Understanding Individual and Collective Consumer Power in the Modern Economy
Time: Tue 2019-11-26 09.00
Location: Sal F3, Lindstedtsvägen 26, Stockholm
Subject area: Industrial Economics and Management
Doctoral student: Matthew Wilson , Skolan för industriell teknik och management (ITM)
Opponent: Associate Professor Ana Lisboa,
Supervisor: Professor Esmail Salehi-Sangari,
Consumers today are empowered by access to technology: they have drastically improved their ability to obtain knowledge, to communicate with each other and with firms, and to influence the marketing function. The research presented in this dissertation investigates consumer power in the modern economy. This topic is studied in two contexts which reflect the range of consumer power that exists today, from low levels of power exhibited by individual consumers to high levels of power exhibited by consumer collectives. These two contexts shed light on how consumers exert control over the marketing function in the context of the modern economy.
The investigation of consumer power is undertaken through four papers. Paper 1 illustrates how even unskilled and everyday consumers who are operating as individuals can exert power over marketers through the practice of upcycling, or when items which would otherwise be considered garbage are repurposed, modified, or transformed into useful items. This paper suggests that there are a range of benefits consumers seek when they engage in the empowered behavior of upcycling, and provides managerial guidance on how firms can approach situations in which consumers upcycle their offerings. Papers 2, 3, and 4 focus on consumer power in situations where consumers are members of collectives; specifically, these papers focus on crowdsourcing. Paper 2 examines how consumers have used crowdsourcing initiatives as opportunities to push their own agendas. This paper illustrates a range of possible behaviors which may occur in crowdsourcing initiatives, and exposes risks that firms face when engaging in crowdsourcing. Paper 3 provides a theoretical conceptualization of why consumers are able to influence outcomes in crowdsourcing. Specifically, this paper uses social power theory to identify how power is structured in consumer collectives and to explain how this power structure can lead to the outcomes identified in paper 2. Paper 4 investigates consumer perceptions of power throughout the crowdsourcing process. In addition, this paper investigates how attitudes towards the brand and purchase likelihood are impacted by a firms decision to ‘accept’ or ‘reject’ the will of the crowd.
Through these four papers, this research enhances understanding of the spectrum of consumer power that exists today, from unskilled individual consumer power in upcycling to networked consumer power in crowdsourcing. This research provides new theoretical understanding of how consumer power is structured and provides managerial guidance of how to approach situations in which consumers exercise their power. Specifically, this research conceptualizes how the bases of social power are structured differently depending on the context. From a practical stance, this research exposes both opportunities and risks that marketers face as a result of increased consumer power, and provides guidance for managers on how to approach these situations.