swoon editions winning product selection project
TRANSCRIPT
The Team
Gence Emek!Undergrad: BA Hons. Philosophy from University of Nottingham"Future job: Tech Entrepreneur"Favorite Chair: #14 Bistro chair for its simplicity
Anne Hooper!Undergrad: BA in Economics from Brown University "Future job: Business Development, Marketing, or Management Consulting"Favourite Chair: Stephen Swift wooden stools
Philipp Ebsworth!Undergrad: MA Hons in International Relations and Management from St. Andrews University"Future job: Graduate Trainee Program in Pharmaceuticals or Car Industry"Favorite Chair: My father’s leather adjustable armchair with massage function
Unna Hallikainen!Undergrad: BA Hons in International Business and French"Future job: Business Development"Favorite Chair: Charles & Ray Eames lounge chair
Daniela Ukrainski!Undergrad: BA Hons International Business with Russian and Chinese from Regents College London"Future job: Marketing or Business Development in a tech start-up "Favorite Chair: Our metal swing dining room chair at home
Daniil Auvinen!Undergrad: BA in Economics and Business from University College London"Future job: Financial Services"Favorite Chair: Alvan Aalto’s Lounge Chair 400
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Swoon Editons Overview
Swoon Editions is a small online seller of select, limited production of furniture, more specifically chairs"
Currently specializing mostly in classical designs with while aiming to provide several unique advantages "
By eliminating the middle man Swoon is able to sell at a highly discounted price compared with traditional high street retailers"
High quality of overall product �3
01
Product Selection
Theory from Kotler and Keller (Marketing
Management, 2012)"For Swoon
Ensures marketability"Creates favorable profit margins"Is trendy and has appealing style "Has representable quality"Deals well with competition
Smaller and start-up company in nature and as such product selection is key!"
Finding a winning formula which helps them find their next big seller is essential to their success.
Project Procedure
Task: Develop product identification strategy and process with" benchmarks and case studies
Delivered initial brainstorm of ideas – everybody came up with 10 examples of company case studies (not all relevant)
Split into individuals to deliver best processes and then concentrated on literature due to lack of reliable and varied company processes available
Delivered weekly progress through mini-‐presentations at the Swoon Of<ices
Settled on 5 processes – all different but with backing in academic literature and case studies
Current Product Selection Method
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Current Products
Expert Designers
Prototype
Sales Figures
Customer Opinion
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Roadmap
Discovering the benefits of market research
Assessing a blogger approach
Collaborating with designers
Research into customer perceptions
Creating a hybrid approach
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Discovering Market Research
“From crowdsourcing to conjoint analysis”!!
Analysis of successful crowdsourcing campaigns included initiatives such as VitaminWater’s ‘Flavorcreator’ to Dell’s ‘Idea Storm’ "
Aimed to determine how these companies utilized crowdsourcing as a means to creating the winning products "
Unsatisfactory information and lack of true applicable to Swoon given the differences in organizations size and scale"
Yet it set us on the right course and made us look for alternative methods
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Conjoint Analysis
Conjoint Analysis is one of the most widely used pre-launch product design forecasting tools"
Famously used to help determine the design of Courtyard by Marriott Hotels, Stanford’s MBA Program or E-Z Pass design and pricing"
As such, could also have great potential for Swoon Editions
An Example From Courtyard Marriott:!
“Conjoint found that business travelers (primary core target audience) didn’t sufficiently value traditional hotel attributes like an “action” lounge, upscale restaurant, bellman, or airport transportation. !
Instead, targeted business travelers valued items like a room that is slightly larger than most (1 f, sink in a separate area, coffee maker, and décor similar to new Hiltons” - create a Hotel “designed by business travelers for business travelers”
Conjoint Analysis Process
Determine how customers value specific, different features of a product (e.g. type, color, style, size, price etc)"
Gain insight into which combination of features is most influential for customer’s decision/purchase making process"!How it works:!
Two or three images"
Style and other key features mentioned"
Customer make trade-off decision "
Done for all variants - can be several 100
Conjoint Analysis Process
!!!!Style 1!Price: £250"Colour: Beige"Material: Oak and Wool cover"Size: Medium"Arms: No
VS.
!!Style 2!Price: £300!Colour: Black"Material: Oak and suede leather !Size: Large"Arms: Yes
How the results could look !(taken from slide on pervious page)
Pros & Cons of Conjoint Analysis
Very accurate and implementable
insight into ideal, winning product
More complicated and extensive than surveys and may need professional analysis aid and
could increase costs
Procedure
Case Study of a successful outcome in blogger collaboration in product selection
Drawing on academic literature and empirical research for further understanding
Using customer data and research to create an example of how Swoon Editions could experiment with blogger collaboration
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Company Case Study
Scandinavian online clothing store Bootz.com collaborated with an established Swedish blogger for product selection"
Blogger’s audience overlapped with the website’s target audience"
Blogger did not design clothes, only selected pieces to be sold "
Chosen products reflected her personal taste and became winning products because of her tastemaker status
Academic Theory
Theory of Status Consumption!!Trickle down effect of social behavior
The home—its location, style, features, and decor—is central to consumer identity construction
Mimicking elite tastes: acquiring goods that have been ‘consecrated’ by tastemakers
(Ustuner and Holt, 2009)
Empirical research on blogger influence!Role of influential bloggers in developing
innovative business opportunities: the influentials are often market-movers: they influence buying decisions "
(Agarwal et al, 2012)"
Bloggers’ seen as more reliable and valuable than commercial information "
(Wu, 2011)"
Based on social capital perspective, a person with a good social relation online can establish a reputation that affects others’ purchasing behavior "
(Hung and Li, 2007)
Process
Analyze Customer Data
Age"Gender"Socio-economic"Sales data
Identify blogger and make
collaboration contract
Online Research"Audience demographic overlap"Sector overlap, non-competitor"Image match"Contact and agree terms
Blogger chooses chair within
Swoon’s existing design framework
Blogger able to contribute within chosen dimensions"Work with Swoon’s design prototypes, select color of fabric and wood type"Select favorites from inspiration board
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Process
Set criteria for blogger! Swoon customer data shows target audience to
be female, in their 40’s, single, in long term-homes, above average income"
Blogger’s audience should match/overlap with Swoon’s target audience and be in a related industry (interior, lifestyle, home) but not a competitor"
Established niche, stable reader base and preferably interactive "
!Research to find blogger!!
Online research resulted in a list of approximately ten potential collaboration candidates with one being the most suitable match
Ideal match
Next Steps
Approaching chosen blogger and suggesting collaboration,
making a contract
Blogger contributes to
product design process
Chair goes through an audition or goes
directly to test production "
(small edition, followed by full
edition if successful)
Pros & Cons of Blogger Approach
In addition to product selection this process offers
marketing and sales opportunities
The subjectiveness of taste both
blogger’s and customers’ in terms of what constitutes a winning product
Procedure
Case study of several different companies selection method
Researched and looked into academic theory for explanation of how it was successful
Conforming the idea to Swoon’s specific case and considerations for how it could develop
Examined Opening Ceremony closely and then found several other examples with a similar process
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Case Study
Opening Ceremony is an international retailer specializing in fashion for men and women"A key draw is hand-picked and stylistic nature of all the items and has strong and cohesive style throughout"Collaboration with both well-known and small time designers is at the heart of their business structure "
Process produces unique one-of-kind items exclusively for Opening Ceremony"Typically take a company’s very well established item and then morph and design an item that fits their style
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Case Study
Have done several well known collaborations such as:"!!They use products/brands that have their own identity and then apply their own design aesthetic and turn it into something original that fits OC’s brand and customer’s style"Several other clothing company’s have done similar things such as: H&M, Target, K-Mart, and many others
OC & Muppets"OC & Kegs
OC & Adidas"OC & Pendleton
Academic Theory
Comparative Advantage! Task efficiency and effectiveness will largely vary among firms and will ultimately result in
trade" Ricardo (1817)"
Competitive Advantage! Firms can develop certain attributes that allow for increased competitiveness in the market " Often seen in established brand name, technology special knowledge, or unique relationships "
Porter (1985)"
Collaboration Research Findings! Collaboration is increasingly found to be helpful as has been proven to lead to
innovation, increased creativity, and economics benefits for both parties "Increased teamwork and structured network has been shown to improve innovation output"
Ahuja (2000) & Uzzi and Spiro (2005)" Due to specialization of companies, collaboration can often open products to wider market
share and provides mutual benefits to help both parties succeed"Jap (2001)
01
Process
Swoon holds a competitive advantage in their ability to manufacture smaller batches of furniture at a significantly lower cost than other furniture makers"
Collaboration with designers would effectively outsource much of the time-consuming and costly design process while the firm can capitalize on production advantages"
Firm provides designers with production limitations and defines what is feasible in production"
Designers get free advertisement and an opportunity to highlight their own style (monetary compensation also recommended)
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Process
Swoon cannot yet attract very large name designers so propose to use student designers who have more to gain from partnering with Swoon
Design competition according to current
needsMajors to advertise to include architecture, fashion, textiles, interior design, industrial design
Advertise competition to London design
schoolsSwoon then selects
winning design to be produced
To include specific design limitations for production requirements
Winner gets CV boost and a free final product
Next Steps
Further research production limitations
Select universities to run the
competition & speak with
administrations on how to access
students
Assess which needs Swoon wants fresh, unique designs for
(could be fabric designs for current chairs, tables, ect.)
Pros & Cons of Collaboration
Ability to capitalize more on competitive advantage; easy way
to get unique exclusive products
Doesn’t completely outsource product selection; consider
relying on other methods to access demographic
considerations
Procedure
Looked into examples of successful companies and some of their innovative product selection procedures
Came across industrial design research on customer perceptions towards durable goods
Applied the ideas from research to design a survey and elicit responses on Swoon products
Explored ways of creating a an actionable process for Swoon to find the winning pieces
Research
Overview: !How do consumers perceive a durable good’s
appearance? !! From a total of 130 different descriptions, J. Blijlevens, et al. (2009) used PCA to identify 3 main attributes that consumers use to distinguish the appearance of durable products. "!
The appearance attributes together provide the consumer with an overall impression of the product and are considered to be more abstract than separate physical aspects.
The 2-step model of product appearance perception
Product Physical Properties:!
Colour, shape, texture, surface, size, contrast, symmetry,
orientation, weight
1Consumer’s
perceived appearance attributes:!
Modernity, simplicity, unity"
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The three main attributes
Source: J. Blijlevens, et al. (2009)
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Modernity:"modern, old-
fashioned, classical, oldish, sleek, futuristic, kitsch and retro
Complexity:"simple,
functional, plain, boring, unusual and minimalistic
Playfulness:"playful, funny
Relevance to Swoon
When the product meaning that is communicated is not clear to the consumer, (s)he will appreciate it less. "
In practice, designers often face the difficulty of how to incorporate an intended meaning in a product design."
Thus, it is valuable to provide designers with actionable guidelines that can be used in the pre-production evaluation process.
Researchers find that these attributes are: Universal - Stable across several consumer groups Generalizable and not product specific -
validated across several product categories.
Eliciting responses from customers: !
Is there a link between the good’s appearance attributes and the consumer’s willingness to purchase?"
Can we use these perceived attributes to help Swoon choose the winning products?
Detailed Process
Decide on how to elicit WTP
Direct (easier)"Indirect"Other ways?
Finalize the survey and send
it out
Online (Web, e-mail)"Survey design to maximize response rate"Risk consideration"Customer demographic considerations
Analyze the dataRegressions with WTP as DV"Attributes as IVs"Choose designs that score highly in most important dimensions
Test Survey Results
Ran a short survey among students"44 responses, 57% male, 43% female, Ages 20-27"Questions asked: "
Would you consider buying this chair? " Please rate this chair on a scale of 1 to 5, along these three dimensions: "
Old-fashioned - Modern" Simple - Complex" Serious - Playful
Limitations:!Small sample size"Homogenous sample"
Young, educated, urban people in their 20s"Low-quality pictures"Low number of chairs surveys (6)
Main takeaways! Some interesting results; for this sample: "
Respondents seem to prefer the chairs they perceive to be “Modern”"
If it was “Modern” –looking, then complexity and playfulness seemed to add to desirability"
However, if the chair is perceived “old-fashioned”, then complexity and playfulness seem to reduce willingness to purchase."
Thus it would be interesting to see how Swoon customers, or demographically similar people, would rate these chairs.
Next Steps
sIntroduce price into the model
Collect responses
Analyze results choose the winning designs
Consider additional research on perceptions
Research suggests
atypical designs are more
appealing
Is there an optimal level of “typicality” and
“arousal”?
and/or
Pros & Cons
Pinpoints desirable characteristics, "
Provides actionable guidelines, "
Establishes connection between attributes & WTP,"could yield indicative price
ranges"
Response rate 3%,"May not translate into purchasing behavior,"
May not reach a representative sample"
Procedure
Looking at companies with innovative product selection such as Quirky, Kraft, BMW, and Zazzle
Identified Mookum as implementing a successful collaborative process with expert scouts as central to product selection
Found that collaborative processes are an emerging trend
Try to find a way of implementing the expert scout methodology for Swoon
Hybrid Approach
Combines qualitative and quantitative methods Limitations of one type of data can be balanced by the strengths of another (Tashakkori and Teddlie, 1998)
Expanding scope & improving analytic power of the study (Sandelowski, 2000)
!! Literature Review of each component of the Hybrid approach!
Theory of Expert Competence" Behavioral Decision Science" Netnography" Validity
Literature Review
Expert Decisions!!
Theory of Expert Competence (Shanteau, 1992)"1. Knowledge of the domain"2. Psychological traits associated with
experts"3. Cognitive skills necessary to make tough
decisions "4. Ability to use appropriate decision
strategies"5. Task with suitable characteristics"
!Experts often rely on heuristics to make their decisions which can lead to cognitive biases (Simon, 1987)
Behavioral Decision Science!!
Building choice criteria that deal with informational complexities involved in choice."Overcoming choice overload and getting to the substance (Edwards & Fasolo, 2001) "Structuring preferences in a meaningful yet simple way (Carlson & Bond, 2006)"Eliciting values inherent in the structure (Fischhoff, 1991) "
Literature Review
Netnography!!Defining choice criteria through Netnography."Criteria not yet defined: qualitative research
techniques allow for a deep dive into the situation to establish real meaning, appropriate for exploratory research (Seale, 1999)."!Benefits of using netnogrpahy as a qualitative
method (Kozinets,2002):"!It is naturalistic"It is immersive"It is descriptive"It is cheap"It is adaptable
Validity!!
Using quantitative methods to check the extent to which results from the process are representative of real-world customer preferences"!Concurrent Validity: measuring a new test or procedure against a gold-standard benchmark (Craighead & Nemeroff, 2004)"
!
Methodology
Exploring Forums
Building Criteria
Expert’s Pick
Process Validation
Select website with rich qualitative data (forum discussions)"Track discussion topics and messages
Identify commonly occurring categories important of selection"Provide decision criteria
Swoon provides decision expert for chair selection"
Expert ranks each chair on a scale of 1-7 for each of the 6 criteria
Compare with existing sales data"
Compare data with survey results from random sample"!
Exploring Forums
Interested in people’s preferences and buying behavior in relation to chairs and sofas"
We identified 6 websites which focus on furniture and related items"
In these 6 sources we identified 56 topics constituting 239 messages that contained information about people’s requirements, tastes and decision-making processes
1.http://www.styleathome.com/shopping/buying-guides/buying-guide-sofas (1 topic: 4 messages)"2.http://www.myfurnitureforum.com/ (11 topics: 49 messages)"3.http://furnish.co.uk/search/posts/chair (7 topics: 101 messages)"4.http://interiordec.about.com/ (7 topics: 7 messages)"5.http://furniture.about.com/ (5 topics: 5 messages)"6.http://ths.gardenweb.com/forums/furniture/ (15 topics: 67 messages)"
Building Criteria
Affinity with space Fit with interior design "Multipurpose pieces sell more on mass
Dining vs. Living Room
Separate discussions depending on dining or living room chairs" Need for clear divide between types of chairs" Dining chairs (bought in 4s/6s) vs. living room chairs (more multipurpose)
Physical Size Some chairs too big for people’s space
Comfort Height, leg length, how firm or soft the cushions should be, if they want to sit straight or relax"
Must offer a range of pieces with different fillings and posture characteristics
Accent furniture pieces
Neutral pieces can be boring" People want “IT furniture pieces”, “one of a kind pieces”, “unique, vintage pieces”, “brightly colored pieces” and “pieces with piping detail”
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Expert Questions
1. Is there a general affinity with the interior design of people’s homes?!
2. Does it match the living room?!
3. Does it match the dining room?!
4. Will the chair physically fit into the space?"
5. Does the chair appear comfortable?"
6. Is the appearance of the home enhanced?
01
Findings
Experts pick Amelie in Oatmeal Linen as the winning product!
Expert Results Item No. 1 2 3 4 5 6 7 8 9 10
Chair name the milly in oatmeal line with stripe
sylvie in sand linen
milly in grey linen
chiswick in true grey check wool
the marlow in oatmeal linen
the panama in grey linen
windsor carnaby in oatmeal herringbone wool
Amelie in oatmeal linen
louis in mocka brown linen
Rat
ing
Interior design 3 6 4 6 4 3 5 5 6 4
Living room 5 7 5 2 2 1 2 5 5 3
Dining Room 1 6 6 6 5 4 7 5 7 6
Size 6 6 6 1 4 5 1 3 7 6
Looks comfortable 3 3 2 6 2 3 7 4 5 4
Enhance appearance 3 5 3 5 2 3 6 5 7 3
Total 21 33 26 26 19 19 28 27 37 26
Validation - Sales Data
Sales data
Item Chair name No. of Chairs sold
Edition (Weeks)
No. sold / week
Rank
1
the milly in oatmeal line with stripe 119 15 7.93 1
2
sylvie in sand linen
16 14 1.14 10
3
milly in grey linen
60 14 4.29 3
4
chiswick in true grey check wool 25 18 1.39 9
5
the marlow in oatmeal linen
22 10 2.20 6
6
the panama in grey linen
19 10 1.90 7
7
windsor
36 11 3.27 4
8
carnaby in oatmeal herringbone wool 17 12 1.42 8
9
amelie
26 10 2.60 5
10
louis in mocka brown linen
92 12 7.67 2
0"5"10"15"20"25"30"35"40"
1" 2" 3" 4" 5" 6" 7" 8" 9" 10"
Exper
t
Sales
Expert Results and Sales Data
Weak positive correlation between ranking based on sales data and expert ratings"!
r = 0.22
Validation - Survey
Strong positive correlation with sales data:" !
r = 0.71
0"
2"
4"
6"
8"
10"
12"
1" 2" 3" 4" 5" 6" 7" 8" 9" 10"
Sale
s
Survey Results
Sales Data and Survey
Survey'Results'Item No. Chair name Total Score Ranks
1
the milly in oatmeal line with stripe
537 2
2
sylvie in sand linen
418 8
3
milly in grey linen
536 3
4
chiswick in true grey check wool
450 6
5
the marlow in oatmeal linen
385 10
6
the panama in grey linen
386 9
7
windsor
498 4
8
carnaby in oatmeal herringbone wool
472 5
9
amelie
447 7
10
louis in mocka brown linen
550 1'
Pros & Cons of Blogger Approach
Strong correlation between sales data and survey results"Method is easy to implement"Good feedback loop
Expert Competence?"Sales data is gold standard?"Questions representative of established choice criteria?
Concluding Roadmap
Conjoint Analysis
Blogger Approach
Collaboration
Industrial Design Research
Hybrid Approach
Effectively determines key attributes which together make a desirable product
Use tastemaker that appeals to customer base for product selection and continuity of items
Outsource design process to capitalize on production advantages
Use as framework for understanding what customer perception of products are and to guide future designs
Provides deep insight into customer needs and behavior; allows for feedback loop through validation
Next Steps
Need to clearly define current customer base versus desired customer base
Implement an iterative learning cycle into product
selection
Set up in-house or local design and
prototype capabilities
References
Agarwal, N., Liu, H., Tang, L. and Yu, P.S. (2012) Modeling blogger influence in a community, Social Network Analysis and Mining, Vol. 2(2): 139-162"!Ahuja, G. (2000). “Collaboration Networks, Structural Holes, and Innovation: A Longitudinal Study.” Administrative Science Quarterly. Vol. 45, No. 3, pp. 425-455"
Blijlevens, J., Carbon, C.-C., Mugge, R., & Schoormans, J. P. L. (2012), "Aesthetic appraisal of product designs: Independent effects of typicality and arousal." British Journal of Psychology, 103, pp. 44–57."!Blijlevens, J., Creusen, M., & Schoormans, J. (2009), "How consumers perceive product appearance: The identification of three product appearance Attributes." International Journal of Design, 3(3), pp. 27-35. "!Breidert, C., Hahsler, M., & Reutterer, T. (2006), "A review of methods for measuring willingness-to-pay." Innovative Marketing, 2(4), pp. 8-32. "!Bryman, A. (2012). Social Research Methods. 4th edn. Oxford: Oxford University Press."!Carlson, K. A. & Bond, S. D. (2006). Improving Preference Assessment: Limiting the Effect of Context Through Pre-exposure to Attribute Levels. Management Science, 52(3), 410-421.
References
Clemen, R. T. and Winkler, R. L. (1993). “ Aggregating Point Estimates: A Flexible Modeling Approach,” Management Science, Issue 39 No 4, pp. 501-515."!Edwards, W. & Fasolo, B. (2001). Decision technology. Annual Review of Psychology, vol 52, pp 581–606."!Fischhoff, B. (1991). Value elicitation: Is there anything in there? American Psychologist, 46, 835-847. "!Hsu, C., Lin, J.and Chiang, H. (2012) The effects of blogger recommendations on customers’ online shopping intentions, Internet Research, Vol. 23(1): 69-88"!Hung, K.H. and Li, S.Y. (2007) The influence of eWOM on virtual consumer communities: social capital, consumer learning, and behavioral outcomes, Journal of Advertising Research, Vol. 47(4): 485-495 "!Jap, S. (2001). “’Pie Sharing’ in Complex Collaboration Contexts”. Journal of Marketing Research, Vol. 38, No. 1 (Feb., 2001), pp. 86-99"!Kotler, P. and Keller, K.L. (2012). Marketing Management. 14th ed. Pearson."!Kozinets, R.V. (2002). The Field Behind the Screen: Using Netnography For Marketing Research in Online Communities. Journal of Marketing Research, 39 (February), 61-72.
References
Kozinets, R.V. (2002). The Field Behind the Screen: Using Netnography For Marketing Research in Online Communities. Journal of Marketing Research, 39 (February), 61-72."!Liebowitz, J. (2001). Knowledge Management – Learning from Knowledge Engineering. Florida: CRC Press LLC. "!Porter, M.E. (2008). “The Five Competitive Forces that Shape Strategy”. Harvard Business Review, January: 78-93"
Ricardo, D., (1817). “The Principles of Political Economy and Taxation”. London, John Murray"!Sandelowski, M. (2002). Combining Qualitative and Quantitative Sampling, Data Collection, and Analysis Techniques in Mixed-Method Studies. Research in Nursing & Health. Volume 23, Issue 3, pp. 246-255"!Seale, C. (1999). Quality in Qualitative Research. Sage Publications. Qualitative Inquiry, Volume 5 Number 4, 1999 465-478"!Shanteau, J. (1992). Competence in experts: The role of task characteristics. Organizational Behavior and Human Decision Processes. Volume 53, Issue 2, November 1992, Pages 252–266
References
Simon, H. (1987). Making Management Decisions: the Role of Intuition and Emotion. Acad Manage Perspect February 1."!Tashakkori, A. and Teddlie, C. (1998). Mixed Methodology – Combining Qualitative and Quantitative Approaches. London: SAGE Publications. "!Ustuner, T. and Holt, D. B. (2009) Toward a Theory of Status Consumption in Less Industrialized Countries, Journal of Consumer Research , Vol. 37, No. 1 (June 2010) , pp. 37-56"!Uzzi, B. and Spiro, J. (2005) “Collaboration and Creativity: The Small World Problem” American Journal of Sociology, Vol. 111, No. 2 (September 2005), pp. 447-504"
Wu, C.M. (2011) How quality influence user’s continuance of the recommendation blog, Key Engineering Materials, Vols 474-476: 1132-1136