similarities are not surprising since open innovation, crowdsourcing and innovation through social media all focus on involving customers in the innovation process. An additional explanation of the similarities in benefits and challenges found is that social media platforms are third party applications that offer all companies the same features, which could lead to similar use and therefore similar benefits and challenges.

5.1.2. New benefits and challenges found. During the interviews, several new benefits

and challenges were identified. These will be discussed for each phase of the innovation process. For the ideation/ design phase, no new benefits were identified.

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explicitly states that social media can help firms identify emerging trends. The company representative that mentioned this challenge also mentioned that there was currently little connection between their social media presence and their innovation process. It is possible that the lack of experience working with social media for innovation caused both these challenges.

In the development phase, a found benefit of using social media for innovation is that it can help firms create products that are more likely to fit customers’ needs and wants. This benefit fits with the existing literature on sources of innovation. Von Hippel (1988) found that customer involvement in the design and development of new products, can help firms incorporate customers’ specialized needs and preferences, which leads to improved quality of the product. A key challenge found in the development phase is the risks of leaking valuable information to competitors, which is an often-mentioned challenge in open innovation literature (Weber, Weggeman & van Aken, 2012). This challenge was for several companies the main reason not to engage with customers during the development process. Existing literature on the topic suggests that customers need to be involved during development in order to produce successful new products or services (Brown & Eisenhardt, 1995; De Brentani, 1995). However, Weber, Weggeman and van Aken (2012) add that when a company wants to avoid the risk of competitors knowing of the innovation, customers should not be involved, or participation should be limited to a few trusted customers.

In the commercialization phase a new benefit found is that social media might shorten the decision making-process, due to the feature of direct ordering. Research by Powers and Phillips-Wren (2012) found that social media can have extensive impact on personal decision making. Whether social media positively or negatively influences the rationality and effectiveness of decision-making has been a topic of debate (Power & Phillips-Wren, 2011; Wang & Yu, 2017; Hettiarachchi, Wickramasinghe & Ranathunga, 2017). Whether social media shortens the decision-making process cannot be concluded based on existing literature. However, the number of clicks is less when ordering through social media, than through ordering on the website, so possibly this shortens the decision-making process as well.

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desired reach of the company. Considering these requirements for successful collaboration it is not surprising some companies find this challenging.

5.1.3. Private Facebook groups hold significant benefits. The results show that the

majority of interviewed companies do not engage with their customers through social media during the development phase of the innovation process. The companies that do actively engage with their customers during the development phase use a private Facebook group for this. The companies provide a platform to their most active users and create a community. According to Bashar, Ahmad and Wasiq (2012) certain consumers have the desire to engage with the brand and other consumers, these consumers are likely to develop advocacy and loyalty towards the brand, which can lead to them becoming brand ambassadors. Muninger et al. (2019) found that only particular users, such as brand ambassadors might be able to enhance the innovation process, because they have a better understanding of the brand, and value the consistency in innovation activities. Considering that customers have to join this private Facebook group themselves and the high levels of interactivity in these groups, these consumers can be considered brand ambassadors and can therefore enhance the innovation process. Moreover, the brand community literature argues that the connectedness and sense of community of stakeholders determines the degree of co-creation (Berthon, Pitt & Campbell, 2019; Zhang, Kandampully & Bilgihan, 2015). Private Facebook groups are likely characterized by high levels of connectedness and sense of community, leading to higher levels of co-creation.

5.1.4. Differences between industries. The most significant difference between

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5.1.5. B2B compared to B2C. One difference found between the B2C and B2B

companies, is the social media platforms used. Where among the B2C companies Facebook and Instagram were described as the main platforms, for B2B companies the main platforms are LinkedIn and Twitter. This can likely be explained by the different target audiences of these companies. LinkedIn for example is the main professional networking platform and therefore B2B companies use this platform to connect with their business customers. Another challenge identified specifically for B2B companies is the need to give credit to the idea provider. This challenge was not mentioned by any of the B2C representatives, this might be because, customers of B2C companies are usually intrinsically motivated to share their ideas and therefore do not seek credits (Jeppesen & Molin, 2003).

5.2. Implications for Managers

This study sheds light on the benefits and challenges of using social media for innovation. The results can help managers make strategic decisions on how they want to use social media in the innovation process. The main implications for managers are:

• This research can potentially increase awareness on the fact that social media are no longer just marketing tools, social media platforms can be used to actively collaborate with customers throughout the innovation process, which offers several benefits and can lead to successful inventions. This awareness might also be an indication for managers that managing social media platforms requires substantial time. Most interviewees were responsible for multiple aspects within the company and indicated that there simply is not enough time to be fully engaged throughout multiple social media platforms. • The examples from the companies mentioned throughout this report might provide

managers with new insights and ideas on how the engage with customers through social media.

• This research might increase the awareness that private Facebook groups offer companies significant benefits and opportunities for co-creation with customers. For companies that want to actively engage and collaborate with their customers through social media for innovation purposes, looking into a private Facebook group might be a valuable and accessible option.

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5.3. Limitations

This research does not come without limitations. Firstly, this research is based on just one source of primary data, namely the interviews. Therefore, this study has a single method bias. The analysis and results could be improved with more sources of data. Secondly, this research is based on interviews with time restrictions of on average 45 minutes. Due to this time restriction, not every aspect of the research topics could be discussed in detail with all companies. Thirdly, the sample size of the data is limited to 12 B2C companies. The sample size within the companies is also limited, since within all companies only one manager or employee was interviewed. Inclusion of more firms and interviews with multiple employees within the firms could strengthen the generalizability of the results. Since the researcher was constrained in time, this could not be realized within this research. Lastly, this study does only cover a small part of all industries, and within the industries only a limited number of companies is represented. Additionally, most B2C companies of this study are Dutch companies, only one company is from the United States. Due to this small number of industries and countries represented within the sample, the results might not be generalizable to other countries and industries.

5.4. Further Research

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6. Conclusion

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