Virtual Customer Integration in New Product Development in Industrial Markets

This article was downloaded by: [Romanian Ministry Consortium]
On: 2 March 2010

Access details: Access Details: [subscription number 918910197]
Publisher Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-
41 Mortimer Street, London W1T 3JH, UK
Journal of Business To Business Marketing

Publication details, including instructions for authors and subscription information:
http://www.informaworld.com/smpp/title~content=t792303971
Virtual Customer Integration in New Product Development in Industrial

Markets: The QLL Framework
Andrea Hemetsberger a; Georg Godula b
a
School of Management, University of Innsbruck, Innsbruck, Austria b Business Development
Consultant, Bludenz, Austria
To cite this Article Hemetsberger, Andrea and Godula, Georg(2007) 'Virtual Customer Integration in New Product
Development in Industrial Markets: The QLL Framework', Journal of Business To Business Marketing, 14: 2, 1 — 40
To link to this Article: DOI: 10.1300/J033v14n02_01
URL: http://dx.doi.org/10.1300/J033v14n02_01
PLEASE SCROLL DOWN FOR ARTICLE
Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf

This article may be used for research, teaching and private study purposes. Any substantial or
systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or
distribution in any form to anyone is expressly forbidden.
The publisher does not give any warranty express or implied or make any representation that the contents
will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses
should be independently verified with primary sources. The publisher shall not be liable for any loss,
actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly
or indirectly in connection with or arising out of the use of this material.
Virtual Customer Integration
in New Product Development
in Industrial Markets:
The QLL Framework
Andrea Hemetsberger
Georg Godula
Downloaded By: [Romanian Ministry Consortium] At: 19:24 2 March 2010
ABSTRACT. Purpose. Customer integration in new product develop-

ment has become a main topic in business-to-business literature. Litera-
ture has brought forward a growing body of virtual customer integration
methods and tools. Yet, we lack a systematic evaluation of how and
when to make use of conventional and virtual methods, and on what
grounds. The purpose of this article is to provide a theoretically based
classification of customer integration methods and tools, and selection
criteria for industrial companies to find those most appropriate for their
own innovation purposes.
Methodology/Approach. In this article, we propose a new framework
of customer integration that is receptive to the explicitness and tacitness
of knowledge exchanged throughout the NPD process. We additionally
introduce a third, qualitative axis in the QLL framework that encom-
passes criteria for selecting methods that best serve the knowledge
Andrea Hemetsberger is Assistant Professor of Marketing, School of Management,

University of Innsbruck, Innsbruck, Austria.
Georg Godula is Business Development Consultant in Bludenz, Austria.
Address correspondence to: Andrea Hemetsberger, University of Innsbruck, School
of Management, Universitätsstraße 15, 6020 Innsbruck, Austria.
The authors would like to thank OMICRON electronics GmbH, Austria and Hyve
AG Germany for their cooperation, helpfulness, and their insightful comments regard-
ing their work.
Journal of Business-to-Business Marketing, Vol. 14(2) 2007
Available online at http://jbbm.haworthpress.com
© 2007 by The Haworth Press, Inc. All rights reserved.
doi:10.1300/J033v14n02_01 1
2 JOURNAL OF BUSINESS-TO-BUSINESS MARKETING
transfer requirements of a particular NPD project. With this framework

at hand, companies can find the most appropriate, individual selection of
customer integration methods for them. A practical example is provided
to illustrate the selection process.
Findings. Our classification shows that virtual customer integration
methods offer promising new tools for filling information gaps in the
most sensitive stages of design and product testing. For complex, tacit
knowledge exchange, close and face-to-face cooperation is more appro-
priate. Virtual methods appear more appropriate when visualization and
time is important. Conventional methods outperform virtual ones when
a shared understanding is vital.

Originality/Value/Contribution of the paper. The contribution of this
article is twofold. First, it contains a general classification of conventional
and virtual methods for customer integration according to their contribution
to the different forms of knowledge required throughout the stages of new
product development processes. Second, the article shows how the classifi-
cation framework can be applied in practice. doi:10.1300/J033v14n02_01
[Article copies available for a fee from The Haworth Document Delivery Ser-
vice: 1-800-HAWORTH. E-mail address: <docdelivery@haworthpress.com>
Website: <http://www.HaworthPress.com> © 2007 by The Haworth Press, Inc.
All rights reserved.]
KEYWORDS. New product development, customer integration, mar-

ket research, knowledge transfer
INTRODUCTION
In the business-to-business literature, there is ample evidence for

the outstanding importance of cooperation and close relational ties
with customers in new product development (Ganesan et al., 2005;
Nambisan, 2002; Cooper, 2001; Cannon and Perreault, 1999; Ciccantelli
and Magidson 1993; von Hippel, 1986). Customers’ needs and their
acquired expertise through the actual use of products make them an es-
sential resource and therefore valuable business partners to cooperate
with (von Hippel, 1986). In order to gain access to these resources,
methods for customer integration have been developed, for instance,
customer visits programs, the lead-user method (von Hippel, 1986) or
customer idealized design (Ciccantelli and Magidson, 1993), to name
just a few.
Andrea Hemetsberger and Georg Godula 3
New methods of virtual customer integration have added valuable

options for further intensifying cooperative relationships with custom-
ers. Virtual customer integration may help to considerably improve the
quality and depth of customer information and speed of knowledge
transfer at various stages of the innovation process. Virtual, in this con-
text, means that an “individual encounters synthesized experiences cre-
ated by computers and performed in such a way that the experiences to
some degree are experienced as real experiences by the user” (Ottosson,
2002). Methods of virtual customer integration also promise “a shift
from a perspective of exploiting customer knowledge by the firm to a
perspective of knowledge co-creation with customers” (Sawhney and

Prandelli, 2002, p. 31), adding a new perspective to value creation in
buyer-seller relationships (Lindgreen et al., 2006). Virtual customer in-
tegration, therefore, might add a valuable component to stability and
longevity of buyer-seller relationships, and contribute to improved
market-orientation of new product development (NPD) in industrial
businesses.
Recently, researchers have brought forward and tested a notable num-
ber of virtual customer integration tools (Paustian, 2001; Dahan and
Hauser, 2002a,b; Dahan et al., 2002). Yet, we lack a systematic evalua-
tion of how and when to use these methods, and on what grounds. Early
classifications (Kaulio, 1998) are based on the stages in the NPD pro-
cess and on the degree of customer involvement. Yet, the degree of cus-
tomer involvement is not necessarily related to new product creativity
and development speed (Ganesan et al., 2005). Literature in the field of
organization theory rather suggests that the success of such cooperative
efforts relies on the appropriate transformation of knowledge (see for
instance, Bechky, 2003). Therefore, we introduce a knowledge creation
perspective to customer integration in new product development.
The contribution of this article is twofold. First, we provide a frame-
work, which classifies methods of customer integration in NPD accord-
ing to the knowledge exchange requirements in different stages of the
NPD process. To this end, we will first review current methods and
tools of conventional and virtual customer integration. We will then de-
scribe the theoretical background of the framework’s axes and juxta-
pose virtual and conventional methods of customer integration in that
framework. Second, we introduce a qualitative axis, which captures se-
lection criteria for deciding on a portfolio of methods that best suit the
specific requirements of a particular industrial innovation project. We
will illustrate these qualitative criteria with a business case from the
high-tech electronic industry. Finally, we will discuss the main findings

and point out implications for future research.
CONVENTIONAL MARKET RESEARCH AND FORMS

OF CUSTOMER INTEGRATION
Over the years a rich toolbox has accumulated, which enables market
researchers to incorporate customer knowledge in new product develop-
ment. In the 1970s, the most prominent concepts were the Analytical Hi-
erarchy Process, Perceptual Mapping, the Delphi Method, and creative

group methods. In the 1980s, these concepts became standard compo-
nents in NPD, and new ideas and methods evolved. Concepts such as
pre-market forecasting and Conjoint Analysis, decision support systems,
and technology/marketing integration, for instance, Quality Function
Deployment, were introduced. Whereas the early developments concen-
trated on researching the market and incorporating expert knowledge,
new conceptualizations introduced partnering with customers. The Lead-
User Method started a new era of cooperative relationships in industrial
new product development (Herstatt and von Hippel, 1992). In the 1990s,
the most popular new developments were Empathic and Customer Ideal-
ized Design. In recent years, Mass Customization has become a hot topic.
It is increasingly used for individual adjustments to customer needs.
Table 1 provides a brief summary of relevant conventional and well-
established methods of integrating the customers’ voice in NPD.
AHP is a method well suited to explore explicit customer problems,
which are needed in the early stages of idea generation. Conjoint Analy-
sis builds on defined benefits and/or product features. Hence, it helps
with deciding on concrete product attributes and services in later stages
of the NPD process. Contextual Inquiry and Customer Idealized Design
integrate the customer far more intensely than other methods. Addition-
ally, they focus on uncovering customer needs and ideal products. Cus-
tomers are invited to produce their own creative ideas and bring their
tacitly held knowledge to the surface. The Delphi method is interesting,
insofar as it can be used to incorporate expert knowledge about custom-
ers in idea generation and project definition as well as expert customer’s
estimation of the future development in their industry. Focus groups can
serve several purposes from the generation of ideas to detailed product
features and prototype evaluation. It allows for in-depth exchange
of knowledge. The Lead-User Method has been conceptualized for
gaining in-depth knowledge and co-development of new products. It is
TABLE 1. Summary of Conventional Methods of Customer Integration in the

Literature
Method Description Literature

Analytical hierarchy AHP is a decision-making Saaty, T.L. (1980), The
process tool for complex, multi- Analytic Hierarchy Process,
criteria problems where both New York, McGraw-Hill.
qualitative and quantitative
aspects of a problem are
incorporated. AHP clusters
elements according to their
common characteristics into
a hierarchical structure
similar to a family tree

or affinity chart.
Conjoint analysis A quantitative market Green, P.E. and V. Srinivasan
research technique that (1990), “Conjoint Analysis in
determines how consumers Marketing: New Developments
make trade-offs between with Implications for Research
a small number of different and Practice,”
features or benefits. Journal of Marketing, 54, 4,
3-19.
Contextual inquiry/ Structured qualitative market Beyer, H. and K. Holtzblatt,
Empathic design research methods, using a (1997), Contextual Design:
combination of techniques A Customer-Centered
from anthropology and Approach to Systems
journalism. Contextual Designs, Morgan
inquiry is a customer Kaufman Publishers.
needs discovery process
that observes and Leonard, D. and Rayport, F.F.,
interviews users in their (1997), “Spark Innovation
actual environment. Similarly, Through Empathic
Empathic Design represents Design,” Harvard Business
a 5-step method for Review, 102.
uncovering customer needs
and ideas for new concepts.
Customer idealized Customer design involves Ciccantelli S. and Jason
design actual or potential customers Magidson (1993), “From Expe-
in an unconstrained rience: Consumer Idealized
designing process of their Design: Involving Consumers
ideal product or service. in the Product Development
Participants are told not Process,” Journal of Product In-
to be concerned with the novation Management, 10, 4,
feasibility of the designs 341-347.
they create, only with their
desirability.
Delphi method A technique that uses Chakravarti, A.K., B. Vasanta,
iterative rounds of A.S.A. Krishnan and
consensus development R.K. Dubash (1998), “Modified
across a group of experts Delphi Methodology for Tech-
to arrive at a forecast of nology Forecasting: Case Study
the most probable of Electronics and Information
outcome for some Technology,” Technological
future state. Forecasting & Social Change,
58, 1-2, 155-166.
TABLE 1 (continued)
Method Description Literature

Focus group A well-known qualitative market research technique where
approximately 8 to 12 market participants discuss under the leader-
ship of a trained moderator. The discussion focuses on a customer
problem, product, or potential solution to a problem.
Lead user method Especially sophisticated Von Hippel, E. (1986), “Lead
users are selected and Users: A Source of Novel Prod-
drawn into a process of uct Concepts,” Management
joint development of new Science, 32, July 7, 791-805.

products with manufacturer
personnel.
Mass customization Tailored Customization/ Svensson, C. and A. Barfod
Customized Standardization/ (2002), “Limits and Opportuni-
Segmented Standardization. ties in Mass Customization
Delivering goods and for ‘Build to Order’ SMEs,”
services that meet individual Computers in Industry, 49, 1,
customers’ needs with mass 77-89.
production efficiency.
Helander, M.G. and J. Jiao
(2002), “Research on e-
Product Development (ePD) for
Mass Customization,”
Technovation, 22, 717-724.
Perceptual A quantitative market Arabie, P. and J.D. Carroll
mapping/MDS research tool used to (1998), “A Perceptual Mapping
understand how customers Procedure for the Analysis of
think of current and future Proximity Data to Determine
products. Perceptual maps Common and Unique Prod-
are multi-dimensionally uct-Market Structures,”
scaled (MDS), visual European Journal of
representations of Operational Research,
the perceived relative 11, 1, 268-284.
position in the minds of the
customers.
SITI/SOPI/CIT Sequential Incident Tech- Decker, A. and M. Meissner
nique/Sequence Oriented (1999), “The Sequential Inci-
Problem Identification are dent Technique for Innovations
methods for generating (SITI),” in P. Kunst,
improvements and ideas J. Lemmink and B. Stauss
in (services) processes (eds.): Service Quality and
based on the critical Management, Wiesbaden,
incidents technique (CIT) 187-226.
Botschen, G., L. Bstieler and
A.G. Woodside (1996),
“Sequence Oriented Problem
Identification Within Service
Encounters,” Journal of
Euromarketing, 5, 2, 19-52.
probably the most intense form of customer integration with expert cus-
tomers. With Mass Customization, customers can be integrated in very
late stages of the NPD process and beyond. Perceptual Mapping is a
market research tool and delivers information about the perceived
relative position of competing brands. It is useful for the detection of
“empty cells” for innovation. Finally, Sequential Incidents and Critical
Incidents Techniques bring extremely satisfying and extremely dissat-
isfying incidents to the surface. These incidents are the most critical
indicators of customer problems, but also differentiate services. They
provide valuable input for idea generation and problem solving in
industrial services.
VIRTUAL CUSTOMER INTEGRATION METHODS

AND TOOLS
The emerging new methods of Virtual Customer Integration, predomi-

nantly researched at the MIT Sloan School (Dahan and Hauser, 2002b),
promise to complement many conventional market research tools. The
following sections will introduce these techniques in more detail.
Listening in
“Listening in” was introduced by Urban and Hauser (2003) as a new, in-
direct method of detecting unmet customer needs by observing customer
interactions with an Internet-based sales recommendation system. Lis-
tening in provides a virtual tool to address previously unarticulated and
unidentified customer needs. Manufacturers can gather new ideas for
new products by observing Web-based dialogues between customers
and virtual advisors (Figure 1). The virtual advisor attempts to identify
the ideal new product of the customer by asking a series of questions.
The goal of each virtual advisor is to provide information on product
features and options.
The virtual advisors can be updated regularly to include new products
and new customer needs, providing evolving data with which to identify
new unmet needs as soon as customers express them. The virtual advisor
uses a Bayesian algorithm to select the best recommendations for each cus-
tomer. The recommendations and questions of the virtual advisor produce
utility functions. First, internal validity checks show satisfactory results
(Urban and Hauser, 2003). As utility drops with the next recommendation
of the virtual advisor, a so-called virtual engineer is triggered.
FIGURE 1. Listening In: The Virtual Engineer in Action. Source: Urban, Glenn L.
and John R. Hauser, 2003, Figure 4, p. 81 and Figure 5, p. 82. Reprinted with
permission from Journal of Marketing, 68, April, published by the American Mar-
keting Association.
The virtual engineer is used to probe these customer needs so that

a product-development team can better understand the nature of the
needs and gather the information that is critical for design decisions.
Closed-and open-ended questions are asked to get in-depth information
about possible new features. To explore the unmet needs further, a de-
sign palette enables the customer to express their own solutions.
Virtual Brainstorming
With Virtual Brainstorming (VB), a system also referred to as “Web-

based Asynchronous Ideation,” Toubia et al. (2004) promise to overcome
many drawbacks of conventional methods such as travel time and cost
constraints of participants, low energy levels or lack of creativity and
“free-riding” problems (see Figure 2). With this method, customers, ex-
ternal partners, and internal development team members are invited to
participate in an idea generation exercise in which the incentives are
fine-tuned to encourage participants to think hard and generate ideas
that are new and relevant. The system turns brainstorming into an online
game where “players” are rewarded not for their own contribution, but
for their impact on the others’ contributions. The participants who do well
are those, whose ideas inspire the group and provide a foundation for sub-
sequent creativity. Hence, participants get incentive points for their con-
tribution to the creative process as a whole. The VB software organizes
FIGURE 2. Screenshot of a Virtual Brainstorming Output, Source: http://www.

mindjet.com, accessed January 2006. Used with permission.
the ideas into a tree, similar to a mind map, and provides an easy to use in-
terface that prompts participants to begin their contributions with phrases
like “more precisely,” “on the other hand,” or “instead,” After completion
within a few business days the results read like a conversation.
The VB system has been tested twice so far in a commercial setting.
In both cases the participants felt good about the incentive system and
provided many creative solutions to important business problems.
Information Pump
Similar to Virtual Brainstorming, the Information Pump (IP) is a Web-

based interactive game with fine-tuned incentives, however, with spe-
cial focus on truth telling (see Figure 3). It “pumps” information from
customers about their true needs or perceptions of new concepts and
shows how they describe their impressions (Dahan and Hauser, 2002b).
FIGURE 3. User Interface for the Information Pump. Source: Dahan, Ely and
John R. Hauser, 2002a, Figure 16, p. F17. Used with permission.
The incentives of this “online focus group” are based on “honest

reward” and game theory, which encourage both truth telling and cre-
ativity and overcome problems faced in conventional focus groups
(Prelec, 2001).
The Information Pump “game” is fairly simple: Players take on differ-
ent “roles” and take turns making true or false statements about a product
concept and guessing whether the statements made by other players are
true or false. The statements posed by the “declarer” can include refer-
ences to every aspect of the product–its physical characteristics, how the
product would work, who would use the product, whom it would appeal
to, when it might be used, or what product it could replace. One player has
a special role. The “detective” does not get to see the product, but he can
read the statements and the true or false answers of the other players. His
task is to use the information from the previous statements and their an-
swers to guess whether the current declarers’ statement is true or false.
Declarers score points by making statements that the detective cannot

guess, but which the other players who can see the product answer cor-
rectly. The scoring system rewards truthfulness and creativity–trying to
mislead the other players does not help. Working hard to come up with a
unique statement that pumps really new information into the game is
worth a lot. One huge benefit is that the market researcher or product
manager themselves can actually be a game participant. This gives mar-
keters a personal, first-hand experience with the way their customers re-
act to and interpret their product ideas (Klein, 2001).
Web-Based Conjoint Analysis
Conjoint analysis is the most widely used method to understand cus-

tomer trade-offs among product feature expectations (Paustian, 2001).
Interactive Web-based Conjoint Analysis (WCA) interfaces are moving
the existing set of conjoint methods to the Web while exploiting new
capabilities to present products, features, product use, and marketing
elements in streaming multimedia representations (Dahan and Hauser,
2002b). Because industrial products are typically complex and com-
prise many features, product development teams require preference
measurement methods that can handle more customer needs and pro-
vide prioritizations among substantially more features (Dahan et al.,
2002). The new Web-based interfaces rely on proven estimation meth-
ods while bringing exactly those advanced conceptualizations to virtual
features so that they might be tested earlier in the process and with
greater speed (Dahan and Hauser, 2002b). By exploiting new com-
putational algorithms to select questions rapidly, the FastPace (FP) tool
gathers a considerable amount of information on preferences, using far
fewer questions than existing methods, like fixed (Web-based or conven-
tional) conjoint measurement. However, even with adaptive methods, the
number of parameters that can be estimated is limited by respondent fa-
tigue. This limits the number of features that can be tested. A possible
way out of this research dilemma is offered by the user design method.
User Design
User Design (UD) exploits the interactivity of modern information

technology to enable users to design their own virtual products and thus
provide the means for development teams to understand numerous and
complex feature interactions and enable customers to learn their own
preferences for new products (Dahan and Hauser, 2002a). As these
choices are made (see Figure 4), trade-offs such as price and perfor-
mance are constantly visible and updated. Hence, the respondent can in-
teractively learn his preferences and reconfigure the design until an
“ideal” configuration is identified. The method includes full configura-
tion logic, meaning that only feasible designs can be generated.
User design sacrifices the generality of conjoint-based methods to
handle more features that might possibly interact. Because UD gathers
only the ideal feature combination for each respondent, it does not have
Web-based and fast-paced conjoint analysis abilities to simulate how
respondents will react to any feature combination. However, User De-
sign can be used complementarily, to determine which features are most

desired, which features interact, and which feature combinations are
viewed as ideal by customers. In addition, the interface is enjoyable and
engaging to the respondent and relatively easy to implement.
The data can then be used to narrow the set of features and later in the
process form the basis of a more extensive research such as in conjoint
analysis. On the other hand, User Design is particularly suited to prod-
ucts where the features heavily interact and thereby offers a substitute
where a conjoint-analysis application would need a large, complex
FIGURE 4. Virtual User Design for an Electronic Tester Device, Own Source
experimental design to estimate the interactions. Finally, UD is also

suited to instances where customers need to learn their own preferences
for really new products. Nevertheless, one should keep in mind that ini-
tial feature levels presented to customers as defaults could influence
(future) measures of customer interest in those features (Dahan and
Hauser, 2002b).
Virtual Concept Testing
Not all industrial products or services can be completely broken

down into features. For example, while the Web-based Conjoint Analy-
sis is useful to gain an understanding of how customers value features,
these features will not be able to fully describe a product. Because holistic
descriptions are critical to ultimate customer and buying-center pur-
chase decisions, product development teams often need to move beyond
feature-based methods, especially later in the product development
process (Dahan and Hauser, 2002a). Accordingly, in Virtual Concept
Testing (VCT), respondents view new product concepts and express
their preferences by “buying” their most preferred concepts at varying
prices (see Figure 5). These choices are converted into preferences for
each concept by methods similar to conjoint analysis in which the
rank-order selections are explained with the two variables, price and
concept, as described in Dahan and Srinivasan (2000). Rather than wait-
ing for physical prototypes, product-development teams can use this
approach to test virtual prototypes quickly with customers around the
world using media-rich presentation (Paustian, 2001).
VCT enables the development team to get rapid and inexpensive
feedback on the product that include descriptions of the product and its
features, illustrations of the product in use, and marketing elements
such as brochures, magazine articles, advertisements, and simulated
word of mouth.
Toolkits
Finally, with Toolkits, manufacturers actually abandon their efforts

to understand users’ needs accurately and in full detail. Instead, they
outsource key need-related innovation tasks to the users themselves
after equipping them with appropriate virtual “toolkits for user innova-
tion” (see Figure 6) to design and develop their own products, ranging
FIGURE 5. Virtual Concept Test of Crossover Vehicles. Source: Dahan, Ely

and John R. Hauser, 2002a, Figure 12, p. F13. Used with permission.
from minor modifications to major new innovations (Thomke and von

Hippel, 2002).
This radical concept was developed in order to overcome the prob-
lem of “sticky information” (von Hippel and Katz, 2002). The sticki-
ness of a given unit of information in a given instance is defined “as the
incremental expenditure required to transfer it to a specified locus in a
form useable by a given information seeker” (von Hippel, 1994, p. 430).
The sticky information concept is similar to tacit knowledge with regard
to the difficulty in transferring of knowledge. Toolkits help translate
knowledge which would be difficult to obtain other than by working to-
gether face to face. Hence, user toolkits for innovation are designed to
support transfer of tacit knowledge similar to the user design method
but in a much more sophisticated way. Computer simulation, for exam-
ple, allows customers to quickly try out ideas and design alternatives
without having to manufacture the actual products. They contain librar-
ies of useful pre-tested components and modules. These save customers
from having to reinvent the wheel. Instead, users can focus their efforts
FIGURE 6. Toolkit Configurator for Motif Design, Source: http://www.hyve-

special.de/gems/configuration/demo.html, accessed January 2006. Used with
permission.
on the truly novel elements of their design. Toolkits must also provide
information about the capabilities and limitations of the manufacturing
process to ensure that a customer’s design is in fact producible. Busi-
ness-to-business customers are particularly suited to working with these
tools as they tend to be experts in their technical field (Thomke and von
Hippel, 2002; Franke and Piller, 2004). Toolkits require some program-
ming effort before use. The same is true for almost all of the virtual cus-
tomer integration methods and tools. They also require a certain level of
involvement and commitment between business partners. Therefore,
the selection of methods should be based on solid grounds. In the fol-
lowing, we discuss important factors that influence the selection of
customer integration methods and tools, and provide a general classifi-
cation based on knowledge requirements in different stages of the NPD
process.
QLL: A NEW FRAMEWORK

FOR CUSTOMER INTEGRATION
IN NEW PRODUCT DEVELOPMENT
Recently, Kaulio (1998) introduced a noteworthy analytical framework

for classifying approaches dealing with customer and user integration in
product development, using two dimensions of process integration: the
longitudinal and the lateral. By modifying and completing Kaulio’s
framework and adding a third, qualitative axis, we introduce a deriva-
tive approach, labeled The QLL Framework, wherein Q stands for
qualitative, and LL for lateral and longitudinal. The qualitative axis ac-
counts for the company prerequisites and requirements of a particular
NPD project. The longitudinal and the lateral axes provide general crite-
ria for classifying methods and tools of customer integration, and are in-
troduced first. As depicted in Figure 7, we classified conventional and
virtual methods of customer integration according to their appropriate-
ness for particular stages of the NPD process, and their contribution to
knowledge exchange between customers and manufacturers.
The Longitudinal Axis
The longitudinal dimension represents the phases of an NPD process.

In order to describe this dimension the different stages of the industrial
Stage-Gate Process as proposed by Cooper (Cooper, 2001) are used,
adding “Ideation & Specification” at the front end and “Assembly” and
“Distribution” at the back end. Former conceptualizations did not con-
sider the ideation stage for cooperation. However, ideas are everywhere
and they often lie fallow. Hence, in line with recent arguments of
Cooper et al. (2002), we argue that leaving out the ideation stage means
leaving out valuable ideas and relevant problems that customers have.
Similarly, later phases which follow the market launch have a huge
potential for first customer feedback, which enables the company to
quickly react to improvement requirements.
In the course of the NPD process, different kinds of customer informa-
tion and knowledge gain in importance. As depicted in Figure 7, different
stages require different methods. The ideation stage is characterized by
the search for winning ideas. Depending on the aim of the project, the
NPD team searches for problems yet to be solved, suggestions for im-
provements, and breakthrough ideas. Hence, various surveys and brain-
storming methods, and also problem-detecting methods, provide valuable
FIGURE 7. Classification of Customer Integration Methods Along the Longitudinal and Lateral Axes
Lateral dimension
(knowledge exchange)
Co-Development, Communities of Practice & Co-Production
Level 3 Participative Observation
Lead-User Method
Externalize shared Joint Field-
tacit knowledge Testing
Rapid Prototyping Prototyping
Tool Kits
Level 2 Test Market / Limited roll-out
Beta-Testing
Contextual Inquiry / Empathic Design
Support customer to Virtual User Design
externalize tacit Virtual Concept Testing
knowledge & Tailored Customization
internalize explicit Customized Standardization
knowledge Segmented
Standardization
SITI/SOPI Method
Delphi Method (DM)
Level 1
Listening In Listening In
Focus Groups Focus Group -
prototype testing
Information Pump
Fast paced adaptive Conjoint Analysis
Share explicit (Web-based) Conjoint Analysis
knowledge Conjoint Analysis (CA)
Perceptual Mapping / MDS PM/MDS
Analytical Hierarchy Process
Personal Survey
Personal, Telephone & Mail
Telephone Survey
Surveys
Mail Survey
1 2 3 4 5
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Ideation & Preliminary
Market Launch Assembly Distribution
Specification Investigation, Idea Detailed Investigation Testing &
Development & Full
Screening & & Design Validation
Production
Conception
Longitudinal dimension (process

stage of customer integration)
17
information at this preliminary stage of new product development. Stage

one is a relatively inexpensive stage, which necessitates preliminary in-
vestigation of the market potential of different ideas. At this stage, key
users are an important information source (Cooper, 2001). Quick con-
cept tests, focus groups, and simple surveys are appropriate methods for
a first scan regarding likely market acceptance. But also the Lead-User
Method, customer visits, and more intense cooperation might be appro-
priate, depending on the particular project in question and its respective
knowledge requirements. Perceptual Mapping (Arabie and Carroll,
1998) represents a quantitative market research tool used to understand
how customers think of current and future products in the early stages of
product development. The Delphi Method (Chakravarti et al., 1998)
adds a valuable opportunity to incorporate the opinion of experts in the
very first phases of an NPD project. Apart from the wide array of
conventional methods offered for the first stage in the NPD process,
conventional methods nevertheless are limited to verbal or written
interaction to identify customer needs and screen early ideas. However,
particularly in those stages where creativity is vital for the innova-
tiveness of the solution, stimulating tools and visualizations could in-
crease creativity. Virtual integration methods, like Listening In, Virtual
Brainstorming, the Information Pump, and FastPaced Adaptive Con-
joint Analysis offer feasible complementary benefits to conventional
methods during the preliminary investigation stage.
Stage two is characterized by much more in-depth information re-
quirements. Herein, the potential product is defined, including a target
market definition, delineating the product concept and its most promis-
ing positioning strategy (Cooper, 2001). At this stage the decision is
made whether or not to invest in product development. Hence, the need
for in-depth customer knowledge rises considerably. Apart from more
intense forms of surveys, various forms of conjoint analysis (Green and
Srinivasan, 1990; Dahan and Hauser, 2002a) prove to be capable tools
for design decisions and explicitly testing and validating advanced
product concepts. FastPaced Adaptive and Web-based Conjoint Analy-
sis constitute interesting alternatives to conventional methods. Particu-
larly with regard to the speed of data collection and cost-saving aspects,
these methods should dominate conventional Conjoint Analysis, pro-
vided that the necessary computer literacy and IT hardware exists
among the survey population. Also the development and the testing and
validation stages, wherein prototypes are constructed and continual im-
provements are made, conjoint-based methods, Virtual Concept Test-
ing and Toolkits seem promising new methods. In industrial design and
product development, prototypes tend to be very costly, thus virtual

methods and tools can radically improve the efficiency of NPD in in-
dustrial businesses. In post-development and market launch stages
Mass Customization Methods (Lampel and Mintzberg, 1996) such as
Tailored Customization, Customized Standardization, or Segmented
Standardization, which enable “delivering goods and services that meet
individual customers’ needs with mass production efficiency” (Tseng
and Jiao, 2001), may be applied in industrial markets with heteroge-
neous needs. To conclude, the applicability of the methods and tools
introduced varies considerably with the knowledge requirements in the
different stages in new product development.

The Lateral Axis
According to Kaulio (1998), the lateral axis captures how deeply cus-
tomers are engaged in the design process. This refers to the role the cus-
tomers take when they interact with the design process and to what
degree or with what intensity customers partake in design work. In or-
der to describe this dimension, Kaulio uses the categories “design for,”
“design with,” and “design by.” These distinctions come close to the
roles customers can take in NPD as described by Nambisan (2002),
“customer as resource,” “customer as co-creator,” and “customer as
user.” Kaulio’s (1998) definition narrows customer integration to mere
designing. Additionally, both classifications seem inappropriate and
tautological. We argue that the intensity of customer integration desired
should not determine the selection of customer integration methods, but
rather the kind and depth of knowledge needed in the stages of the NPD
process. We, therefore, adopt a knowledge creation perspective of
customer integration in new product development.
Nonaka’s (1994) theory of organizational knowledge creation offers
a valuable alternative to Kaulio’s (1989) lateral axis of customer in-
volvement. Nonaka (1994) distinguishes two types of knowledge–tacit
knowledge and explicit knowledge. Explicit or codified knowledge re-
fers to knowledge that is transmittable in formal, systematic language
such as words and numbers. The average number of service hours for a
particular machine would be an example for explicit knowledge. Tacit
knowledge (Polanyi, 1966) on the other hand has a personal quality,
which makes it hard to formalize and communicate. Tacit knowledge is
deeply rooted in action, commitment and involvement in a specific con-
text. Knowing how to design a lightweight case for a laptop, for in-
stance, implies knowledge which cannot be expressed in numbers or
figures. Instead, other, more sophisticated methods have to be used in

order to uncover such tacit forms of knowledge. This process of making
tacit knowledge explicit and comprehensible by others has been labeled
“externalization” (Nonaka, 1994).
With the lateral axis of our framework we recognize that customer in-
tegration constitutes an exchange of knowledge which necessitates a
common understanding. Hence, knowledge has to be transferred in both
directions aiming at creating a “shared mental map” (Kraiger and
Wenzel, 1997). For example, in order to test a product concept with
customers and retrieve their opinions and evaluations, a manufacturer
will first have to describe their new product concept. By using verbal
description, pencil sketches, a virtual 3D model or something similar,
this manufacturer-induced knowledge transfer represents the basis for
further interaction. Other stages might be less complicated and simply
require the exchange of explicit knowledge. Nonaka et al. (1998) pre-
sent three levels of utilizing customer knowledge. With a slight modifi-
cation, we will use this classification in order to describe the lateral
dimension of customer integration in NPD:
• Level 1 describes methods for sharing explicit knowledge, for ex-

ample when asking for product preferences, number of intended
repurchases, etc. The exchange of knowledge is limited to explicit
information articulated in words or numbers.
• Level 2 describes techniques or instruments that support custom-
ers to externalize their tacit knowledge, by providing a way to help
articulate and express their deeply rooted procedural knowledge
and experiences. This might be implemented by, for instance, ob-
serving the customer using a product and interviewing him about
how he used it. On the other hand, Level 2 also describes ways to
help customers internalize explicit knowledge by, for instance
making them fully understand the advantages and the usability of
new product concepts by, for example, exposing them to interac-
tive product prototypes.
• Level 3 finally denotes customer/manufacturer interactions in which
shared tacit knowledge is externalized (by both parties). For exam-
ple, after having spent two days in a work-intensive Lead-User or
participant observation session, both customer and manufacturer
will have learned and/or designed new product ideas, features and
product usage, and will both be able to articulate the results and ex-
periences when returning back to their companies.
Figure 7 exhibits the ways in which conventional and virtual cus-

tomer integration methods and tools differ in their appropriateness for
specific knowledge transfer needs during the NPD stages. The pool of
methods which enable customers to contribute explicit knowledge at
various stages of the NPD process is rich and varied, except for the
post-development stages. For assembling and distribution, Listening
In provides a new and interesting method for getting initial market feed-
back. This feedback enables the manufacturer to fine-tune its market
offer very soon after market entry. Interestingly, except for the SITI/
SOPI Method, Contextual Inquiry, or Empathic Design in early stages
and Mass-Customization Methods, Test Markets, and Beta-testing in

later stages, no method has been developed yet to support customers
with externalizing tacit knowledge (Level 2) in the stages of “Detailed
Investigation & Design” and “Development.” As shown in Figure 7,
Toolkits, User Design and Virtual Concept Testing represent promising
new methods for filling this gap in supporting customers to externalize
tacit knowledge at those stages. As for Level 3 of the proposed frame-
work, another, much more sophisticated, methodology is needed such
as the integration of lead users into product development offline or
in-depth analysis of online communities of practice (Wenger, 1998;
Brown and Duguid, 1991) where experts meet and engage in extensive
discourse.
Virtual methods seem more appropriate when visualization and time
is important; however conventional methods outperform virtual ones
when a shared understanding is vital. Solely participative observation
and the Lead-User Method (von Hippel, 2001) form a cluster of meth-
ods for externalizing and sharing tacit knowledge in the early stages of
“Ideation & Specification,” “Preliminary Investigation, Idea Screening &
Conception,” and “Detailed Investigation & Design.” Co-Development,
Rapid Prototyping, and Joint Field-Testing can be regarded as methods
for externalizing and sharing tacit knowledge in the later stages of the
NPD process. Although a co-development approach seems highly ap-
pealing in terms of the quality and depth of knowledge exchanged, it also
appears to be much less manageable and constitutes a rather time-
consuming process. The decision whether or not to engage in a more
or less cooperative form of customer integration is not self-evident
and cannot be answered in general terms. In the following section, we
propose and elaborate general criteria that influence the selection of
methods.
The Qualitative Axis: Evaluation Criteria

for Method Selection
The lateral and the longitudinal axes provide a valuable frame for
classifying methods of customer integration in general. When compa-
nies engage in new product development, they can now select from a
number of opportunities to incorporate customer knowledge into their
NPD process. In order to help select an appropriate portfolio of methods
for a particular NPD project, we additionally introduce a third, qualitative
axis to the framework (see Figure 8). The qualitative axis symbolizes the
necessity to make an informed choice of methods for a particular NPD

project. Choice of methods will vary depending on the organizational
constraints in the developing company, the innovation strategy, and on
the exact purpose of the project. If, for instance, an industrial niche sup-
plier and innovation leader engages in the development of a break-
through innovation, the upfront activities in the ideation stage will
require much more creativity and expert research. Hence, methods of
customer integration which encourage and give room to creativity
should be selected. In the case of product improvements, problem de-
tecting methods seem much more appropriate, less time-consuming and
less costly. As each new product development project is different, we
need criteria which help in selecting the most appropriate method for a
particular NPD project in industrial companies.
Partially based on the work and the arguments of Engelhardt and
Freiling (1995), Cannon and Perrealult (1999), Ganesan et al. (1999),
and Rosen et al. (1999) we propose five general qualitative selection
criteria, which are critical in an industrial context. They include (1) the
nature of knowledge transfer, (2) the interference of knowledge trans-
fer, (3) the feasibility/cost of knowledge transfer, (4) the speed of
knowledge transfer, and (5) the confidentiality of knowledge transfer.
Depending on the particularities of an NPD project, the importance of
these criteria might vary.
In addition to different levels of knowledge as depicted in the lateral
axis of the framework, industrial companies also have specific require-
ments with respect to the nature of knowledge to be transferred. Organi-
zational learning theorists have referred to the level and nature of
knowledge as form and content of knowledge (Ganesan et al., 1999;
Kogut and Zander, 1992). While forms of knowledge are defined at the
lateral axis of our framework, contents of knowledge largely determine
the nature of knowledge transfer. An important dimension of knowl-
edge that affects its ease of transfer is complexity. Complex knowledge
FIGURE 8. The QLL Framework for Customer Integration Methods in NPD, Based on Kaulio (1998), Nonaka et al.
(1998), and Cooper (2001)
Lateral dimension
(knowledge exchange)
Co-Development, Communities of Practice & Co-Production
Level 3 Participative Observation
Lead-User Method
Externalize shared Joint Field-
tacit knowledge Testing
Rapid Prototyping Prototyping
Tool Kits
Level 2 Test Market / Limited roll-out
Beta-Testing
Contextual Inqulry / Expathic Design
Support customer to Virtual User Design
externalize explicit Virtual Concept Testing
knowledge & Tallored Customization
Internalize explicit Qualitative axis Customized Standardization
knowledge (evaluation criteria for the Segmented
selection of the most appropriate Standardization
SITI/SOPI Method method or tool)
Delphi Method (DM)
Level 1
Listening in Listening In
Focus Groups Focus Group-
prototype testing
Information Pump
Past paced adaptive Conjoint Analysis
Share explicit (Web-based) Conjoint Analysis
knowledge Conjoint Analysis (CA)
Percentual Mapping / MDS PM/MDS
Analytical Hierarchy Process
Personal Survey
Personal, Telephone & Mail
Telephone Survey Surveys
Mail Survey
1 2 3 4 5
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Ideation & Preliminary
Market Launch Assembly Distribution
Specification Investigation, Idea Detailed Investigation Testing &
Screening & Development & Full
& Design Validation Production
Conception
23
Longitudinal dimension (process
stage of customer integration)
is more critical in NPD cooperation and more difficult to transfer

(Kogut and Zander, 1992). High-tech products are more complicated,
knowledge transfer is more complex (Rosen et al., 1999). Therefore,
for certain purposes, such as concept testing, customer integration only
makes sense for a longer period of time (Engelhardt and Freiling, 1995).
Hence, customer integration in a high-tech industrial context requires
methods which are able to handle complexity. Yet the nature of knowl-
edge to be exchanged depends on whether an innovation project is tar-
geted towards a breakthrough innovation, or product modifications.
Further criteria deriving from the contents of knowledge sought after
are, for instance, the ability to transfer information in different modes.

As information comprises facts and symbols (Kogut and Zander, 1992),
its transfer requires not only verbal, but also visual and other modes of
transfer. The criteria that refer to the quantity of knowledge, the dura-
tion and intervals of knowledge transfer, and the “response rate” of
customers complete the list of criteria with regard to the nature of
knowledge transfer.
A second cluster of selection criteria is firmly rooted in the market re-
search literature. The interference of knowledge transfer mainly refers to
controlling for measurement errors, such as who provides information
or answers a questionnaire. In industrial businesses where decisions
often are made by a buying center, those requirements become particu-
larly vital for data validity and reliability. Furthermore, data collection
methods and tools must meet general criteria for market research, for in-
stance, avoiding potential interviewer bias. Depending on the particular
target group of product innovations or improvements, methods have to
be selected, which are targeted to those, who are in charge of the buying
decision for the product being developed. Hence, this second class
of selection criteria is, of course, also general in nature, but varies in
importance depending on the project and the cooperation partners
involved.
A key part of the customer integration decision is the cost of integra-
tion as compared with the cost of in-house “production” (Buckley and
Chapman, 1998). Ideally, costs should equal opportunity costs, given
that customer integration provides the best solution with regard to NPD
output. The feasibility/cost dimension of knowledge transfer, for in-
stance, might comprise requirements such as the monetary costs of
implementation of customer integration, or the applicability in an inter-
national context. This could be of immense importance particularly for
firms with a global customer base. Although seemingly objective, the
estimation of opportunity costs is highly subjective and goal-dependent.
Weighting its importance helps uncover the hidden subjectivity of the

costs criterion and forces management to think about the strategic
importance of a project.
Speed of knowledge transfer not only refers to the time needed for
data generation but also for the development of adjusted tools, coding,
and analysis. Researchers have argued that, particularly in high-tech
markets, time to market enhances a company’s image as an innovation
leader (Smith and Andrews, 1995). Hence, just as being among the first
to market is important in industrial markets, so is the speed of knowl-
edge transfer. However, research also provides empirical evidence that
it is the firm’s resources and skills that matter most and not being a tech-
nological pioneer (Ali, Krapfel, and LaBahn, 1995). Therefore, a com-
pany’s innovation strategy has to be taken into account and a careful
trade-off must be made between quality and depth of knowledge transfer,
and speed of knowledge transfer.
Confidentiality of know-how, skills, and resources is a final class of
selection criteria, which is often discussed in business practice and is
frequently reported in the literature. As Cannon and Perreault (1999)
maintain, greater sharing of information increases product quality and
can facilitate new product development. However, it might also lead to
opportunistic behavior on the side of the other party, particularly when
the quality of the relationship is low. Therefore, knowledge transfer has
been an issue in high-tech industrial enterprises, in which NDP pro-
cesses regularly end up with new patents. The selected portfolio of
methods of customer integration, therefore, should not interfere with
confidentiality requirements and guarantee a sustainable competitive
advantage. Yet it might vary in importance, depending on the strategic
importance of the NPD project in question.
APPLYING THE QLL FRAMEWORK IN PRACTICE:

THE CASE OF A NICHE SUPPLIER
IN THE ELECTRONIC INDUSTRY
Depending on the particular internal and environmental context within

which an industrial manufacturer operates, further specification of qual-
itative criteria is necessary in order to be able to select relevant methods
and tools of customer integration. We argue here that the selection of
methods not only depends on the stage of the NPD process and on
knowledge requirements, but also on the qualitative criteria derived
from the literature as depicted in Table 2. The relative importance of
26
TABLE 2. Qualifying Virtual Customer Integration Methods: The Case of a Niche Supplier of Testing Units for Power
Plants
3 = High Information Listening Tool User Virtual Virtual Web- Fast-Paced Impor-
2 = Medium Pump In Kits Design Brain- Concept Based Adaptive tance
storming Testing Conjoint Conjoint Weight
1 = Weak or Low Analysis Analysis
Blank = Not Applicable IP LI TK UD VB VCT WCA FP ACA %
Nature of knowledge transfer
Ability to handle complexity 2 2 3 3 1 2 1 1
Ability to use visual stimuli 3 3 3 3 2 3 3 3
Ability to use verbal stimuli 1 1 2 2 2
Flexibility/Interactivity of data 2 3 3 3 3 1 2
collection
Possible intervals of integration 1 3 2 2 1 1 1 1
Duration of integration 2 2 3 2 2 2 1 1
Quantity of knowledge transfer 1 3 2 3 1 3 3 3
Weighed 4.8 6.4 6.8 7.2 4.8 5.6 3.6 4.4 40
Knowledge interference
Probable response rate 2 3 2 2 2 2 2
Control of interviewer effects 1 2 3 3 2 3 3 3
Control of the data collection 3
environment
Control over who responses 3 1 2 2 2 2 2
Weighed 0.9 0.5 0.4 0.7 0.6 0.7 0.7 0.7 10
Feasibility/Costs
Monetary cost ⫺2 ⫺3 ⫺3 ⫺2 ⫺2 ⫺2 ⫺2 ⫺2
Necessity of (extrinsic) incentives ⫺2 ⫺1 ⫺2 ⫺3 ⫺3 ⫺3
Practicability for marketing 1 1 3 2 3 2 2
processes
Internal feasibility (know-how, 1 1 2 2 2 1 1
software, etc.)
Support of internal knowledge 1 2 2 1
diffusion
Applicability for concentrated 3 1 1 1 1
contact points
Applicability for dispersed contact 3 3 3 3 3 3 3
points
Requirements towards exchange ⫺1 ⫺2 ⫺3 ⫺2 ⫺1 ⫺2 ⫺2 ⫺2
partner
Synergy effects with other 2 2 3 3 2 3 3 3
business projects
Ability to transport position/image 2 3 3 3 2 3 2 2
Weighed Â 0.5 0.5 0.3 1.2 0.8 0.9 0.7 0.7 10
Speed of knowledge transfer
Speed of data analysis and 3 3 3 3 3 3 3 3
evaluation
Speed of knowledge 3 3 1 3 3 3 3 3
transfer/response
Speed of prep/survey development 1 1 1 2 2 2 2 2
Weighed Â 0.7 0.7 0.5 0.8 0.8 0.8 0.8 0.8 10
Confidentiality
Detail of confidential internal ⫺2 ⫺2 ⫺3 ⫺1 ⫺2 ⫺1 ⫺1
knowledge
27
28
TABLE 2 (continued)
3 = High Information Listening Tool User Virtual Virtual Web- Fast-Paced Impor-
2 = Medium Pump In Kits Design Brain- Concept Based Adaptive tance
storming Testing Conjoint Conjoint Weight
1 = Weak or Low Analysis Analysis
Blank = Not Applicable IP LI TK UD VB VCT WCA FP ACA %
Duplicability of (confidential) ⫺1 ⫺3 ⫺3 ⫺3 ⫺1 ⫺3 ⫺3 ⫺3
knowledge
Accuracy on sensitive questions 3 2 3 2 2 1 2 2
Possible legal protection 3 3 2 2 2 2 2
Weighed Â 0.9 ⫺0.1 0.1 ⫺0.2 0.2 ⫺0.2 0 0 30
Overall weighed 7.3 8 8.1 9.7 7.2 7.8 5.8 6.6 100
these criteria will vary with the innovation strategy and company re-
quirements. Thus they allow for a selection of methods, which are most
appropriate for a particular innovation project (see also Rosenberg,
1988). In order to demonstrate our claim and our framework’s applica-
bility in practice, we will present an example of how a firm that operates
in a high-tech niche market has applied the framework according to
their particular requirements.
The above example has been elaborated based on particular informa-
tion needs for Stage two in the NPD process. The selection criteria have
been operationalized so as to serve the unique needs of the innovation
project. The operationalization is based on several relevant prerequi-

sites, such as (1) the strategic positioning of the company or the strate-
gic unit (Cooper, 2001), (2) the defined stage gate criteria (Cooper,
2001), (3) the organizational structure (Kogut and Zander, 1995), and
(4) budget constraints.
First, the company’s positioning strategy as a global niche player in
the high-tech industry, acting as innovation leader in his business,
providing top technology and service to their customers, is relevant for
various knowledge transfer, feasibility, and confidentiality criteria. The
method used should adhere to the company’s innovative image and en-
hance the trustful relationships with their customers. Furthermore, the
selected methods and tools should be able to transport the complexity
and tacitness of the knowledge of their expert customers needed in this
important stage of product development. Hence, methods should be
able to handle complex verbal and visual information.
A second set of criteria results from the stage gate criteria which have
been defined for stage two in the adapted stage-gate process. Hence,
depending on how the NPD process in a company has been defined for a
particular project, several requirements for customer integration can be
derived. In the case of our niche supplier, who is working on a major
improvement of his device, those criteria primarily refer to speed, confi-
dentiality issues, and the quantity of knowledge transferred. Therefore,
the duration of customer integration and the probable response rate are
also important considerations. The more customers who can be involved
for a sufficiently long period of time, the better the knowledge base will
be at the end of this important stage of product development. However,
length of integration and a high response rate are insufficient to deter-
mine of the quality of information. In this stage, checking for potential
bias and systematic measurement errors is important.
The criterion “practicability for business processes” refers to the
process-oriented organization structure of the firm in question. As the
company is organized around business processes, customer integration

should provide synergy effects with regard to internal knowledge diffu-
sion, and knowledge demands. Other criteria refer to customer seg-
ments and touch points, which, in the case of our supplier, are partly
concentrated in particular areas and partly dispersed all over the globe.
Furthermore, requirements on the side of the customers should be low.
Their effort should be kept at a minimum, except the answering and
innovation task itself. Costs are important, however only for the reason
that the company is small and the budget limited.
Methods of customer integration must, of course, adhere to these
criteria. Once established, methods of customer integration can be

evaluated, for instance by a scoring model as demonstrated in Table 2.
The relative importance of these criteria may vary from project to pro-
ject and from company to company. Therefore, weighing the relative
importance of the evaluation scores may be sensible. In our particular
example, methods for customer integration were evaluated on the selec-
tion criteria first, using scores from one to three. As the project turned
out to be of high strategic relevance, nature of knowledge transfer and
confidentiality issues were rated very high, while knowledge interfer-
ence, feasibility/costs, and speed of data generation were rated low. In
the next step, the sum of scores was weighed with the percentage ratings
of the criteria, and summed up over all criteria. In our specific case, Vir-
tual User Design turned out to be the most appropriate technology for
integrating market intelligence into the designing and prototyping stage
of the NPD process, and has been successfully implemented.
The issue of selecting methods for customer integration in product
development is, however, not a matter of selecting a specific method,
but a matter of designing a whole system of methods linked together in
an overall process that focuses design efforts on the customer’s future
satisfaction (Kaulio, 1998). Selecting the most appropriate portfolio
of customer integration methods can significantly contribute to turn-
ing a technology-driven firm into a more market-driven partner of its
customers.
DISCUSSION
This article has advanced the perspective that a careful selection of

methods of virtual customer integration is necessary to improve a firm’s
knowledge base for new product development. A framework has been
presented, which classifies current conventional and virtual methods
throughout the stages of the NPD process, and which considers the ex-
plicitness and/or tacitness of knowledge to be exchanged. Contrary to
earlier contributions, which use the intensity of customer involvement
on the lateral axis for classification, we built this framework on insights
from the knowledge creation literature. We have argued that it is not the
integration of customers per se, which impacts the success of NPD pro-
cesses, but rather their knowledge in terms of customer needs and tech-
nical expertise. Hence, the usefulness of methods should be judged with
reference to the form of knowledge being exchanged in a particular
stage of the NPD process. Much has been written about the importance
of tacit knowledge for new product development and about the chal-
lenges of tacit knowledge transfer. The QLL framework contributes to
meeting this challenge in that it helps in selecting appropriate methods
for customer integration in NPD in industrial businesses.
This article advocates new, virtual methods, which help to reduce
costs and time-to-market while offering new opportunities for tacit knowl-
edge transfer. Although the literature has long supported the importance
of face-to-face contact between business partners, Ganesan et al. (2005)
report that face-to-face communication is less effective than electronic
communication as a means of knowledge acquisition. Furthermore, re-
lational ties are unrelated to geographical proximity (Ganesan et al.,
2005). Regular buyer-seller interaction fosters close relational ties and
virtual methods add to this. The QLL framework supports the appropri-
ateness of virtual customer integration methods for almost any stage in
the NPD process. However, an informed choice according to the partic-
ularities of the NPD project is vital. When tacit knowledge is the domi-
nant form of knowledge exchanged for new product development, a
community of practice approach and in-depth, face-to-face cooperation
is preferable.
The QLL framework has uncovered that virtual customer integration
complements the range of conventional methods. In particular, virtual
methods fill the void of conventional methods in two very sensitive
stages in the NPD process: “detailed investigation and design” and
“product concept testing.” Our business case has supported the appropri-
ateness of virtual customer integration for these stages. The qualitative
axis supplements the framework in that it offers criteria for the selection
of methods, which adhere to the knowledge transfer requirements in a
particular project. General criteria have been derived from the busi-
ness-to-business literature and applied to the electronic industry. From
this literature review we derived five qualitative criteria comprising the
nature of knowledge transfer, the interference of knowledge transfer,
feasibility and costs, speed of knowledge transfer, and confidentiality.

However, a single case study is not sufficient to know whether this list
of qualitative selection criteria can be regarded as exhaustive. More re-
search is needed in different industries and with different organizational
cultures in order to test whether the advantages of virtual customer inte-
gration hold. Ethnographic insights could add substantially to this issue.
We also presented a scoring model so as to demonstrate how the qualita-
tive axis can be applied to industrial business. Our work on this particu-
lar business case has uncovered the importance to adapt these criteria to
the strategic positioning of the firm, the stage gate criteria, the organiza-
tional structure, and budget constraints. However, one should not over-
look the fact that the criteria and the scoring procedure are subject to
internal negotiation processes, and have to be elaborated with care and
rigor.
From a relationship perspective, virtual customer integration might
not be suitable at very early stages of business relationships. Hart and
Saunders (1998) contend that a certain level of trust is expected to
be a central factor affecting acceptance of virtual customer integration
methods and tools. This assumption has yet to be supported by future
research. Literature has also emphasized that relationship building is
dynamic (Dwyer et al., 1987). We should therefore further investigate
which form of customer integration is appropriate for what particular
stage in the dynamic relationship between business partners. Further-
more, the role of sales personnel and key account managers for the im-
plementation of virtual customer integration is unclear. In their study of
Internet-based business-to-business marketing Avlonitis and Karayanni
(2000) stress the central role of the sales force in the successful imple-
mentation of Internet marketing strategies within organizations. There-
fore, studying the motivations, which prevent sales managers’ from
implementing virtual customer integration and/or motivate them to do
so, is an important field for future research.
With regard to the implementation of virtual customer integration
in industrial business, several advantages and drawbacks can be reported.
First, well-designed virtual tools enable customers to contribute directly
to the development of the design of the product. Vriens et al. (1996)
reported that pictorial representations, as opposed to purely verbal
ones, lead to increased importance of what they term “design-attributes,”
that is, non-quantifiable aesthetic or ease-of-use elements of a design.
Srinivasan et al. (1997) suggest that customer-ready prototypes provide
customers the additional, non-attribute-based information. Addition-
ally, a well-designed user interface is intrinsically motivating and fun to
tinker with. Besides bringing more customer input to the NPD process,
virtual customer methods also encourage a greater number of concepts
to be explored and tested with customers.
From a relational perspective, further benefits of Virtual Customer
Integration methods can be leveraged. The knowledge exchange process
can be viewed as taking buyers and sellers sequentially from unaware-
ness of new product features and benefits, to awareness, to product pref-
erence, and to the conviction that the co-developed product will provide
the best solution for customer needs. Customers learn from experience
of using virtual product prototypes and will adapt their expectations.
Virtual methods also allow regular interaction and development of a

shared view thus they have potential to positively influence buyer-seller
relationships. However, virtual tools still rely on virtual prototypes
rather than physical ones.
In contrast to consumers, industrial respondents are usually only
accessible during working hours, and due to their small population are
often over-researched. Increasing Virtual Customer Integration efforts
by manufacturers may lead to reticence on the part of industrial respon-
dents. This potential danger of “spamming” industrial buyers with more
and more virtual design and NPD research requests is therefore an
important issue. Personal contact and sales force assistance with virtual
customer integration is important in order to overcome these Internet-
related shortcomings.
Over and above, the business challenges of implementing virtual
customer integration methods can be daunting. Viewing customers as
innovators requires no less than a radical change in the mind-set of man-
agers. However, if implemented with care and rigor, firms might gain
considerable competitive advantage from customer creativity, accuracy
of information, and improved time-to-market.
REFERENCES
Ali, Abdul, Robert Krapfel, Jr. and Douglas LaBahn (1995), “Product Innovativeness
and Entry Strategy: Impact on Cycle Time and Break-Even Time,” Journal of Prod-
uct Innovation Management, 12, 1, 54-69.
Arabie, Phipps and Carroll J. Douglas (1998), “A Perceptual Mapping Procedure for
the Analysis of Proximity Data to Determine Common and Unique Product-Market
Structures,” European Journal of Operational Research, 11, 1, 268-284.
Avlonitis, George J. and Despina A. Karayanni (2000), “The Impact of Internet Use on
Business-to-Business Marketing,” Industrial Marketing Management, 29, 441-459.
Bechky, Beth A. (2003), “Sharing Meaning Across Occupational Communities: The

Transformation of Understanding on a Production Floor,” Organization Science,
14, 3, 312-330.
Beyer, Hugh and Karen Holtzblatt (1997), Contextual Design: A Customer-Centered
Approach to Systems Designs, San Francisco, CA, Morgan Kaufman Publishers.
Botschen, Günther, Ludwig Bstieler and Arch G. Woodside (1996), “Sequence-Oriented
Problem Identification within Service Encounters,” Journal of Euromarketing, 5, 2,
19-52.
Brown, John S. and Paul Duguid (1991), “Organizational Learning and Communi-
ties-of-Practice: Toward a Unified View of Working, Learning, and Innovation,”
Organization Science, 2, 1, 40-57.
Buckley, Peter J. and Malcolm Chapman (1998), “The Management of Cooperative

Strategies in R&D and Innovation Programmes,” International Journal of the Eco-
nomics of Business, 5, 3, 369-381.
Cannon, Joseph P. and William D. Perreault Jr. (1999), “Buyer-Seller Relationships in
Business Markets,” Journal of Marketing Research, 36, November, 439-460.
Chakravarti, A.K., Vasanta, B., Krishnan, A.S.A. and Dubash, R.K (1998), “Modified
Delphi Methodology for Technology Forecasting: Case Study of Electronics and
Information Technology,” Technological Forecasting & Social Change, 58, 1-2,
155-166.
Ciccantelli, Susan and Jason Magidson (1993), “From Experience: Consumer Ideal-
ized Design: Involving Consumers in the Product Development Process,” Journal
of Product Innovation Management, 10, 4, 341-347.
Cooper, Robert G. (2001), Winning at New Products: Accelerating the Process from
Idea to Launch, 3rd Edition, New York, NY, Perseus Books Publishing.
Cooper, Robert G., Scott J. Edgett and Elko Kleinschmidt (2002), “Optimizing the
Stage-Gate-Process: What Best-Practice Companies Do–I,” Research-Technology
Management, 45, 5, 21-27.
Dahan, Ely and John R. Hauser (2002a), “The Virtual Customer,” Journal of Product
Innovation Management, 19, 5, 332-353.
Dahan, Ely and John R. Hauser (2002b), “Product Development-Managing a Dis-
persed Process,” in Weitz, B. and Wensley, R. (eds.), The Handbook of Marketing,
London, UK, Sage Publications.
Dahan, Ely, John R. Hauser, Duncan Simester and Olivier Toubia (2002), “Applica-
tion and Test of Web-Based Adaptive Polyhedral Conjoint Analysis,” MIT Sloan
School of Management, Working paper, http://web.mit.edu/hauser/www/Papers/
FPE052802.pdf, accessed May 2006.
Dahan, Ely and Srinivasan, V. (2000), “The Predictive Power of Internet-Based Prod-
uct Concept Testing Using Visual Depiction and Animation,” Journal of Product
Innovation Management, 17, 2, 99-109.
Decker, Alexander and Harald Meissner (1999), “The Sequential Incident Technique
for Innovations (SITI),” in Kunst, P., Lemmink, J. and Stauss, B. (eds.), Service
Quality and Management, Wiesbaden, pp. 187-226.
Dwyer, Robert F., Paul H. Schurr and Sejo Oh (1987), “Developing Buyer-Seller Rela-
tionships,” Journal of Marketing, 51, April, 11-27.
Engelhardt, Werner H. and Jörg Freiling (1995), “Integrativität als Brücke zwischen
Einzeltransaktion und Geschäftsbeziehung,” Marketing ZFP, 17, 1, 37-43.
Franke, Nikolaus and Frank Piller (2004), “Value Creation by Toolkits for User Inno-
vation and Design: The Case of the Watch Market,” Journal of Product Innovation
Management, 21, 401-415.
Ganesan, Shanker, Alan J. Malter and Aric Rindfleisch (2005), “Does Distance Still
Matter? Geographic Proximity and New Product Development,” Journal of Mar-
keting, 69, October, 44-60.
Green, Paul E. and Srinivasan, V. (1990), “Conjoint Analysis in Marketing: New
Developments with Implications for Research and Practice,” Journal of Marketing,
54, 4, 3-19.
Hart, Paul J. and Carol S. Saunders (1998), “Emerging Electronic Partnerships: Ante-
cedents and Dimensions of EDI Use from the Suppliers Perspective,” Journal of
Management Information Systems, 14, 4, 87-111.
Helander, Martin G. and Jianxin Jiao (2002), “Research on E-Product Development
(ePD) for Mass Customization,” Technovation, 22, 717-724.
Herstatt, Cornelius and Eric von Hippel (1992), “From Experience: Developing New
Product Concepts via the Lead User Method: A Case Study in a ‘Low-Tech’ Field,”
Journal of Product Innovation Management, 9, 3, 213-221.
Kaulio, Matti A. (1998), “Customer, Consumer and User Involvement in Product
Development: A Framework and a Review of Selected Methods,” Total Quality
Management, 9, 1, 141-150.
Klein, Bob (2001), “Pump, Don’t Pull,” MIT Sloan Management Review, Spring, 15.
Kogut, Bruce and Udo Zander (1992), “Knowledge of the Firm, Combinative Capabil-
ities, and the Replication of Technology,” Organization Science, 3, 3, 383-397.
Kogut, Bruce and Udo Zander (1995), “Knowledge and the Speed of the Transfer and
Imitation of Organizational Capabilities: An Empirical Test,” Organization Sci-
ence, 6, 1, 76-92.
Kraiger, Kurt and Lucy H. Wenzel (1997), “Conceptual Development and Empirical
Evaluation of Measures of Shared Mental Models,” in Brannick, M.T., Salas, E. and
Prince, C. (eds.), Team Performance Assessment and Measurement: Theory, Meth-
ods, and Applications, Mahwah, NJ, Lawrence Erlbaum Associates, pp. 63-84.
Lampel, Joseph and Henry Mintzberg (1996), “Customizing Customization,” Sloan
Management Review, 38, 1, 21-30.
Leonard, Dorothy and Jeffrey F. Rayport (1997), “Spark Innovation through Empathic
Design,” Harvard Business Review, 75, 6, 102-114.
Lindgreen, Adam, Roger Palmer, Joëlle Vanhamme and Joost Wouters (2006), “A
Relationship Management Assessment Tool: Questioning, Identifying, and Prior-
itizing Critical Aspects of Customer Relationships,” Industrial Marketing Manage-
ment, 35, 57-71.
Nambisan, Satish (2002), “Designing Virtual Customer Environments for New Prod-
uct Development: Toward a Theory,” Academy of Management Review, 27, 3,
392-413.
Nonaka, Ikujiro (1994), “A Dynamic Theory of Organizational Knowledge Creation,”
Organization Science, 5, 1, 14-37.
Nonaka, Ikujiro, Patrick Reinmoller and Dai Senoo (1998), “The ART of Knowledge-
Systems to Capitalize on Market Knowledge,” European Management Journal, 16,
6, 673-684.
Ottosson, Stig (2002), “Virtual Reality in the Product Development Process,” Journal
of Engineering Design, 13, 2, 159-172.
Paustian, Chuck (2001), “Better Products Through Virtual Customers,” MIT Sloan
Management Review, 42, 3, 14-15.
Polanyi, Michael (1966), The Tacit Dimension, New York, NY, Anchor Day Books.
Prelec, David (2001), “Readings Packet on the Information Pump,” MIT Sloan School of
Management, http://mitsloan.mit.edu/vc/papers/IPPacket.pdf, accessed August 2003.
Rosenberg, Richard D. (1988), “Integrating Strategy, Industrial Product Innovation and
Marketing Research,” International Journal of Research in Marketing, 5, 3, 199-211.
Rosen, Deborah E., Jonathan E. Schroeder and Elizabeth F. Purinton (1998), “Marketing
High Tech Products: Lessons in Customer Focus from the Marketplace,” Academy of
Marketing Science Review 98, 06, http://oxygen.vancouver.wsu.edu/amsrev/theory/
rosen06-98.html, accessed May 2006.
Saaty, Thomas L. (1980), The Analytic Hierarchy Process, New York, NY, McGraw-
Hill.
Sawhney, Mohan and Emanuela Prandelli (2002), “Communities of Creation: Manag-
ing Distributed Innovation in Turbulent Markets,” California Management Review,
42, 4, 24-54.
Sharma, Arun (2001), “Trends in Internet-Based Business-to-Business Marketing,”
Industrial Marketing Management, 31, 2, 77-84.
Smith, Daniel C. and Jonlee Andrews (1995), “Rethinking the Effects of Perceived Fit
on Customers’ Evaluations of New Products,” Journal of the Academy of Market-
ing Science, 23, 1, 4-14.
Srinivasan, V., William S. Lovejoy and David Beach (1997), “Integrated Product
Design for Marketability and Manufacturing,” Journal of Marketing Research, 34,
1, 154-163.
Svensson, Carsten and Ari Barfod (2002), “Limits and Opportunities in Mass Custom-
ization for ‘Build to Order’ SMEs,” Computers in Industry, 49, 1, 77-89.
Thomke, Stefan and Eric von Hippel (2002), “Customers as Innovators: A New Way to
Create Value,” Harvard Business Review, 80, 4, 74-81.
Toubia, Olivier, John R. Hauser and Duncan Simester (2004), “Polyhedral Methods
for Adaptive Choice-Based Conjoint Analysis,” Journal of Marketing Research,
41, 1, 116-131.
Tseng, Mitchell M. and Jianxin Jiao (2001), “Mass Customization,” in Salvendy, G.
(ed.), Handbook of Industrial Engineering, 3rd Edition, New York, NY, Wiley,
pp. 684-709.
Urban, Glenn L. and John R. Hauser (2003), “Listening In’ to Find and Explore New
Combinations of Customer Needs and Solutions,” Journal of Marketing, 68, April,
72-87.
Von Hippel, Eric (1986), “Lead Users: A Source of Novel Product Concepts,” Man-
agement Science, 32, 7 July, 791-805.
Von Hippel, Eric (1994), “‘Sticky Information’ and the Locus of Problem Solving:
Implications for Innovation,” Management Science, 40, 4, 429-439.
Von Hippel, Eric (2001), “Perspective: User Toolkits for Innovation,” Journal of
Product Innovation Management, 18, 4, 247-257.
Von Hippel, Eric and Ralph Katz (2002), “Shifting Innovation to Users via Toolkits,”
Management Science, 48, 7 July, 821-833.
Vriens, Marco, Gerard H. Loosschilder, Edward Rosbergen, and Dick R. Wittink (1998),
“Verbal Versus Realistic Pictorial Representations in Conjoint Analysis with De-
sign-Attributes,” Journal of Product Innovation Management, 15, 5, 455-467.
Wenger, Etienne C. (1998), Communities of Practice: Learning, Meaning, and Iden-
tity, Cambridge, Cambridge University Press.
doi:10.1300/J033v14n02_01
IMPLICATIONS FOR BUSINESS

MARKETING PRACTICE
Successful innovation and new product launch lies at the heart of any
industrial business. Numerous researchers have stressed the outstand-
ing importance of close cooperation and partnering with customers in
new product development (NPD). Methods for customer integration
have been developed, such as a customer visits program, the lead-user
method, or customer idealized design, to name just a few. However,
empirical research suggests that many of those face-to-face collabora-
tive methods suffer from being unproductive (Ganesan et al., 2005).

New methods of virtual customer integration have added valuable
options for further intensifying cooperative relationships with custom-
ers. Virtual customer integration may help to considerably improve the
quality and depth of customer information and speed of data gathering
at various stages of the innovation process. Furthermore, virtual tools
enable rapid prototyping and immediate adjustment of product features
to customers’ ideas. The emerging new methods of Virtual Customer
Integration are predominantly researched and developed at the MIT
Sloan School. Virtual, in this context, means that an individual encoun-
ters synthesized experiences created by computers and performed in
such a way that the experiences to some degree are experienced as real
experiences by the user.
Virtual customer integration seems to be a promising idea, and the
number of methods and tools is steadily increasing. However, business
experience with the application of these methods is still nascent. Further-
more, successful application depends on whether these methods are chosen
according to their suitability for particular information requirements at
various stages in the new product development process. So far, this ques-
tion has remained untouched in the literature. Herein, we introduce a
framework for classifying these methods according to the various infor-
mation needs at different stages of the NPD process. Our classification is
based on three axes, a longitudinal, a lateral, and a third, qualitative axis.
The longitudinal axis represents stages in the NPD process. The lateral
dimension captures the degree of “tacitness” of knowledge which can be
exchanged by different methods and tools. Tacitness refers to knowledge
which is difficult to express or describe with language, numbers or mod-
els, like for instance how to ride a bike. Contrary to former conceptualiza-
tions, the lateral axis does not relate to the depth of integration, because
the objective of customer integration is not customer integration per se,
but primarily to gain access to their ideas, needs and expertise.
A classification of all methods and tools for customer integration on

the longitudinal and the lateral axes offers the following interesting in-
sights. Apart from a wide array of conventional methods offered for the
first two stages in the NPD process, conventional methods nevertheless
are limited to verbal or written interaction for identifying customer
needs and identifying and screening early ideas. However, particularly
in those first stages where creativity is vital for the innovativeness of the
solution, stimulating tools and visualizations could increase creativity.
Virtual integration methods offer feasible complementary benefits to
conventional methods for sharing explicit knowledge in the initial NPD
stages. Particularly with regard to the speed of data collection and

cost-saving aspects, these methods should dominate conventional ones,
provided that the necessary computer literacy and IT hardware exists
among the survey population. Interestingly, no method has been devel-
oped yet to support customers with externalizing tacit knowledge in the
stages of “Detailed Investigation & Design” and “Development.” How-
ever, this means that, so far, there are no methods available which help
exploit customers’ expertise at exactly those stages where user’s wants
and aspirations have to be translated into product specifications. Virtual
customer integration methods offer promising new tools for filling this
void. As for complex knowledge exchange other, much more sophisti-
cated methodology is needed, such as the integration of lead users into
product development, or an in-depth inquiry of online communities of
practice where industrial and academic experts meet and engage in
extensive discourse. Virtual methods seem more appropriate when
visualization and time is important. However, conventional methods
outperform virtual ones when a shared understanding is vital.
In order to find an appropriate portfolio of methods and tools which
suit the information requirements of a particular firm, we have introduced
a third, qualitative axis. Based on academic literature and business expe-
rience, we propose five general selection criteria. These include: (1) the
nature of knowledge transfer, (2) the interference of knowledge trans-
fer, (3) the feasibility/cost of customer integration, (4) the speed of
information gathering, and (5) the confidentiality of the information ex-
changed. For instance, customer integration in the context of high-tech
innovation requires methods that are able to handle complex information,
depending on the product and/or service in question. The interference of
knowledge transfer mainly refers to checking for measurement errors.
Particularly in industrial businesses where decisions often are made by a
buying center, those requirements become vital for data validity and
reliability. The feasibility/cost sub-dimension, for instance, comprises
requirements such as the monetary costs of implementation, or the ap-

plicability for concentrated or dispersed contact points. For instance,
firms with a global customer base who seek to integrate potential cus-
tomers at early stages of prototyping, designing, and concept testing
will probably give priority to virtual methods rather than conventional
ones. Speed of knowledge transfer not only refers to the time needed for
data generation but also for the development of adjusted tools, coding,
and analysis. Speed, of course, is important if companies strive for
innovation leadership in their market. Confidentiality of knowledge
transfer is a sensitive topic, particularly in high-tech industrial enter-
prises where NDP processes regularly end up with new patents. Meth-
ods of customer integration, therefore, should not interfere with the
confidentiality requirement and guarantee a sustainable competitive ad-
vantage. Hence, the qualitative evaluation of methods may also rule out
customer integration, however, on a solid basis of company objectives
and information requirements. Depending on the particularities of an
NPD project and organizational constraints in the company, the five
general criteria in question have to be adapted.
In general, methods of customer integration can considerably im-
prove a firm’s knowledge base for new product development. However,
it must be based on a profound selection of methods. Applying the pro-
posed framework uncovers a variety of methods that help increase the
knowledge base at various stages of the NPD process, but it also reveals
current gaps. Distinguishing between explicit and tacit knowledge ex-
change proved to be very helpful in evaluating the potential contribu-
tion of the methods and tools in question. Particularly in the most
sensitive stage when customer requirements are translated into product
specifications, virtual methods of customer integration, as for instance
Virtual User Design, appear to be a big step forward. The qualitative
axis constitutes a further advancement of our framework because it
brings individual requirements of companies into play. Accordingly,
companies can assemble their portfolio of methods and tools for user in-
tegration that fit their individual needs. If methods of customer integra-
tion are selected and implemented with care and rigor, firms might gain
considerable competitive advantage from customer creativity, accuracy
of information, and improved time-to-market.

Virtual Customer Integration in New Product Development in Industrial Markets

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Virtual Customer Integration in New Product Development in Industrial Markets

Transféré par

Droits d'auteur :

Formats disponibles

This article was downloaded by: [Romanian Ministry Consortium]

On: 2 March 2010

Journal of Business To Business Marketing

Virtual Customer Integration in New Product Development in Industrial

PLEASE SCROLL DOWN FOR ARTICLE

Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf

ABSTRACT. Purpose. Customer integration in new product develop-

Andrea Hemetsberger is Assistant Professor of Marketing, School of Management,

transfer requirements of a particular NPD project. With this framework

a shared understanding is vital.

KEYWORDS. New product development, customer integration, mar-

In the business-to-business literature, there is ample evidence for

New methods of virtual customer integration have added valuable

perspective of knowledge co-creation with customers” (Sawhney and

high-tech electronic industry. Finally, we will discuss the main findings

CONVENTIONAL MARKET RESEARCH AND FORMS

erarchy Process, Perceptual Mapping, the Delphi Method, and creative

TABLE 1. Summary of Conventional Methods of Customer Integration in the

Method Description Literature

similar to a family tree

Method Description Literature

joint development of new Science, 32, July 7, 791-805.

VIRTUAL CUSTOMER INTEGRATION METHODS

The emerging new methods of Virtual Customer Integration, predomi-

The virtual engineer is used to probe these customer needs so that

With Virtual Brainstorming (VB), a system also referred to as “Web-

FIGURE 2. Screenshot of a Virtual Brainstorming Output, Source: http://www.

Similar to Virtual Brainstorming, the Information Pump (IP) is a Web-

The incentives of this “online focus group” are based on “honest

Declarers score points by making statements that the detective cannot

Web-Based Conjoint Analysis

Conjoint analysis is the most widely used method to understand cus-

User Design (UD) exploits the interactivity of modern information

sign can be used complementarily, to determine which features are most

experimental design to estimate the interactions. Finally, UD is also

Virtual Concept Testing

Not all industrial products or services can be completely broken

Finally, with Toolkits, manufacturers actually abandon their efforts

FIGURE 5. Virtual Concept Test of Crossover Vehicles. Source: Dahan, Ely

from minor modifications to major new innovations (Thomke and von

FIGURE 6. Toolkit Configurator for Motif Design, Source: http://www.hyve-

QLL: A NEW FRAMEWORK

Recently, Kaulio (1998) introduced a noteworthy analytical framework

The Longitudinal Axis

The longitudinal dimension represents the phases of an NPD process.

Longitudinal dimension (process

information at this preliminary stage of new product development. Stage

product development, prototypes tend to be very costly, thus virtual

different stages in new product development.

figures. Instead, other, more sophisticated methods have to be used in

• Level 1 describes methods for sharing explicit knowledge, for ex-

Figure 7 exhibits the ways in which conventional and virtual cus-

and Mass-Customization Methods, Test Markets, and Beta-testing in

The Qualitative Axis: Evaluation Criteria

necessity to make an informed choice of methods for a particular NPD

is more critical in NPD cooperation and more difficult to transfer

are, for instance, the ability to transfer information in different modes.

Weighting its importance helps uncover the hidden subjectivity of the

APPLYING THE QLL FRAMEWORK IN PRACTICE:

Depending on the particular internal and environmental context within

project. The operationalization is based on several relevant prerequi-

company is organized around business processes, customer integration

criteria. Once established, methods of customer integration can be