Welcome back!
Starting today, I’m going to complement my regular posts on online marketing and web analytics with review of current, relevant marketing topics.
Today, I took a look at:
Prahalad, C. K. and V. Ramaswamy (2003). “The New Frontier of Experience Innovation.” MIT Sloan Management Review 44(4): 12
Purpose of this Article
The purpose is that the manager focuses on value creation through innovation. The authors do not offer best practices but new practices in creating an experience environment. They challenge the assumption that just developing core competencies guarantees success.
The Central Message of the Reading?
Prahalad and Ramaswamy (2003) point out idea convergence and co-creation as necessary activities in value creation, which “is defined by the experience of a specific consumer, at a specific point in time and location, in the context of a specific event” (p.14). This proposal challenges the current assumption that value creation is product-specific, centered around core competencies and company-centered. “An experience environment can be thought of as a robust, networked combination of company capabilities (including technical and social capabilities) and consumer interaction channels (including devices and employees), flexible enough to accommodate a wide range of individual context-and-time-specific needs and preferences” (Prahalad and Ramaswamy, 2003, p. 15).
Just as “soft skills” are the buzz word in current management studies, “soft knowledge” is a buzz word in marketing studies. “Soft knowledge” is solutions-based innovation that focuses on accumulated company expertise to create customer value.
Managerial Implications
Core competencies are no longer the goal, instead are now the means to create experience innovation because a technological capacity is only relevant when it fits the desire the consumer’s desire to improve an experience. Convergence of consumer and designer roles, as well as business and technology roles, are key to the experience innovation economy.