Crowdsourcing and Product Design

Topics: Innovation, Crowdsourcing, New product development Pages: 11 (3481 words) Published: August 14, 2012

Crowdsourcing is the practice of outsourcing tasks including a form of compensation to a wide external group of people. It is a newly used term which refers to the process of obtaining services, ideas, or content by seeking contributions from a large group of people particularly from the online community rather than from traditional employees or suppliers. Multiple types of businesses nowadays are using crowdsourcing for a diverse range of tasks that they find can be better completed by members of a crowd rather than by their own employees. This paper examines this new terminology “crowdsourcing” and its relation to marketing in general. It presents as a primary focus the impact of crowdsourcing on product development, the different categories used for product design development including recent examples, and finally, an outline of the advantages and the limitations of crowdsourcing in this respect.

The term ‘crowdsourcing’ was first coined in 2006 by journalist and author Jeff Howe, and his then editor at Wired Magazine, Mark Robinson [1]. Howe had begun noticing a trend amongst advertising agencies, television networks and newspapers which were leveraging content contributed by its users and applying the content inwardly to support parts of their businesses in significant and measurable ways. Howe has defined crowdsourcing 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” or, “the application of Open Source principles to fields outside of software” [1]. In his 2006 online blog posting, Howe goes on to explain that crowdsourcing can be either a form of peer-production where a task is undertaken collaboratively or, a task which is undertaken by individuals, provided that, in both cases, it is undertaken in an open call format and involves a large network of contributors.  Howe also makes a distinction between crowdsourcing and ‘commons-based peer production’ as described by Yochai Benkler [2]; crowdsourcing should include a form of payment or an incentive to perform the task, for example a prize for a submission which successfully resolves a design or manufacturing problem which a company wishes to address.

Although the term ‘crowdsourcing’ is a relative neologism, the act of crowdsourcing is not as avant-garde as one might presume. In the late nineteenth century, The Philological Society of London together with the lexicographer Sir James A H Murray, pooled on the collective knowledge, time and expertise of hundreds of volunteers to create the Oxford English Dictionary [3]. Over the course of decades the contributions and submissions of these volunteers, strangers who effectively worked collaboratively, were collated to become a complete collection of the definitions and origins of every word then used in the English language. Dell’s IdeaStorm, which Dell has used to improve and develop new products which better fit the needs of their customers, is an example which we will touch on in the following sections.

Crowdsourcing is not limited to software or computing-related business strategies. Procter & Gamble have successfully used submissions through its portal to canvass feedback and suggestions from its customers for new or improved products. The company view crowdsourcing as a method for increasing its external awareness of its customers’ needs which they have then distilled and successfully implemented as evidenced by a reported sixty percent (60%) increase in research and development productivity from which thirty-five percent (35%) of initiatives were generated externally [4].

Crowdsourcing as a marketing tool can be considered a two-way street; end-users get a product which they want and which fits their needs; businesses create a product that is profitable, with...

References: 1. Howe, Jeff (2006). Crowdsourcing: A Definition.;
3. Oxford University Press (2012). History of the Oxford English Dictionary.;
9. Hempel, Jesse (2006). Crowdsourcing: Milk the masses for inspiration. Bloomberg Businessweek.;
11. Sharma, Ankit (2010). Working Paper - Crowdsourcing Critical Success Factor Model Strategies to harness the collective intelligence of the crowd;
13. Vukovic, Maja (2009). Crowdsourcing for Entreprises IBM T.J. Watson Research;
15. Seybold, Patricia B. (2006). Outside Innovation: How Your Customers Will Co-Design Your Company’s Future, pages 355 -357, Harper Business;
17. Von Hippel, Eric (2005) Democratising Innovation, pages 45-57, The MIT Press;
19. Brand, Jason (2011). The Crowdsourcing Handbook – Everything you need to know about Crowdsourcing, page 4, Emereo Pty. Ltd.;
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