Damaging brands through market research: Can customer involvement in prediction markets damage brands?

The purpose of this paper is to investigate the possibility of using the new marketing research tool of prediction markets (PMs), which integrates customers to into the marketing research process. The research questions are: does taking part in PMs influence customers’ brand perception? Is there a danger of damaging a brand through this tool?

The paper uses a series of five short-term (less than one hour) and five long-term (three weeks) experimental online PMs where customers are integrated into marketing research and apply a series of online-surveys before and after taking part as virtual stock market traders. Subjects of research are taken from the sporting goods industry.

The paper shows that PMs can be used by marketing researchers without the danger of damaging the brand of the products that are subject of the PMs, although customers are being integrated to improve the markets’ forecasting accuracy.

The study's subject are medium priced sporting goods only. Possibly in other product fields, results may differ. Thus, the authors see a field for further research in this limitation.

Managers for marketing intelligence have more reason to make use of the efficient and rather new tool, PMs. Marketers can potentially improve their forecasting accuracy by integrating customer information into their reports. In addition, the authors see a high potential in the area of innovation management as well.

There has been no research on perceptions of PMs and brands at all so far.