Just a Mental Problem: Acceptance and Barriers of Using Ethnographic Methods for Product Innovations for SMEs in B2B Markets: An Abstract

Developing new and enhancing existing products are core drivers for the competitiveness, success, and survival of small- and medium-sized enterprises (SMEs), in particular in the B2B sector. However, recent studies found that most of the newly launched products fail in the market (e.g., Armstrong et al. 2008). One of the reasons is an insufficient effort in customer-oriented research due to limited financial resources of SMEs. This is surprising, because SMEs have close contacts with their customers in the B2B sector. Therefore, gathering information on customer needs and requirements for product innovations and improvements could be less difficult for SME, but it seems that managers in SMEs are not aware of the potential of ethnographic research. However, the general problem of ethnography methods in B2B—in contrast to B2C—is that the producer has to overcome two distances and consequently two barriers. While producers in the B2C context directly communicates with the end user of their product, in B2B producer must convince the customer (first distance) and subsequent the end user (second distance) with their products. This working paper—based on eight qualitative interviews with CEOs—shows that the acceptances of ethnography of SMEs are higher when companies produce a standardized product and have frontline employees with close contact to customers. Nevertheless, the CEOs see the limited resources (e.g., money, time, and personal) of small- and midsized companies as an important barrier. Because of this, SMEs prefer traditional research methods in contrast to ethnographic approaches with uncertain results. Another barrier for the CEOs is the acceptance of their customer and end users to implement ethnography at their working place. However, the companies assume that the customer acceptance will be higher when the reasons of the research will be clarified previously and when they identify a benefit for themselves. Moreover, trust in each other is identified as a key factor for successful ethnography because the privacy of B2C customer is not comparable with the private data of business companies. One main driver for a trustful ethnographic approach can be a strong and long relationship.