Publication: Trends in packaging claims for new products : impacts on firm value
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2010-09
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Abstract
An important reason why individuals join groups or communities is to satisfy their needs for identity.
Firms might exploit this societal tendency to gain a competitive advantage. Using the strategic
approach adopted by Kiehl’s, a U.S. cosmetic producer and retailer, as a source of inspiration and
illustration, this paper develops a novel theoretical framework to investigate how firms interact with
communities to access privileged customers’ information, from which they can build a product
differentiation advantage. We argue that by adhering and supporting a well-defined set of values,
Kiehl’s both achieves community membership and strengthens the sense of identity that its target
communities provide to their members. These investments prompt reciprocal community member
behaviors, which the company channels into its customer knowledge development process. Finally,
this article describes how firm–community interactions can protect the differentiation advantage by
turning products into symbols of the communities to which its customers belong.