Consumer entrepreneurship and cultural innovation: The case of GinO12
Introduction
The classic distinction between production and consumption that has long characterized the field of economics and marketing is increasingly questioned. Several phenomena have contributed to blurring the distinction between production and consumption such as: 1) The acknowledgment that consumers are value co-producers (Vargo & Lusch, 2004). 2) The emergence of new modes of production and consumption in which consumers play an active or pro-active role (Scaraboto & Fischer, 2013). 3) The establishment of new forms of consumers' involvement in business financing (Belleflamme, Lambert, & Schwienbacher, 2014) and in new product development (Kleemann, Voß, & Rieder, 2008). 4) The acknowledgment of the enforced role that consumers have facing their supplying counterparts (Kozinets & Handelman, 2004).
By assuming a more consumer-centric perspective on the marketplace, scholars have documented how consumers contribute to shaping and governing market dynamics and interactions (Arnould & Thompson, 2005; Merz, He, & Vargo, 2009) especially as ideological carriers (Giesler, 2008; Kozinets, 2002; Thompson & Coskuner-Balli, 2007). For example, research has underlined how consumers' collective practices can provide valuable inputs to stimulate product innovation (Ansari & Phillips, 2011; Cova, Dalli, & Zwick, 2011; Franke & Shah, 2003; Kozinets, Hemetsberger, & Schau, 2008; Prahalad & Ramaswamy, 2004), bring about significant market changes (Karababa & Ger, 2011), and even shape new markets (Martin & Schouten, 2014). In the specific stream of scholarship on innovation management, research has mainly focused on the active role of a particular type of consumers, i.e. lead-users, as a source of product innovation (von Hippel, 1986, von Hippel, 1989). Lead users, i.e. users that experience the need for a specific innovation earlier than average consumers (Shah, 2000), furnish inputs valuable for new product development because they provide firms with reliable and effective information about what the demand actually needs and wants (von Hippel, 1989). Besides underlining the active role of consumers within marketplaces, a specific line of inquiry has studied the shift of consumers' role from consumption to entrepreneurship, i.e. consumer or user entrepreneurship (Shah & Tripsas, 2007), a topic that concerns all cases in which one or more consumers start up a new venture dedicated to the products or services that they normally consume. However, this topic is still little explored in current theoretical and empirical research (Agarwal & Shah, 2014; Shah & Mody, 2014). Usually embedded in communities, and in a nexus of market relationships involving several actors, consumer entrepreneurs are assumed to have a favorable position because they are granted early access to feedback and information relevant to commercialization prior to firm establishment (Shah & Tripsas, 2007). Moreover, consumer entrepreneurs typically face low opportunity costs, exhibit a strong willingness to experiment, and have high potential to explore commercial opportunities by entering existing markets or creating new ones (Haefliger, Jäger, & Von Krogh, 2010). The way in which consumer–generated innovations lead to the establishment of new ventures has been documented in diverse contexts: for instance, rodeo kayaking (Baldwin, Hienerth, & Von Hippel, 2006), mountain biking (Lüthje, Herstatt, & Von Hippel, 2005), video gaming (Haefliger et al., 2010), kite surfing (Tietz, Morrison, Luthje, & Herstatt, 2005), mountain climbing (Guercini & Cova, 2015), and virtual technologies (Chandra & Leenders, 2012). Regardless of the context, research agrees that when consumers have unsatisfied needs, they are keen to propose innovative solutions offering exploitable entrepreneurial opportunities for themselves (Shah & Tripsas, 2007). These needs generally concern acknowledgement that existing products are not sufficiently performative, unsatisfactory, or unable to achieve the desired results, with resultant phenomena of consumer-driven innovation. Yet, while studies have considered product innovation to be the main determinant of consumer entrepreneurship (see Agarwal & Shah, 2014 for a review),1 the literature still lacks studies focused on specific cases of consumer-entrepreneurial ventures where innovation has to be sought, not in specific innovative features of the offering, but in its different cultural content and meaning.
Research in the field of cultural strategy (Holt & Cameron, 2010) has furnished several examples of companies that have obtained competitive advantages by pursuing an unconventional strategy aimed at achieving cultural rather than technological differentiation. Market innovation is made possible not only through better products, but also through the search for unconventional cultural expressions of the product, of the product category, of the way in which a specific business is expected to be run (Holt & Cameron, 2010; Rindova, Dalpiaz, & Ravasi, 2011), i.e. cultural innovation. Cultural innovation can be defined as a firm's active response to an emergent demand created by socio-historical context-specific changes within existing industries or categories that is not driven by the desire for better technology(ies) but rather by the quest of a business for a better ideological expression (Holt & Cameron, 2010).
Achieving cultural innovation thus requires pursuit of an innovative strategy that involves, not innovating the product, but instead leveraging the firm's ability to propose alternative cultural expressions of products or business practices which consumers value and ultimately influence their preferences and choices (Holt & Cameron, 2010; Ravasi, Rindova, & Dalpiaz, 2012). These alternative cultural expressions become a source of differentiation upon which a competitive advantage can be built (Grant, 1991). The result is a unique positioning of the offering with regard to the cultural conventions taken for granted within the marketplace (Ravasi et al., 2012).
The aim of this paper is to shed light on the dynamics of consumer entrepreneurship based on cultural innovation, and to provide a case study on the growth of a consumer-established small business, GinO12, created in order to achieve cultural differentiation in its competitive arena. Established in 2015 by three passionate consumers, GinO12 is the first cocktail bar in the city of Milan dedicated to the promotion of the gin culture. It stands out in the local competitive arena for the cultural positioning that it pursues. A two-year longitudinal case study was conducted from the business idea to current running of the business. It combined longitudinal case analysis (Yin, 1994) with enactive research (e.g. Johannisson, 2002) in order to show how consumers can recognize the existence of a cultural opportunity, craft a cultural strategy and structure a firm to exploit this opportunity commercially. The findings furnish a theoretical and empirical elaboration to link the literature on consumer-entrepreneurship (Shah & Mody, 2014) with the theory of cultural innovation (Holt & Cameron, 2010; Ravasi et al., 2012).
Section snippets
Cultural innovation: a source of unconventional entrepreneurship
Because the study of consumer entrepreneurship has begun only recently, scholars are still far from reaching a full and shared understanding of this phenomenon (Agarwal & Shah, 2014). Although studies on consumer entrepreneurship assume diverse theoretical lenses, ranging from innovation management (Baldwin et al., 2006; Chandra & Leenders, 2012; Haefliger et al., 2010; Shah & Tripsas, 2007), through strategy (Tripsas, 2008; Winston Smith & Shah, 2013), to economics (Langlois & Robertson, 1992
Analytical method
The study that follows is an inductive inquiry (Glaser & Strauss, 1967) based on a single longitudinal case (Eisenhardt & Graebner, 2007; Yin, 1994) judged to be highly representative of the process of consumer entrepreneurship where innovation is sought, not at the product level, but at the cultural one: GinO12. Case studies are the preferred strategy when the focus is on a contemporary phenomenon within some real-life context (Yin, 1994) especially when knowledge and research about that
Three friends and a shared passion
Although GinO12 was formally established in 2015, its origin can be traced back to at least ten years before or even earlier. Before they got together to form a new business, its founders Alessandro, Tommaso and Author had long been best friends. They had known each other since they were five or six years old. They had grown up together and spent a large part of their lives together since childhood. Since they were eighteen they had shared a passion for gin that evolved with the same pace of
Case analysis and discussion
Having briefly summarized the case of GinO12, we provide an analysis and discussion of findings obtained through the lens of the theory of cultural innovation (Holt & Cameron, 2010). We aim at inductively shedding light on how consumers can recognize the existence of a cultural opportunity, craft a cultural strategy and structure a firm to exploit this opportunity. We thus conceptualize the phenomenon of culture-driven consumer entrepreneurship, which is distinct from the generic phenomenon of
Theoretical contribution
By showing that, like established firms, also consumer entrepreneurs can identify cultural opportunities and search for untapped cultural expressions of a business to form a firm, this paper has offered a theoretical and empirical elaboration to link the literature on consumer entrepreneurship (Shah & Mody, 2014) with the theory of cultural innovation (Holt & Cameron, 2010; Ravasi et al., 2012). It has considered cultural strategy as a suitable lens through which to read the phenomenon of
Acknowledgements
The Authors are grateful to the guest editors and to the anonymous reviewers for their constructive comments in the review process.
Giuseppe Pedeliento (PhD) is Assistant Professor of Marketing and Management at the Department of Management, Economics, and Quantitative Methods of the University of Bergamo. Former visiting lecturer at the Aalto School of Business (Helsinki), visiting scholar at the University of Washington Bothell (Seattle, USA), visiting professor at Johannes Kepler University (Linz, Austria), his research focuses on B2B and B2C marketing and branding, and consumer behavior. At the University of Bergamo he
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Giuseppe Pedeliento (PhD) is Assistant Professor of Marketing and Management at the Department of Management, Economics, and Quantitative Methods of the University of Bergamo. Former visiting lecturer at the Aalto School of Business (Helsinki), visiting scholar at the University of Washington Bothell (Seattle, USA), visiting professor at Johannes Kepler University (Linz, Austria), his research focuses on B2B and B2C marketing and branding, and consumer behavior. At the University of Bergamo he teaches, Marketing Advanced, International Marketing, Market Research, and Supply Chain Management. His articles appeared in Industrial Marketing Management, Journal of Business Ethics, Management Decision, Sage Business Cases, International Journal of Business and Management, and in other academic outlets.
Cristina Bettinelli (Ph.D) is Assistant Professor of Management at the Department of Management, Economics and Quantitative Methods at the University of Bergamo. Her research has included entrepreneurship, business model innovation, family business and corporate governance. Her works have appeared in journals such as Small Business Economics, Family Business Review, Futures, Journal of Family Business Strategy, International Journal of Entrepreneurship and Small Business, and International Business Review. She has edited books on entrepreneurship (Routledge) and is currently guest editor for Journal of Small Business Management and Journal of Family Business Strategy. She teaches entrepreneurship, international business and general management in both graduate and undergraduate courses. She is research fellow of the Cambridge Institute of Family Enterprise, Boston.
Daniela Andreini (PhD) is Associate Professor of Marketing at the Department of Management, Economics and Quantitative Methods at the University of Bergamo. Her research focuses primarily on digital marketing, social media marketing, social media management, multichannel retailing, sponsorship, brand management (B2B and B2C), and business model innovation. Her research appeared in journals such as International Journal of Innovation Management, Industrial Marketing Management, Journal of Business Ethics, and the IMP Journal. She has developed and taught several innovative courses related to Marketing Management, Digital Marketing and Management Consulting to both graduate and undergraduate students.
Mara Bergamaschi is Associate Professor of Management at the Department of Management, Economics and Quantitative Methods of the University of Bergamo, where she is also vice chancellor deputed to Fund Raising and Finance, and dean of the master programs in Management, Finance and International Business and in International Management, Entrepreneurship and Finance. She is also senior professor and faculty member of SDA (Scuola di Direzione Aziendale) at Bocconi University. Her research interests include marketing and branding in business and consumer markets, as well as the management of service industries with a particular focus on professional services. Here research appeared in different international journals like Futures, Industrial Marketing Management, Management Decision, and Journal of Business Ethics.