Characterizing the Virtual Community

By Ursula Markus, SAP AG – September 12, 2002

German version

Döring confirms the existence of different types of community: "The widely accepted definition of virtual communities would suggest different typologies. Virtual communities can be classified on the basis of the Internet service in which they are established, the subjects and tasks they deal with, or the role they play in the lives of their members, for example."

The literature available on this subject discusses a variety of approaches to classifying virtual communities, such as member behavior, the community's purpose, or the motives that prompt its members to participate in it.

This characterization is based on the existing divisions but also attempts to provide a framework for establishing divisions that are as clear cut as possible, without potential for overlaps. At the top level of the structure, a distinction is made between social, professional, and commercial orientation community types. These types can be broken down further as shown in Figure 1.

Characterizing the Virtual 
                    Community

Figure 1: Characterizing the Virtual Community

 

Social Orientation

Socially-oriented virtual communities are the original community type from which all other community types have evolved. This type is subdivided further into the "relationship building" and "entertainment" types.

Relationship Building

The main objective of establishing a relationship to other members of a virtual community is prompted first and foremost by a common personal interest resulting from geographical proximity, demographic similarity, or a common hobby, for example. The individual member is usually interested in the group as a whole, in other words, the commitment to the group is much stronger than with other community types.

An example of this category is "SeniorNet" (www.seniornet.org):

  • Established: 1986;
  • Objective: To bring together adults 50+ by means of computers and the Internet ("Mission Statement": "[...] sharing of life experiences is an important component […]");
  • Commitment: Demographic similarity;
  • Meetings: Both virtual and real;
  • Special features: Defined limitations as 50 years is the minimum age for membership.

SeniorNet is a good example of a virtual community with close social ties that extend into real life; this community also has certain special features (partly as a result of its relatively long history): Within the virtual environment, the members have already "moved" several times with their community. A small compact group has developed into a large community with more than 39,000 members at present and numerous sub-communities; although the main objective is relationship building, SeniorNet also offers opportunities for entertainment and joint learning, for example.

Entertainment

Participating in virtual communities that focus on "entertainment" is the same as pursuing a hobby. These entertainment communities might be adventure or game environments or just popular chat rooms. This type of community is more geared toward the individual members rather than the group. Relationships can also be built in virtual entertainment communities, although the main reason for entering this type of community is the quest for entertainment and diversion.

A successful "multiplayer" game community is "Ultima Online" (www.uo.com):

  • Established: Approx. 1997;
  • Objective: Role-playing in a medieval environment;
  • Commitment: Relationship with other players; fee based; logon required every 7 days.
  • Meetings: Mainly virtual but also real-life events;
  • Special features: Players must pay to participate, either each time they play ("pay as you play") or once a month for unlimited access.

Ultima Online is a good example of how a computer game used as a standalone version on home PCs has evolved into a lively virtual community on the Internet; it now boasts 200,000 paying members who play for an average of 12 hours a week. Although Origin Systems, the producer of Ultima Online, experienced substantial losses in the past, the game is currently enjoying considerable success, which Origin Systems attributes to regular feedback on current development activities for members, improved community functions within the game, real meetings between the members, and surveys to assess the mood in the community.

 

Professional Orientation

A professionally-oriented virtual community is geared toward professionals and/or discusses subjects from a professional environment. Professionals participate in this type of community in order to contact and exchange information with people outside of their own team or organization who require similar information to carry out their (professional) duties.

This type of community also includes "knowledge communities", which form the basis for virtual knowledge markets. The members of these knowledge communities take on the role of both "knowledge companies" that make their own knowledge available within the community and "knowledge customers" that seek the knowledge of others. This virtual knowledge market can only work if the supply and demand for knowledge is simultaneous. A special form of knowledge community is the "community of practice" concept described in the following section on expert networks. The objective of this concept is also to exchange knowledge.

Professionally-oriented virtual communities can be subdivided into two categories: "Learning networks" – for acquiring knowledge in a new subject or area of interest – and "expert networks" – for expanding, developing, and documenting existing (expert) knowledge.

Learning Networks

Professionally-oriented virtual communities can be found in the areas of education and training if learning is shifted to the virtual environment and member authentication is required to enter the community. The common interest is learning per se or the selected subject matter – the fundamental characteristic of virtual communities.

An example of a learning network is the virtual education network within the German university community for information systems/business informatics: "Winfoline" (winfo.uni-goettingen.de):

  • Established: 1997;
  • Objective: Education network within the German university community set up by four universities for information systems/business informatics.
  • Commitment: Users can only follow the exam-related curriculum by reading the lecture notes and solving (interactive) tasks in the virtual education network.
  • Meetings: Mainly virtual; real meetings between students can take place at one of the four universities.
  • Special features: Defined limitations, since only students that are registered at one of the four universities are allowed to log onto the system and are registered with unique user names.

An interesting point here is the fact that Winfoline is classified as a "virtual learning" or as a "virtual education product" but that a virtual community has to be set up in more and more cases to optimize the complete product. The benefits of studying on the real university campus – forming study groups, being able to ask the professor questions during the lecture, and bumping into other students in the campus cafe – can be matched by the discussion forums, chat rooms, and teletutors offered on the virtual campus. The discussions on individual knowledge areas are still restricted to the semester in which the particular student is taking an exam in Winfoline. This time horizon, and thus the membership of a community member, can also be extended, however, by adding further education-based contents and services – such as establishing contact with companies to find placements or jobs.

A further example of learning networks is the in-house training programs (virtual "corporate universities") that are being set up more and more as joint ventures between companies and universities in order to provide employees with the precise skills and knowledge they require to carry out their tasks. These programs are often complemented by functions that support the setting up of an in-house expert network (explained in the following section).

Expert Network

The second category of professionally-oriented virtual community focuses on forming a network of experts for a particular subject. This also involves acquiring and developing knowledge, although this takes place informally and only as a result of initiative taken by the individual. As already explained with reference to a professionally-oriented community, an expert network can be formed in house and across a department or company.

The Linux community (www.linux.org) is an example of a cross-organization virtual community of software experts:

  • Established: 1991 by Torvalds;
  • Objective: Joint development of an operating system; features of a software community: exchange of ideas, methods, tools, and program codes;
  • Commitment: Internationally high level of commitment and cooperation in spite of certain differences in the individual objectives and experiences and no monetary compensation for the development effort;
  • Meetings: Mainly virtual;
  • Special features: Implicit restrictions on participation because software development expertise is required.

The special feature of the Linux community is that experts do not only exchange their knowledge on software development but actually use this knowledge to develop a collective product – without any commercial interests. An important point is that the virtual Linux community was not widely accessible to software developers until the end of the nineties when it was made possible via the Internet. Linux and similar open source projects are regarded as communities with relatively low commitment, but are united by strong common values, however, such as the belief that software should be developed freely and openly. They are a good example of the statement made by Hagel/Armstrong that the attractiveness of a virtual community depends on the quantity and quality of the contents generated by its members. This explains why open source communities are often referred to as a type of "gift economy" or "gift culture", in which parts of the software, knowledge, or problem solutions are made available to the entire community for free. The risk here is that other members who have not contributed to the project will benefit from the collaborative effort.

An IT-based "community of practice" is also part of the expert network category. A community of practice is not a virtual network as such. It simply refers to an informal group that organizes and manages itself and achieves self-defined purposes. The popularity of this term goes back to Wenger, who sees in it the potential for generating value added by means of informal processes in a company of the information age. If the knowledge exchange and meetings between the participants are computer supported and a community is established across various geographical locations, this is a virtual community of practice.

 

Commercial Orientation

Rather than being "socially motivated", "commercially-oriented" communities aim to make a profit or gain a financial advantage. The decision as to whether a commercially-oriented virtual community is a success or failure can be measured by profit-oriented factors, such as whether the community has generated sales – directly or indirectly – or whether savings have been made in other specified business activities. Performing business transactions is not one of the core functions of a virtual community. If the virtual community and the virtual shop offering are combined, products sold online cannot be uniquely assigned. The success and the sales volume are either attributed to the sum of both concepts or just to marketing (standard procedure in the past); the virtual community is classified as a marketing tool that generates costs, which has been developed to meet the need to keep up with the times and remain competitive. The commercially-oriented community type is subdivided into the categories "business-to-business" and "business-to-consumer".

Business-to-Business

In the category "business-to-business", virtual communities are set up first and foremost to support supply chains or collaboration between companies within a common geographical area. The participating companies aim to develop common strategies and find suitable business partners in order to accept or assign profitable orders. Virtual companies can be distinguished from "electronic marketplaces" in that marketplaces focus on performing transactions, while virtual communities involve a long-term collaboration concept across various business areas.

A typical example of a community set up to support a supply chain is "SupplyOn" (www.supplyon.com):

  • Established: 2000 (Established by: Robert Bosch GmbH, Continental AG, INA Wälzlager Schaeffler oHG, SAP AG, ZF Friedrichshafen AG);
  • Objective: To bring together vendors in the automotive industry in order to jointly develop applications for purchasing, engineering, and logistics.
  • Commitment: Driven by strategic decisions and commercial advantages; members enter into contractual business relationships.
  • Meetings: Real meetings take place after virtual agreements have been made.
  • Special features: The functions include entering company profiles, a central business directory structured by classification and product group, virtual negotiation rooms for communicating and negotiating quotations, and discussion rooms for relevant logistics questions.

SupplyOn describes itself as a marketplace, as testified by the fact that order processing and order fulfillment are supported by the system. The described network is nevertheless assigned to the category "virtual community", since a distinction can be made between a system for processing individual contracts and a system for forming strategic partnerships and realizing common interests. As regards their implementation and objectives, the two systems must be considered separately in order to reach the optimum performance level.

Business-to-Consumer

Virtual communities in the "business-to-consumer" category are developed primarily to support a product or brand. They are used as tools to acquire and retain new customers, thereby reducing the marketing costs. They aim to boost sales figures and enable cost-effective market analyses and segmentation. Customers (members) of these communities can be offered a variety of options, such as:

  • Communication rooms for discussing company services or brands,
  • Virtual sales or auction rooms for private property,
  • (Automatic) notification of new products,
  • Special product or price offers for community members.

The brand community "LEGO" (www.lego.com) is an example of a "business-to-consumer" virtual community:

  • Established: 2000;
  • Objective: To provide a platform for LEGO enthusiasts to exchange information and ideas;
  • Commitment: Option of presenting own models, having pictures of the models published and entered in competitions;
  • Meetings: Virtual presentation as avatar;
  • Special features: Coexistence of the manufacturer's official platform and numerous unofficial LEGO communities.

The LEGO community is a commercially-oriented virtual community that was set up to enable the existing interaction between LEGO fans to be monitored and controlled more effectively on the Internet. The offering of the official LEGO club includes a section called "Fair Play", which provides unofficial LEGO Web pages with guidelines on "Copyrights", "Trademarks", and other legal conditions. At the end of 1999, the LEGO group founded the subsidiary LEGO Direct in order to improve global customer communication. From the start, LEGO Direct sought contact with the many existing LEGO communities. In the meantime, "Lugnet" (www.lugnet.com), the largest unofficial LEGO community, has set up a newsgroup in which LEGO employees can answer questions from community members (see Figure 2).

Posting from LEGO Direct in the Lugnet 
                    External Virtual Community

Figure 2: Posting from LEGO Direct in the Lugnet External Virtual Community

It is interesting to note that the response (which was unpredictable) to the company's intervention in the external virtual community was extremely positive. This shows that the members feel very comfortable in their dual role: on the one hand, as a private enthusiast, on the other hand, as customers interested in interacting with the "manufacturer of their hobby."

 

Conclusions

The community type must be identified and defined in order to enable optimum organization and management of the functions and contents of a virtual community. The greater the commercial interest of the members participating in a virtual community, the lower their level of commitment, since a more attractive offer from a competitor can quickly bring about a change of allegiance. Members of professionally-oriented virtual communities also have a low level of commitment to a particular community, since they are usually members of several communities on one subject area in order to build an extensive information base. By consulting a larger information offering in several virtual communities, the time that members spend in each individual community is reduced, as is their allegiance and the level of commitment. Operators of professionally and commercially-oriented communities, therefore, have to provide their virtual community with unique features that distinguish them from competitor communities in order to increase the level of commitment and the time members spend in the communities.

 

Bibliography

  • Döring, N.: Identitäten, Beziehungen und Gemeinschaften im Internet, in: Batinic, B. (Hrsg.): Internet für Psychologen, Hogrefe, Göttingen 1997
  • Hagel III, J.; Armstrong, A. G.: Net Gain – Profit im Netz: Märkte erobern mit virtuellen Communities, Gabler, Wiesbaden 1997
  • Schmidt, M. P.: Knowledge Communities – Mit virtuellen Wissensmärkten das Wissen in Unternehmen effektiv nutzen, Addison-Wesley, München 2000
  • Torvalds, L.: Der Pragmatiker der freien Software, in: O'Reilly & Associates (Hrsg.): Open Source – kurz & gut, O'Reilly, Köln 1999
  • Wenger, E.: Communities of Practice: Learning, meaning and identity, Cambridge University Press, Cambridge, 1998

 

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