[Collaborative Innovation] How University Ties Benefit Product Attractiveness

Firms often collaborate with universities to access novel scientific knowledge and technological expertise with an aim to develop superior new products. For example, Italian startup Angles90 codeveloped the first dynamic training grips with the faculty of Strength Training Ergonomics at the Technical University of Munich. The company subsequently sold its patented innovation in more than 30 countries. In the U.S., autonomous driving technology firm Argo AI recently announced its investment of $15 million to create the Carnegie Mellon University Argo AI Center for Autonomous Vehicle Research, which will focus on advancing the field of self-driving technology. Well-established firms such as Adidas also engage in university–industry collaborations.

While research has highlighted the innovation potential of university–industry collaborations, it has neglected the marketing potential of these collaborations. In a new Journal of Marketing study, we explore how consumers respond to new products codeveloped with universities. We ask: Will consumers react differently to the same product upon learning it has been codeveloped with a university? What will these perceptions depend on and how strong are the effects?

The Value of Scientific Legitimacy

Our research, which includes eight studies and several experiments based on data collected across four countries, yields three major findings:

Consumers perceive a given product as more attractive when it is portrayed as developed in collaboration with a university.
Collaborating with a university infuses the underlying firm with a stronger sense of scientific legitimacy, thereby making the resulting product more attractive to consumers. Firms collaborating with universities are viewed as being able to understand and effectively work “with the latest scientific ideas in the field” and as capable of developing cutting-edge technological innovations.
The positive university effect is more pronounced when the scientific legitimacy conferred is more important to the: (a) product in focus (high-tech vs. low-tech), (b) underlying company (startups vs. established firms), (c) project in focus (technology vs. aesthetic design), and (d) target customer (high vs. low belief in science).

Companies rarely advertise their products as being codeveloped with a university. In one study, we asked 22 managers in an Executive Education MBA program to develop a short product advertisement based on background information about a company and its latest product, including the notion that the product was co-developed with a university. Only 4 out of 22 managers used the university co-development information when marketing the focal product. In another study, we used a similar paradigm involving 42 Master of Science in Marketing students. Again, only a small number of participants (14.6%) decided to include the fact that the focal product was developed in collaboration with a university in their advertisement copy.

Lessons for Chief Marketing Officers

Once a firm has decided to codevelop a new product with a university, we highlight how and when actively marketing university-codeveloped products as such may yield incremental benefits. Our study offers the following lessons for Chief Marketing Officers:

Firms that engage in open innovation practices with universities might not maximize the economic value of the products if they fail to broadly communicate the collaboration to their prospective customers. Using labels such as “codeveloped with a university” or “university knowledge inside” can incrementally increase the product’s market performance. One of our studies shows that participants were willing to pay, on average, 65% more for the same product when it was portrayed as codeveloped with a university.

The boundary conditions that we identify help managers anticipate when actively marketing university–industry collaborations will be more (or less) effective. Marketing products as codeveloped with a university can be particularly promising for new firms, when the underlying product is high-tech, or when the target customer scores high on belief in science.

Since belief in science is markedly related with one’s political orientation, we find that the positive university effect emerges strongly for liberals, but not for conservatives. Thus, marketing university co-developed products might be particularly promising when targeting the product to liberals.

Apart from political orientation, future research could look at other consumer characteristics with an aim to effectively target university-codeveloped products. For example, scholars can test whether religiosity and nationality are moderators of the positive university effect. In the Netherlands, for instance, people tend to trust science and its institutions more than media, government, and courts of law. In contrast, there are other countries such as Guatemala with a very low belief in science, and it will be interesting to see how consumers there respond to products codeveloped with universities.