Publication: On-Demand Features

Publication: On-Demand Features

Business models in the so-called sharing economy give customers temporary access to goods without ownership. While extant research primarily examined access to a complete object (e.g., access to cars in car sharing), companies increasingly offer temporary and paid access to certain features of goods that consumers already own (e.g.,  driving assistant function in a privately owned car). In a paper just published in the Journal of Business Research (AJG: 3), Tobias Schäfers, Marina Leban, and Florian Vogt conceptualize and empirically investigate on-demand features (ODFs), which allow customers to temporarily access additional features of a product they already own in return for a fee. Using ODFs, manufacturers can infuse existing product-centric business models with sharing economy and servitization principles, in order to generate recurring revenues. The article conceptualizes the novel phenomenon and delineates it from other concepts. Moreover, based on two experimental studies and drawing from fairness theory, first evidence is provided for how consumers react to key characteristics of ODFs, namely their tangibility and pricing structure. While intangible, software-based ODFs appear to find acceptance, consumers perceive on-demand access to tangible, hardware-based features as unfair, which explains their reduced purchase intent. Moreover, fairness perceptions and behavioral intentions are more positive towards ODFs that offer flat rate pricing compared to those that employ a pay-per-use pricing structure.

Link to the article: https://authors.elsevier.com/a/1dxd1Xj-jYFtA

Tobias Schäfers is an Associate Professor and Marina Leban is a post-doctoral researcher at the Department of Marketing. Both of them conducted this research as part of the Carlsberg Foundation Young Researcher Fellowship CF19-0310 (https://www.carlsbergfondet.dk/en/Forskningsaktiviteter/Bevillingsstatistik/Bevillingsoversigt/CF19_0310_Tobias-Sch%c3%a4fers). Florian Vogt was a student at Copenhagen Business School in the M.Sc. in Customer and Commercial Development/Sales Management, and is now a consultant at CODEX Partners, a German top management consultancy.