The co-creative consumer

‘The co-creative consumer’

Exploring the changing consumer/producer relations

and consumer roles in modern product innovation practices

Literature review

Date: 16th March 2011 Revised: 18th April 2011 Course: ECH-80424 Programme: MME Student: Joyce van Dijk Reg.nr: 841018208030 Supervisor: Prof. Dr. Gerrit Antonides Institution: Wageningen University Final grade: 9 (out of 10)

‘The Co-creative Consumer’, by Joyce van Dijk page 2

Table of Contents

Executive Summary ............................................................................................................................. 3

1 Introduction ................................................................................................................................. 6

2 Developments towards consumer co-creation ........................................................................... 7

2.1 Individualisation and consumer-centric firms ..................................................................... 7

2.2 Consumer empowerment through Web 2.0 ....................................................................... 8

2.3 Open innovation .................................................................................................................. 8

2.4 Co-creation of value ............................................................................................................ 9

3 Consumer roles in innovation processes ................................................................................... 10

3.1 The Insight Provider........................................................................................................... 11

3.2 The Customiser .................................................................................................................. 11

3.3 The Ideator ........................................................................................................................ 12

3.4 The Co-creator ................................................................................................................... 13

3.5 The Creator ........................................................................................................................ 15

4 Exploring the co-creative consumer .......................................................................................... 17

4.1 Characteristics of the co-creative consumer ..................................................................... 17

4.2 Consumer motives to co-create ........................................................................................ 19

5 Challenges for the firm .............................................................................................................. 21

Conclusions ........................................................................................................................................ 25

Limitations and suggestions for further research ............................................................................. 27

References ......................................................................................................................................... 28


Executive Summary

Nowadays, value creation no longer stems from merely inside the firm. Contributions of consumers

are integrated throughout innovation practices and they have become a source of competitive

advantage. This development is coined ‘co-creation’ in 2000 by Prahalad and Ramaswamy (2004a).

The new business paradigm is to create and maintain an active dialogue with consumers and using

them as open-innovation resources (Prahalad & Ramaswamy 2004a). Traditional consumer/producer

relationships have changed. While consumers were traditionally viewed as value exchangers and

extractors, they are now considered a source of value creation and competitive advantage.

This paper defines co-creation as: “Purposive and intentional collaboration between

consumers and producers, where they systematically interact, learn, share information and integrate

resources with the result of co-creating value”.

To unravel this paradigm shift, this paper explores the developments that lead to co-creation

and the changing consumer-producer relationships. It combines findings from different academic

fields, such as management, marketing and sociology, to provide a coherent overall view.

This paper offers a new perspective by identifying the various roles that consumers can take

on in modern innovation practices. These roles are based on level of autonomy and influence in co-

creating value. The roles are linked to practical cases, in order to illustrate their use and relevance.

With this perspective the concept of co-creation becomes more tangible and is placed within a

broader context.

Developments leading to co-creation

To better understand the concept and the elements that make up the definition, it is necessary to

look at the developments that influenced and stimulated co-creation.

The starting point is the societal process of individualization, which really set off around the

1980s. Consumers started focusing on expressing individual preferences through consumption

choices. In accordance with this, firms started to become consumer-centric, offering customized

services and products to appeal to individual needs.

The development of Web 2.0, around 2006, is another important development that

facilitated co-creation. The internet became an interconnected platform of web applications and

allowed people to create and change content. This empowered consumers to navigate and shape

their own consumption environment. The current generation of consumers is empowered, informed,

influential, creative, interactive and assertive.

Web 2.0 has made effective advertising increasingly difficult due to the large amount of

‘media clutter’ consumers are exposed to. To successfully draw and retain attention in this highly

competitive new world, firms have to be able to stand out. Traditional ‘closed’ innovation processes,

made way for ‘open innovation’ in pursuit of better and faster use of ideas. Firms increasingly

involved consumers in open innovation practices.

The roles of the company and the consumers converge and they become collaborators in ‘co-

creation’ of value. The basis for the added value can be found in the co-creation process itself;

consumers and firms interact collectively, provide inputs and exchange knowledge. The traditional

production chain is reshaped into a dynamic network mechanism where consumers are continuously

learning, interacting with producers and sharing ideas.


Consumer roles in innovation

This section of the paper focuses on identifying and distinguishing between different roles consumers

play in a firm´s innovation process. Consumers can take on and switch between these roles according

to the purpose and intention of the collaboration. The roles are based on the level of consumer

creativity, involvement, and autonomy in the innovation process.

The first role is that of ‘insight providers’, which is characterized by a low level of (direct)

consumer influence and autonomy in the innovation process. Consumers are merely sourced by

firms to gain insights, identify needs or evaluate ideas.

In the role of ‘customizer’ the consumer has a direct influence in the final stages of product

development; adapting and selecting a predetermined set of product features that fit their own

preferences. Consumers can create value individually but only up to the extent to which the firms’

value chain supports this.

The role of ‘ideator’ is the next step towards an active consumer role in innovation practices.

Here, consumers are collectively addressed by firms to provide their creative input and innovative

products ideas. The results will finally become intellectual property of the firm and will be used as

inspiration for innovation.

The role of ‘co-creator’ involves actual open innovation, where firms collaborate with

consumers and use their skills and knowledge in developing new products. Co-creation can involve all

phases of the innovation process; idea generation, design and engineering and finally the test and

launch phase. It often takes place in an online community, which provides a constant platform for

interactive dialogues between participants. Co-creation is an ongoing process of learning, developing

and evaluating ideas together. In the role of ‘co-creator’, consumers’ skills and knowledge are

directly integrated in the business process. However, consumers can also integrate their skills and

knowledge more independently, as long as firms facilitate this. ‘Co-creation of experiences’ is the

most advanced level; every time a product is used consumers co-create their own consumption

experiences. This shows the wide range of possibilities and applications of the term.

The final role that is defined is that of the ‘creator’; where innovation is initiated and driven

by consumers themselves. Here, consumers act as involved and independent value creators. Their

ideas can strongly influence the rate and direction of innovations in some industries.

Exploring the co-creative consumer

Despite the variations in role and task type, literature defines certain characteristics that distinguish

the co-creative consumer from the passive consumer. Co-creative consumers are often pro-active

lead-users, who have insights into future needs. They possess relevant technical and social skills, and

have a solid base of product knowledge. These lead-users are highly involved in the product category

and interested in developing new products. Their contributions are often high in quality and

relevance. Nevertheless, it can be useful to involve non-lead-users as well, to ensure relevance for

the broader target group.

Consumers are driven to participate in co-creation for various motives such as: enjoyment,

empowerment, social interaction, self-expression, peer recognition, altruism and for information

seeking purposes.


Challenges to successful co-creation

Identifying and involving the right participants, consumers as well as people from the firm, is

challenging but crucial in order for effective results.

Consumers willingly participate in value creation mainly driven by intrinsic motivations. They

enjoy the process and get a feeling of satisfaction and empowerment by contributing. This

enjoyment is closely related to the social interactions and recognition they receive for their

contributions. To retain consumer interest and involvement, firms should stimulate these

interactions and appeal to intrinsic motivations.

There are many benefits of successful co-creation, but these can only be achieved if co-

creation principles are applied correctly and are integrated throughout the business process. This

requires firms to adapt their processes and mindset in order to effectively engage in co-creation.

Firms should become more open and willing to integrate external sources in their innovation process.

They should listen to and observe their target group, determine main objectives for co-creation, and

identify and involve appropriate co-creation partners. When it comes to managing the co-creation

process, firms have to be able to find the right balance between freedom and control. They should

stimulate a collaborative culture and allow for rules to evolve from within the community.


1 Introduction

The Pepsico ‘Maak de Smaak’ campaign for the brand Lay’s is an example of a successful idea contest.

Drawing on the idea that Dutch people like to meddle and voice their opinion, the firm sent out an open call

asking people to send in ideas for a new Lay’s potato chips flavor. The cross-media campaign resulted in

almost 680,000 submissions, far more than the 375,000 the company expected. A jury headed by a well-

known Dutch top chef cook, selected three finalists. The crowd of consumers could then vote for their

favorite, resulting in another 220,000 responses, and the winner ‘Patatje Joppie’ was announced on

television. The new flavor is now part of Lay’s Limited Edition product range. (Lay’s, 2010)

An idea contest is just one of many initiatives in the last decade where firms actively involve

consumers in new product development. This involvement is often met with great enthusiasm and

interest on the consumer’s behalf. The general development of integrating consumers in innovation

practices is coined ‘co-creation’ in 2000 by Prahalad and Ramaswamy (2004a). It underlines that

value creation no longer merely stems from inside the firm. The new business paradigm is to create

and maintain an active dialogue with consumers and use them as open-innovation resources

(Prahalad & Ramaswamy 2004). The consumers’ ability to create value is now recognized and

consumer input is integrated throughout the innovation process.

Involving consumers in value creation is not an entirely new development. Around the 1950s,

the consumer was already often put to work in an effort to enhance efficiency and to reduce costs

(Ritzer & Jurgenson, 2010). Tasks formerly done by the producer were moved to the user’s side by,

for example, implementing self-service counters, electronic check-in kiosks, or offering self-assembly

products. In 1980 Alvin Toffler already predicted that ‘prosumption’, a combination of the words

‘production’ and ‘consumption’, was to become the new paradigm (Ritzer & Jurgenson, 2010).

To unravel this paradigm shift, this paper firstly explores the developments that lead to co-

creation and the changing consumer-producer relationships. It combines findings from different

academic fields, such as management, marketing and sociology, to provide a coherent overall view.

This paper offers a new perspective by identifying the various roles that consumers can take

on in modern innovation practices. These roles are based on level of autonomy and influence in

creating innovation value. The roles are linked to practical cases, in order to illustrate their use and

relevance. With this perspective the concept of co-creation become more tangible and is placed

within a broader context.

To better understand what type of consumers are involved in co-creation and what drives

them, some key characteristics and motivations for participating are explored. The paper concludes

by addressing some prerequisite conditions and challenges firms face in order to be successful at co-

creation.


2 Developments towards consumer co-creation

Taking the literature into account, this paper will focus on co-creation defined as follows (based on

Prahalad & Ramaswamy, 2004; Füller et al, 2010; Bartl et al. 2010):

Purposive and intentional collaboration between consumers and producers,

where they systematically interact, learn, share information and integrate

resources with the result of co-creating value.

To better understand the concept and the elements that make up the definition, it is necessary to

look at the main developments that influenced and stimulated co-creation. These developments are:

individualization and consumer-centric firms, consumer empowerment through Web 2.0, and open

innovation. These aspects are discussed separately throughout the next sections and the chapter is

concluded with a section about co-creation of value.

2.1 Individualisation and consumer-centric firms

Around the 1940s, mass production set off allowing a wide availability of consumer products.

Throughout the years the seller’s market evolved into a buyer’s market as goods became abundantly

available. It became difficult for consumers to perceive differences between products of a similar

range of quality, and therefore they opted for the lowest possible price. This resulted in price erosion,

stimulating firms to reduce costs and in turn increasing consumers’ focus on price (Poiesz & Reijnders,

2010).

As this made it more difficult for firms to compete on product offering, they started focusing

on catering to consumer needs. This was done by targeting specific market segments based on e.g.

demographic, geographic, behavioral and psychographic characteristics (Kotler, 1991, in Piller,

2010a). In a constant effort to create competitive advantages, this segmentation process was

continuously refined and finally replaced by the notion of ‘customer orientation’ (Piller, 2010a). This

development is strongly related to individualisation processes in society that became really

prominent after the recession of the 1980s. Symbolic expression of choices and personal identity

became more important to consumers than the product itself (Corrigan 1997, in Van Dijk 2010).

Mobility increased, social classes became interwoven and the level of discretionary income rose.

Consumers spent more money on consumer goods and selected products that fitted their individual

preferences to emphasize sovereign power (Van Dijk, 2010).

In accordance with this individualisation, firms started offering customised products. This

changed the structure of the firm, which was no longer centred on products, but on consumer needs.

It also changed distribution channels and logistics, because firms wanted to deliver products

according to the time of order (Piller, 2010a). Vargo and Lusch (2004) describe this as the ‘service

dominant logic of marketing’, where firms shift their focus from a goods-centered logic, to a service-

centered logic. Consumer centricity became more important than efficiency in production and

distribution (Mirchandani, 2005; Van Dijk, 2010; Prahalad & Ramaswamy, 2004a, Cova & Dalli 2009,

Vargo & Lusch, 2004).

With customisation consumers gained control over their consumption activities and felt

empowered. They could influence the production process to a certain extent and create products

that matched their preferences (Piller, 2010a). Consumption goals changed from being transactions

to being personalised ‘holistic experiences’ which enabled self-fulfilment and enjoyment (Pine &

Gillmore, 1991, in Van Dijk, 2010).


2.2 Consumer empowerment through Web 2.0

Over the last decades, the internet has undergone some major developments. Around the year 2000

e-commerce made the internet into a new platform for buying and selling consumer goods. Last year,

up to 67% of Dutch people have purchased products or services online (Eurostat, 2010). Another

significant change in the online consumption environment took place around 2006, when the

internet grew into an interconnected platform of web applications. Consumers started using the

internet as a means of communication, instead of merely a platform for gathering information,

selecting and purchasing products. In the Netherlands, 76% of all people now use internet on an

almost daily basis (Eurostat, 2010). This new era of internet use was termed ‘Web 2.0’ by Tim O’Reilly

(2007). The difference between the initial phases of the internet (Web 1.0) is that people can now

create, add and change content themselves by means of ‘open source’ software. People became

more able to shape and navigate their consumption environment (Addis & Holbrook, 2001; Gabriel &

Lang, 2008 in Van Dijk, 2010). Bruns (2007) calls this ‘produsage’ - a combination of ‘production’ and

‘usage’- changing the traditional value production chain that starts with the firm and ends with the

consumer.

Nowadays consumers are part of the collaborative production environment and boundaries

between usage and production of content are blurring (Bruns, 2007). Consumers enjoy being able to

control and create content as it enables them to express their self-identity (Füller, 2010). As a result

of these developments, they have grown more resistant to corporate control (Ritzer & Jurgenson

2009). The current generation of consumers are empowered, informed, influential, creative,

interactive and assertive. Web 2.0 is now a mainstream trend and competing with established

entities in news, media, entertainment and art (Cova & Dalli, 2009). People use websites, blogs,

forums or social media sites to voice their opinion on products worldwide. Eurostat research (2010)

shows that as much as 80% of European adolescents use online social media such as Facebook and

Twitter.

This active voicing and worldwide connectedness transforms consumers into powerful

influencers (Van Belleghem, 2010). Their opinions and evaluations can affect brand value and

influence market value of products.

2.3 Open innovation

Web 2.0 has made effective advertising increasingly difficult due to the large amount of ‘media

clutter’ consumers are exposed to (Face Agency, 2009). People are better informed and have

developed a sceptical attitude towards marketing communications and claims about product

performance (Van Belleghem, 2010).

To successfully draw and retain attention in this highly competitive new world, firms have to

be able to stand out. It is crucial for producers to continuously come up with and explore new ideas

in order to develop and market innovative products (Hargadon & Sutton, 2000). Traditional ‘closed’

innovation processes, made way for ‘open innovation’ in pursuit of a better and faster use of ideas.

Firms now often engage in open innovation practices, they collaborate with external parties such as

technology providers and knowledge institutions to co-develop new products.

For many of the same reasons, firms also increasingly involve consumers in innovation

practices (Bughin et al., 2008; Prahalad & Ramaswamy 2004; Piller & Ihl, 2009). Web 2.0 allows for

quick and direct access to a diverse target group. According to Piller and Ihl (2009), many

commercially important products are even initially based on ideas from innovative consumers rather

than firms.


2.4 Co-creation of value

The current generation of active, creative and empowered consumers promotes the development of

consumer integration throughout the value chain. In the US, 61% of all online adults are willing co-

creators, and are open to co-creating across a large range of industries (Forrester Research, 2010).

Firms play on this and actively involve consumers in improving and renewing product offering to

create a competitive advantage (Anderson, 2009 in Ritzer & Jurgenson, 2009). Co-creation is

becoming a new business paradigm and can be considered one of the most promising areas of

development in the virtual consumer environment (Füller et al., 2010).

The basis of the added value can be found in the co-creation process itself; consumers and

firms collectively interact, provide inputs and exchange knowledge. This results in a constant process

of learning, creating and developing ideas (Lusch & Vargo, 2009).

In essence, co-creation differs from the more traditional ‘customer integration’ concepts

such as Toffler’s ‘prosumption’ (1980). Consumers are now engaged systematically, not selectively,

and their efforts are purposefully integrated in business processes (Rieder & Voss, 2010).

Instead of merely playing a role in value exchange and extraction, consumers are ‘co-creating’

value (Prahalad & Ramaswamy, 2004). The traditional production chain is reshaped into a dynamic

network mechanism where consumers are continuously interacting with producers, learning and

sharing ideas (Prahalad & Ramaswamy, 2004; Lusch & Vargo, 2009). Lusch and Vargo (2009) note

that co-creation doesn’t necessarily imply co-production and goes beyond product development.

They argue that core value is in the collaboration and the actual contribution to the final product is

relatively optional.

When used correctly, co-creation helps reducing research and development costs, enhances

output and opens new markets (Chesbrough & Schwartz, 2007). It creates a larger pool of available

information, which can increase effectiveness and speed of product development (Thomke & Von

Hippel, 2002; Piller & Ihl, 2009). Furthermore, co-creation can enhance retention and trust of

consumers and stimulate positive word-of mouth (Bilgram et al. 2010). In turn, consumers

experience a greater product relevance, since needs and preferences can be communicated directly

to the firm. Chapter 4 elaborates more on the benefits for consumers and their motivations for

participating in co-creation.


3 Consumer roles in innovation processes

According to the literature, co-creating with consumers is the new innovation paradigm. It can occur

for various purposes, in various contexts and within different levels of task complexity. The level of

involvement from both the firm as well as the consumer varies accordingly. In practice, the term ‘co-

creation’ is often generalized and labeled on various processes which require a certain level of

consumer input but not necessarily co-creation of value. This doesn´t only lead to blurring of the

definition in use, it also undermines the legitimate added value of the concept (Lansink, 2009).

This chapter focuses on identifying and distinguishing between the different roles consumers

can play in a firm´s innovation process. It helps to place ‘authentic’ co-creation within this context, by

analyzing the level of joint value creation and consumer influence. To link the conceptual roles to

practice, a number of recent cases are discussed for illustration1.

This paper presents a framework of modern consumer roles within innovation practices. This

framework is inferred from current practices and theories and offers a new perspective on consumer

influence on firms. The roles are connected to the level of consumer creativity, involvement and

autonomy in the innovation process. The roles range from ‘insight providers’ --where consumers are

merely sourced by firms for information about needs or evaluation purposes-- to ‘creators’, where

innovation is initiated and driven by consumers themselves (see figure 1). Consumers can take on

and vary between these roles according to the purpose and intention of the collaboration. The next

sections will elaborate further on these roles.

Figure 1: Consumer roles in innovation practices according to level of influence and autonomy. The cases provide practical

examples of different consumer roles in product innovation.

1 The suggested roles are case specific and cannot be generalized or considered typical to the brands discussed in the

examples.


3.1 The Insight Provider

The role of ‘Insight Provider’ is characterized by a low level of (direct) consumer influence and

autonomy in the innovation process. It resembles traditional market research, where little innovative

input is expected from the consumer. Tasks are firm-initiated and controlled and often aimed at

getting consumer feedback and validation of new concepts, product ideas or trends. For the role of

‘insight provider’, all types of consumers can be addressed, from intensive users, to occasional users

and even non-users.

With Web 2.0 research methods have developed rapidly allowing for a modern style of

market research. New technologies enable efficient analyses of open-ended questions using larger

consumer samples. Texts can now be analyzed through ‘text mining’ methods and ‘semantic

analyses’, quickly uncovering symbolism and identifying differences in behavioral patterns (De Ruyck,

2009). Furthermore, research companies are more often engaging in longer term dialogues with the

respondents --instead of merely presenting questionnaires-- in order to gain richer insights, feedback

and evaluations. These insights can also be gathered through online observational methods such as

‘netnography’, termed in 1997 by Kozinets (2002). Netnography is less time consuming, unobtrusive

and non-artificial as compared with traditional ethnography (Kozinets, 2002). The method allows

firms to immerse themselves in the consumers’ mind, without influencing them. Through observing

behavior and interactions on the internet, firms can get a sense of what consumers are experiencing

and talking about. It allows to uncover abstract issues such as symbolism, meanings and lifestyle

patterns (Kozinets, 2002).

A company applying the crowdsourcing method is InnoCentive. This company relies on ‘wisdom of the

crowds’ to find solutions for very specific scientific problems. They broadcast these problem statements

into their community of more than 160,000 experts, screen the submissions, and select the best fitting

solution (Piller, 2009; InnoCentive, 2011)

For the Beiersdorf brand NIVEA, HYVE conducted a netnography research project around sunless tanning.

Six relevant online communities were chosen to be analyzed and 3128 consumer statements coded. Based

on these statements, consumer insights reflecting problems such as “tanning disasters” or “de-tanning”

were derived. Later, in a collaboration of market researchers and designers, the insights were transferred

into innovative product concepts and suggestions for products communication (HYVE, 2006)

3.2 The Customiser

In the role of ‘Customiser’ the consumer has a direct influence in the final stages of product

development, adapting and selecting a predetermined set of product features that fit their own

preferences (Piller, 2009). An enormous variety of online options for customization are offered to the

consumer in almost every business (Prahalad & Ramaswamy, 2004). Due to modern technology and

the mainstream use of the internet, consumers pervasively interact with firms and are able to

communicate their preferred options (Piller, 2010). Firms adapt their production models to enable

variability while still managing to produce effectively and efficiently.

Customization often takes place in the assembly phase and allows consumers to use the

firm’s ‘building blocks’ in constructing their own product. Consumer can create value individually but

only up to the extent to which the firms’ value chain supports this. Customization does not allow a

direct integration of innovative ideas or creative solutions from consumers (Piller, 2009).

In contrast to co-creation, customization often does not comprise an interactive dialogue between

firms and consumers. It is mostly done through online toolkits with which consumers can


independently select and configure product options. Nevertheless, the information gathered from

customization processes can be analyzed and used indirectly by the firm as a source for innovation

(Piller, 2009).

Dell is often named as an example of a company that successfully introduced built-to-order techniques

(Prahalad & Ramaswamy, 2004; Piller, 2009; Piller, 2010). Consumers are presented with a basic model, and

then invited to customize aspects such as operating systems, software programs and colors.

Another example of adding value by offering customized options is NIKE’s online customization tool NIKEiD,

developed by R/GA Agency. NIKEiD allows people to design and customise NIKE products, from shoes to

team jerseys to equipment. Customers can adapt colours, patterns, tags and even performance features to

complement any athletes’ style of play. There is also a group application called ‘The Team Locker’ section,

where individuals or sports teams can enter, share and rate designs. (R/GA Agency, 2011)

3.3 The Ideator

Ideating is the next step towards an active consumer role in innovation practices. In the role as

‘Ideator’, consumers are collectively addressed by firms to provide their creative input and

innovative product ideas. Firms are in search of ‘wisdom of the crowds’, following the belief that the

aggregation of information provided by many different people produces better results than an

individual or expert would be able to accomplish (Surowiecki, 2004). This method is called

‘crowdsourcing’ (Jeff Howe, 2006 in Bartl et al., 2006) or ‘wikinomics’ (Tapscott, 2008 in Fuchs, 2008).

The results will become intellectual property of the firm and will be used as inspiration for innovation

(Brabham, 2008).

An increasingly popular method for ideation is the online idea contest, which focuses on a

specific task and takes place within a predefined time frame (Kelleher, 2011). These contest are often

open calls and can attract ordinary consumers, lead consumers as well as non-users. Often, an online

community platform is constructed where participants can discuss and evaluate the new ideas

proposed by others, creating a shared understanding. The process of learning together and creating

collective knowledge encourages members to improve and elaborate their ideas (Kelleher, 2011).

Design contests are co-creation in the sense that participants actively co-create brand meaning

within the community (Kelleher, 2011). Furthermore, these communities offer firms the possibility to

engage in a dialogue with their consumers, by actively participating as a community member and

discussing and evaluating concepts together. By doing so, firms can communicate their insights and

ensure that concepts suit the firms’ technical possibilities and match the desired brand strategy.

Ideation does not completely match the definition of co-creation, since it is often task-oriented and

integration of consumer resources is limited.

The company Redesignme provides a platform designed to connect firms to ‘ideators’. Firms can post their

challenges in an open call to the community of almost 7,000 creative consumers and designers. These

members can create their visual concepts via an online tool, or upload sketches, photos and videos. Other

community members can vote for the best design and provide feedback. The winning ideas are selected and

rewarded by the firms. (Redesignme,2011)

Doritos and Pepsi Max launched a large scale consumer contest in 2010 in the United States. They invited

fans to design their own commercials in a contest called ‘Crash the Super Bowl’; the winning commercials

were to be aired during the Super Bowl XLV on the 6th

February 2011. A website was launched with a

discussion forum, detailed information and judging criteria. People could vote for their favourite commercial

and, taking the votes in consideration, a jury selected six winning commercials out of 5,6000 submissions.

(Pepsico, 2011)


3.4 The Co-creator

The role of ‘Co-creator’ involves actual collaboration between firms and consumers and integrated

use of skills and knowledge in developing new products. Instead of consumers responding to ideas

and concepts from firms, here the focus is on offering room for the consumer to formulate and

communicate their own ideas. Co-creation can be accomplished on a one-on-one level, where

consumers collaborate with firms individually, but more often takes place in online communities. The

community participants consist of a selection of both consumers and experts from the firm, who are

engaging in an ongoing process of sharing, learning, evaluating, and developing ideas related to

future needs (Prahalad & Ramaswamy, 2004). In this joint collaboration firms can still monitor the

process, check compatibility of the concepts with brand strategy and provide a framework marking

out the firm’s technical possibilities. At the same time, consumers have a platform where they can

develop creative ideas together with peers.

Co-creation can involve all phases of the innovation process; idea generation, design and

engineering and finally the test and launch phase (Füller et al., 2006). There is a collaborative

evaluation and selection of the generated ideas from the first phase. The selection of ideas can then

be processed further in the design and engineering phase, where all participants can use their

creativity and skills. Firms facilitate this by providing ‘co-creation toolkits’ to equip consumers with

online applications that can be used to create solutions or build virtual prototypes (Bartl et al., 2010;

Füller et al., 2010). Sometimes users can even run simulations or actually create and try out their

products. User innovation toolkits range in level of technical sophistication and are more elaborately

explored in Piller and Ihl (2009). In the final test and launch phase, the participants can take on the

role of end user or buyer and evaluate the final product together (Füller et al., 2006)

Sara Lee’s Pickwick team co-created with consumers to develop the new tea ‘the Dutch Tea blend’.

Through the existing interactive community ‘Pickwick Gardens’, facilitated by social medium Hyves and

managed by Pickwick, members were asked to participate. The firm selected a group of 25 Hyves

members based on their level of active participation, creativity and expressive skills. This group co-

created with the Pickwick experts, both online and offline, to develop the new tea blend, co-design the

package and the marketing campaign. (Frankwatching, 2010). The ‘Pickwick Gardens’ community

expanded from 6,000 to 8,600 members within four months after the cross-media launch of the Dutch

Tea blend. (Hyves, 2011)

BMW has integrated its various co-creation projects into a holistic BMW co-creation lab to create a

long-lasting platform. The lab, enabled by the German innovation company HYVE, is a virtual meeting

place for individuals eager to share their ideas and opinions on tomorrow’s automotive world with

BMW. The multiple activities, tasks and integrated methods range from idea contests, user toolkits,

virtual concept tests, and innovation research studies up to lead user application forms. (Bartl et al.,

2010)


This paper argues that level of ‘joint value-creation’ should always be the measure for determining

whether consumer involvement can be termed ‘co-creation’. Taking this perspective as a starting

point, one can identify a broad array of levels and manners in which consumers act as co-creators.

To begin with, this paper recognizes that co-creators don’t necessarily have to be involved

throughout the whole innovation process. Nor do they always require a direct influence, dialogue

and interaction with the firm. Consumers can co-create and integrate their skills and knowledge also

more independently, as long as firms facilitate this. Figure 2 illustrates this and focuses on specific

aspects in the consumption cycle; such as design, usage and experience. The practical examples show

that applications of co-creation can vary a lot in type and purpose. Nevertheless, the overall focus

remains on consumer-centricity and co-creation of value.

Figure 2: Examples of co-creation within separate dimensions of consumption

Co-creation in ‘Design’, the first block in Figure 2, can be considered as the next step in customization,

offering a lot more degrees of freedom and a greater level of consumer influence. In the cases of

Threadless and IKEA (see italic text below this paragraph), customers can now use their creativity

quite freely in designing products, without engaging in actual dialogue with the firm. With modern

technology and consumer-driven insights, firms can create relatively easy-to-use design tools that

allow high levels of personalization. The final product is the result of co-creation between the firm,

offering the tools and materials, and the consumer, using creativity to meet individual preferences.

Threadless was founded in 2000 and sells printed t-shirts with designs from customers. An online community of customers helps evaluate, improve and select the best designs to go into production. In doing so they take over a market risk. This method also generates word-of-mouth advertising, soliciting new customers.(Piller & Ihl, 2009) IKEA Planner Tool offers customers the possibility of designing their own kitchen. After installing the software tool, customers can drag and drop pieces and fit them to the exact measurements of their home. They can view the 3-D design, try different colors, print their designs, and see the total cost of their new kitchen. (IKEA, 2011)

Co-creation in ‘Use’ focuses on the aspect of ‘Usability’, where consumer friendliness is the most

important aspect. The term ‘usability’ refers to e.g. functionality, user control and freedom of choice,

ease of use, efficiency, ease of remembering tasks, and low error rates (Preece et al. 2002, in Two

Benches, 2008). In the example of the Smartphone application ‘Appie’, usability together with a focus

on personalization generates added value. The application is designed to make shopping easier but

only provides real added value when consumers co-create its use, selecting the right options and

indicating their personal preferences.


The Digital Polyclinic is a co-creation initiative from the health care sector. Usability is the main focus

of the Digital Polyclinic; helping patients to get access to information more easily. In this case, again

added value can only be attained when patients co-create; they will have to become active

themselves in participating on the platform, or it will be of no use to them.

In November 2010 Dutch supermarket Albert Heijn launched a mobile application in order to make

shopping easier. Customers can select and indicate their preferences, see previous purchases, quickly

create shopping lists and automatically arrange them in the order matching the walking route in the

selected store. (Albert Heijn, 2011)

In March 2010, Dutch University and Medical Centre (UMC) St.-Radboud introduced the ‘Digital

Polyclinic’. This platform allows patients to access their own medical files online, look into recent lab

results and go over medical reports. Patients can ask online questions to medical experts and chat with

other patients. (Zorginnovatieplatform, 2010)

Lastly, co-creation in ‘Experience’ occurs when firms offer unique value to their customers through

personalized experiences. This is very impactful, because it plays into consumers’ need for integrated

consumption experiences. It is also the most challenging, since experience co-creation goes beyond

business processes and requires a deep understanding of what generates value in experiences

(Ramaswamy, 2009). The practical examples show that consumers co-create an experience every

time they use the product. Nike+ enables this by linking different applications and focusing on

usability, performance and social interaction.

This January, Nike unveiled the Nike+SportWatch GPS running device, in collaboration with TomTom. The

device captures location information while showing runners their running time, distance, pace, and

burned calories. The watch motivates runners by e.g. recognizing personal records and offer post-run

acknowledgement and encouragement. They can upload their running results and access an online

community to share results, routes or post challenges. (Nike, 2011)

In 2006 Nike already launched the Nike+ iPod device, which made Nike’s share in U.S. running shoe

market rise from 41% in 2006 to 60% mid-2009. The success of the Nike+ iPod also enabled a drastic

reduction of marketing costs. To continuously improve, Nike uses the data collected from the runners to

learn and generate insights from. (Ramaswamy & Gouillart, 2010)

3.5 The Creator

Last but not least, this paper identifies the role of consumers as involved and independent value

‘creator’ (Piller, 2010). This type of value creation is moving away from co-creation; the activities are

often initiated and driven by consumers instead of firms. The online consumer communities are most

often developed as a platform for sharing interests and experiences. Users can discuss new product

developments, persuade each other to try something out or merely exchange knowledge, tips and

tricks (Kozinets, 2002). Piller (2009) distinguishes between ‘discussion forums’ and ‘communities of

creation’. The latter focus on creation and innovation, the members act on their ideas to solve a

problem or improve the use of a product. Their power comes from their independence of firms

(Prahalad & Ramaswamy, 2004). Piller (2009) notes it is important to realize that it is not the

individual efforts, but the collaboration and discussion between community members that creates

value. They provide each other with resources, information assistance and network links.


Füller et al. (2006a) recognize that only some community members are able to create ‘professional’

innovation, but the less skilled members help by coming up with ideas for improvement, or asking

challenging questions. Numerous interactions, contributions and experiments result in the creation

of a new product.

Füller et al. (2006) argue that these community users can offer firms valuable resources since

they are actively involved with the product. Their ideas can strongly influence the rate and direction

of innovations in some industries (Baldwin et al., 2006). According to Baldwin et al. (2006), user

innovation begins when new possibilities are identified and community members begin to explore it

together. The process turns into development of a new product which users are willing to purchase.

Some examples of consumer initiated communities are niketalk.com for sneaker fans,

and Lugnet.com for Lego fanatics.

Also firm-sponsored communities can act rather independently. Piller (2009) gives the example of

the Harley Davidson user community ‘HOG.com’, which is sponsored by the Harley Davidson

company. On the community website users posted and discussed motorcycle accessories they

created themselves. The producer of Harley Davidson later on integrated these ideas in their

development process.

Some other firm-initiated community platform are: MyStarbucksIdea.com;

openinnovationSaraLee.com; and Vocalpoint.com (Procter & Gamble).


4 Exploring the co-creative consumer

As discussed in the previous chapter, consumers are involved throughout the product development

cycle and can take on different roles. Each task attracts a different kind of consumer, depending on

factors such as required level of involvement, task difficulty and contextual aspects (Füller, 2010).

Despite the variations in role and task type, literature defines certain characteristics that distinguish

the co-creative consumer from the passive consumer. These will be discussed throughout the first

section 4.1. The following section 4.2 then explores the co-creative consumer further, by analyzing

their motivations for participating in co-creation. Figure 3 offers an overview of the characteristics

and motivations to be discussed.

4.1 Characteristics of the co-creative consumer

Before exploring cognitive variables and consumer characteristics, some attention should be paid to

environmental variables. It should be noted that co-creation predominantly occurs in the more

developed countries. These Western markets have an individualistic and experience-oriented culture,

a focus on creativity and an integrated use of Web 2.0 (Etgar, 2008). Furthermore, Western

consumers have more discretionary time available, which makes it more likely for them to engage in

co-creation as it reflects social, psychological and opportunity costs incurred (Etgar, 2008).

Involved lead-users Co-creation attracts consumers that are more interested, but also more competent to recognise

innovation needs than other consumers. These ‘lead-users’ want to help develop innovative products

and to push improvements (Von Hippel, 2002). Since they are actively involved in the use of the

product or the product category, they have a certain competence to anticipate future needs (Piller &

Ihl, 2009; Von Hippel, 2002). Lead-users also have a higher degree of trust and affinity with the firm

or product, and therefore perceive lower costs of participating in co-creation (Piller & Ihl, 2009).

McKinsey research underlines this and claims that affinity is the most important factor for consumers

willing to co-create; 40 per cent of consumers will refuse to co-create with companies they don’t like

or trust (Bughin et al., 2008).

Characteristics

•Lead user

•Technological skills

•Analogous market knowledge

•Cooperative skills

•Pro-active attitude

Motivations

•Enjoyment

•Empowerment

•Interaction

•Self-expression

•Peer recognition

•Altruism

•Information seeking

Co-creative consumer

Figure 3: The co-creative consumers’ characteristics and motivations


For all of the above reasons, Von Hippel (2002) argues for a ‘lead user method’: only leading-

edge consumers should be involved in co-creation tasks. In contrast to Von Hippel’s theory, other

literature underlines the importance of involving a variety of consumers instead of merely lead users

(Piller & Ihl, 2009). This allows firms to source a broader segment of their final target group. Also

including non lead-users will increase chances of developing a product that is relevant to the needs

of the overall target group (Kristensson et al., 2008).

Analogous market knowledge The most effective co-creative consumers possess ‘analogous market knowledge’, next to skills and

product knowledge (Piller & Ihl, 2009). The analogous market resembles the market that the co-

creation focuses on when it comes to consumers needs and product use, but often belongs to

another industry. People who are connected to different markets, might have developed or

recognized a certain solution or innovative idea. They have a broad experience and therefore a large

and diverse pool of information to source from. They are able to relate the co-creation task to other

market fields where they face similar challenges (Herstatt, 2002). An example of this can be found in

the development of the ABS system in the car industry. This idea was first realized in the aviation

industry and lead users were the first to recognize the use of the system for the automotive industry

(Piller & Ihl, 2009).

Technological skills Consumers need to have a certain skill that enables them to co-create effectively and makes them

participate (Etgar, 2008). Often co-creation involves online and technological toolkits that consumers

are expected to use independently. Prahalad and Ramaswamy (2004) remark that these skills can be

developed and evolve throughout the process of co-creation. They argue that people should at least

be comfortable with technology. Piller & Ihl (2009) also connects this to the importance of learning

capabilities; co-creative consumers should be able to learn and use new skills which enable them to

make effective use of the tools handed to them by the firms.

Cooperative skills Instead of merely exchanging information, consumers need to be able to effectively interact, react

and be aware of the actions of the other involved parties. Etgar (2008) notes the importance of

overcoming differences to enable a productive collaboration. Cova and Dalli (2009) also underline the

a need for a ‘we’ focus and a mutual responsiveness to the intentions and actions of others. This

creates a collective commitment to the activity and a feeling of mutual support, which in turn

enhances collaboration.

Pro-active attitude Modern consumers co-create by choice, they have a desire to express themselves (Prahalad &

Ramaswamy, 2004a). What distinguishes them from passive consumers, is the unwillingness to

accept what is offered to them if this doesn’t match their specific needs. Furthermore, they are

aware of the influence they can have on production processes and want to be heard (Prahalad &

Ramaswamy, 2004a).


4.2 Consumer motives to co-create

Finding out what motivates the co-creative consumer to participate helps to understand this

behavior. Besides this, unraveling consumer motives can help firms to gain insight into how to attract

consumers to their co-creation process. Research shows that motives are strongly dependent on

people’s personality, expectations, and goals concerning the co-creation tasks (Füller, 2010). In

general, consumers participate in co-creation because they expect it to be rewarding (Füller, 2010).

They can be driven by intrinsic and extrinsic motivations (Füller, 2010; Etgar, 2008). In the case of co-

creation, extrinsically motivated consumers can be driven by the expectations of a reward or

monetary compensation. Intrinsically motivated people get satisfaction from the co-creation process

itself, they are involved, engaged and often novelty-seeking and exploratory in their behavior.

Numerous studies support that intrinsic motivations should be the focus to engage involved,

interested and creative co-creation partners (Bartl et al. 2010). The following subsections discuss the

different motivations recognized in the literature.

Enjoyment

As discussed before, consumers enjoy the process of co-creation where they can use their own

knowledge and skills. They enjoy using their imagination and creating something that matches their

expectations (Piller & Ihl, 2009). This intrinsic motivation is the driving force behind co-creative

behavior (Füller, 2010; Füller et al., 2006). He points out that these consumers mainly seek intangible

rewards such as new friendships and a feeling of fulfilment. Co-creation is considered a playful and

enjoyable activity for these consumers rather than an effort (Füller, 2010). Curiosity is also pointed

out as a motivation, people want to find out what is going on and get involved with the activity.

Empowerment

Füller et al. (2010) also show that consumers engaging in co‑creation get a sense of empowerment.

This feeling increases the enjoyment of the interaction and in turn influences willingness to

participate in co-creation. Troye and Xie (2007) underline this and found that people get a sense of

pride and self-fulfillment through being involved in creative production practices. The level of

empowerment depends on the design of the interaction tool and the ease of handling this tool

(Füller et al., 2010). It also depends on how involved consumers are with the product or task, how

creative they are and whether or not they are lead-users. Consumers who score high on lead-user

characteristics, such as having had new product ideas, are also more involved and tempted by the

feeling of empowerment (Füller et al. 2010). This aspect can also be linked to self-efficacy, when

people get a sense of accomplishment out of the realization of a task. Consumers might perceive the

co-creation task as a challenge they want to face.

Interaction

The mere act of interacting with like-minded people is an important motivation of consumers (Etgar,

2008). Co-creative practices often takes place in online user communities, through which people

share their own generated content. The process of working with others towards a common interest

is what attracts co-creative consumers (Etgar, 2008).


Self-expression

Another motive that can drive consumers to become co-creators is the need for self-expression and

uniqueness. With this motive co-creation can be seen as an ‘authentication’ act (Arnould & Price,

1999 in Troye and Xie, 2007). Etgar (2008) underlines this and presumes that through co-creation,

people negotiate symbolic meanings in order to construct and maintain their identity. It is thus a tool

with which personal values and preferences can be expressed and elaborated on.

Peer recognition

In their articles, Etgar (2008) and Füller (2010) both recognize the importance of social aspects. They

agree that by participating in co-creation consumers want to gain peer recognition for their know-

how and contribution to the tasks. The co-creation task allows them to become visible and to get

reactions from co-creation partners, which in turn creates ego-gratification.

Altruism, moral responsibility

A case study from the UK shows that the co-creative consumer sometimes acts out of a sense of

moral responsibility (Pongsakornrungsilp, 2010). They feel the need to contribute their time and

effort in order to solve a problem and do not expect economic benefits in return. This motivation

drives them to engage in these activities for the sake of contributing, and they get a sense of

empowerment out of this. According to Pongsakornrungsilp (2010), a remuneration or reward would

be a loss of this power, since their contribution will no longer feel like a sacrifice.

Information seeking

Füller (2010) recognizes information seeking as one of the motivations for engaging in co-creation.

Consumers might be looking for an innovative product or preparing themselves for a future purchase.

It can also be that they are just interested in knowing more about trends or innovative product

developments. They expect to find relevant information in the co-creation process and might decide

to engage because of this motive.

Control

Etgar (2008) argues that consumers may be motivated by the idea that they have more control over

possible risks that the product might have. The risks that people fear when trying out a new product

can be, for example, physical, financial and psychological. By being part of the co-creation process,

consumer might have a sense of control over the production process. However, Etgar (2008)

comments that the co-creation process can create its own risks, such as failure to perform the task

well and conflict with co-creation partners.


5 Challenges for the firm

This paper offers a lot of theoretical and practical insights in the concept of co-creation. This chapter

zooms in on practical issues that arise when incorporating co-creation in the business process. It

explores some of the main challenges recognized in the literature and provides insights in how to

cope with them.

Figure 4 summarizes some of the benefits of co-creation that can be attained after

successfully incorporating the concept. These benefits strongly influence a company’s performance

and future success, but only when certain prerequisite conditions are met by firms. These conditions

are critical challenges and are shown on the right side of the figure. Co-creation requires a significant

change in behavior, mindset and organizational structure. This chapter further elaborates on some of

these challenges.

Figure 4: Benefits and challenges of co-creation as the new business paradigm

Characteristics and behavior of the firm

Prahalad and Ramaswamy, (2004) have determined factors within a firm that strongly influence the

success of co-creation. These factors are ,e.g., a company’s learning ability, flexibility, empathic

attitude, ability to create and maintain dialogue, level of openness and transparency, and the level of

accessibility consumers experience during the process. Co-creation requires externally oriented

employees, who can rapidly and efficiently respond to consumers’ true needs and wants (Pluijm,

2010).

In order to be effective in collaborating with consumers, firms should be able to listen and

observe their target group. This helps to find out what consumers are talking about and what a

product or brand means to them. According to Van Belleghem (2010) this crucial first step is often

overlooked. Only after a thorough exploration and gathering of insights, the co-creation conversation

starts. It is important to makes this an authentic and continuous dialogue (Lusch & Vargo, 2006).

There should be a focus on learning together and firms need to be empathic and open. To create an

Benefits of co-creation

•Creating a competitive advantage

•Increasing effectiveness and speed of product development

•Enhancing retention and trust

•Enhancing relationship with consumers

•Stimulating positive word-of mouth

•Reducing marketing costs

•Constant generation of insights

•Creating joy, satisfaction and empowerment for consumers

•Increasing product relevance for consumers

Challenges for firms

•Being flexible, empathic, open, transparant, responsive, authentic

•Making management pro-active, flexible and open to external sources of value

•Selecting the right co-creative consumers

•Balance between freedom and control

•Communicating and managing expectations

•Taking on a leadership role

•Appealing to intrinsic motivations and acknowledging consumers’ contributions


effective co-creation of value, there should be a feeling of connectedness, mutual effort and trust

(Prahalad & Ramaswamy, 2004; Lusch & Vargo, 2006).

Challenge: Being flexible, empathic, open, transparant, responsive, authentic

Management mindset

Prahalad and Ramaswamy (2004) dedicate an entire chapter to changing the traditional managers’

mindset. They argue for a focus on collaboration and responsiveness to consumer experiences and

needs. Open innovation and co-creation require management to diminish their focus on control,

planning and forecasting. Instead they should enter the ‘zone of opportunity’ and be more pro-active

and flexible. Reacting and thinking faster makes the difference in a co-creation setting (Prahalad &

Ramaswamy, 2004; Piller, 2010). This is especially challenging, since it counters the traditional

innovation paradigm. It will provoke considerable resistance from managers who believe in a more

traditional approach (O’Hern & Rindfleisch, 2008). Hargadon & Sutton (2000) underline the need for

a more open attitude and a realization that innovation can stem from inside as well as outside the

firm. Bartl et al. (2010) argue for incorporating a “proudly found elsewhere” attitude, with

enthusiasm for the value of external resources. This externally oriented attitude needs to become

the firm’s permanent way of thinking an acting to make it authentic.

Challenge: Making management pro-active, flexible and open to external sources of value.

Selecting co-creative consumers

In order to create an effective co-creation dialogue, it is essential to carefully select the appropriate

consumers; lead-users which represent a broad heterogeneous segment of potential consumers. This

will generate a diversity of ideas and diminishes the risk of creating products or services that are only

valued by a small segment of users (Kristensson et al. 2008). Kelleher (2011) underlines that these

lead-users should posses high levels of service and technical knowledge in order for them to make

valuable contributions. Furthermore, it is important to select only highly involved and dedicated

consumers, to reduce the risk of resignation or abdication of their role as co-creators, which can

disrupt the development process (Prahalad & Ramaswamy, 2004). A mere monetary incentive is not

sufficient as it will attract consumers interested in a personal need as their main goal for participating

(Bartl et al. 2010).

Challenge: Making a good selection of co-creative consumers, in order to create effective

collaboration.

Structure and rules Co-creation should be an open process and can generate many different inputs, ideas and focuses.

To prevent this large amount of ideas from leading to ‘noise’, there need to be clear procedures that

enable effective filtering of ideas (Whitla, 2009). Firms should structure the co-creation platform, e.g.,

by breaking down the task into different working groups, which users can access in parallel (Bughin

et al. 2008). Furthermore, firms need to find a balance between freedom and control, in order to

effectively develop and create value (Bartl et al., 2010). Prahalad & Ramaswamy (2004) suggest this

can be done by means of user protocols that define the rules of engagement and which can be

constantly revised based on experiences. An example of such a protocol which is successfully


managed is found in the online auction website eBay. As this online platform started to grow and

more and more people participated, a community with its own rules evolved. This allowed eBay to

rely on its users to enforce the code of conduct and for an interactive method of quality

management (Prahalad & Ramaswamy, 2004). McKinsey underlines this method and argues that

social norms are often enforced by users which helps mitigating risks (Chui et al., 2009).

Challenge: Finding a balance between freedom and control; allow for evolvement of

community norms and rules

Fostering a collaborative culture

Consumers can influence the brand value of a product through co-creation practices, by adding new

value and meaning to it. However, they also have certain expectations and co-create accordingly. If

the firm fails to comply with these expectations, it runs the risk of consumer scrutiny. In the online

environment it is difficult for firms to immediately identify, react and control these protests.

Consumers can ‘make or break’ a brand by means of far-reaching online interactions (Van Belleghem,

2010). According to McKinsey research, many firms are concerned about these risks and have

difficulty finding the right balance between freedom and control (Chui et al., 2009). Firms have to

foster transparency and a collaborative culture, where concerns are openly addressed and

expectations can be managed. It needs to be clear for all parties what is expected from them.

Since consumers consider their contributions to the co-creation process unique and

important, receiving negative feedback from others may lead to a negative of competitive attitude.

Kelleher (2011) argues that firms should manage this carefully and encourage and foster both

competitive and collaborative behaviour. Still, there is always a possibility that conflicts arise among

co-creators or between co-creators and the firm. This increases the risk of dissatisfaction and

withdrawal from the community or even stimulate co-creators to develop their own products or

collaborate with another party. Bughin et al. (2008) suggest that a leadership role from the firms can

prevent and help resolve these issues. This requires a cohesive vision and a constant focus on

collaborating. Cova and Dalli (2009) argue that firms should especially prevent co-creators from

feeling ‘exploited’. This feeling can occur when consumers do not feel appreciated and as a result

they will protest or retreat.

Challenges:

- Clearly communicating and managing expectations

- Taking on a leadership role, manage expectations and encourage a collaborative culture,

which allows for constructive criticism

Empowering consumers

In a co-creation collaboration it is important to actively stimulate consumers and keep them

motivated to deliver quality. As described in the previous section of this paper, co-creative

consumers are mostly driven by intrinsic motivations. McKinsey research also shows that firms who

merely offer monetary rewards to motivate consumers to increase their input, are not effective (Chui

et al., 2009). Consumers start focusing on meeting the benchmarks and they are not intrinsically

triggered to deliver quality input. When these firms changed their tactics and played into consumers’

desire for recognition and acknowledgement, there was a significant increase in participation input

(Chui et al., 2009).


Füller et al. (2010) note that consumers that engage in co-creation projects will rarely be able to

determine the final outcome of a product. In most cases, only a small number of consumer

suggestions are actually considered for mass-produced goods. Nevertheless, consumers feel

empowered because they are listened to and experience a sense of enjoyment and self-efficacy. The

actual influence on the product seems to be of lesser importance.

The aspect of trust plays a role here and has a direct influence on the quality of the

interaction and feeling of empowerment. The more the consumer trusts the firm, the more involved

they are (Etgar 2008; Bughin et al. 2008). Users want to feel secure and confident that the producer

doesn’t terminate or change the rules of engagement in order to pursue a different or better goal.

Challenge: Appealing to intrinsic motivations and acknowledging consumers’ contributions.


Conclusions

Co-creation is the new innovation paradigm and firms are increasingly using consumer resources as a

source for competitive advantages. This has changed traditional relationships between consumers

and producers. While consumers were traditionally viewed as value exchangers and extractors, they

are now considered a source of value creation and competitive advantage.

The development of co-creation is driven by individualization and empowerment of

consumers, the rise of Web 2.0 and the growing presence of open innovation practices. Modern

consumers are interactive, creative and knowledgeable, which makes them valuable resources for

new product development.

The value of co-creation lies in the process of collaborative learning, developing and sharing

knowledge. Through these processes value is created for both parties. It is therefore vital that the co-

creation platform facilitates this collaboration and allows for an interactive and open dialogue to

develop. Co-creation in its purest form involves integration of consumers’ skills and knowledge

throughout the innovation process.

Besides co-creation, modern consumers play various roles as value creators, in different parts

of the innovation system. They can take on and vary between these roles according to the purpose

and intention of the collaboration with the firm. Consumer roles range from ‘insight providers’ --

where they are merely sourced by firms for information or evaluation purposes-- to ‘creators’, where

innovation is initiated and driven by consumers themselves. What distinguishes the role of ‘co-

creator’ is that consumers’ skills and knowledge are directly integrated in the business process

through collaboration with the firm. However, co-creators can also integrate their skills and

knowledge more independently, as long as firms facilitate this. This shows the wide range of

possibilities and applications of co-creation. To illustrate this, practical examples are given where co-

creation occurs in the phases of ‘design’, ‘use’ and ‘experience’. ‘Co-creation of experiences’ is the

most advanced level; every time a product is used consumers co-create their own consumption

experience. This level is quite complex and requires a thorough understanding of what generates

value in experiences.

When exploring the characteristics of co-creative consumers, it shows that they are often

pro-active lead-users, who have insights into future needs. They possess relevant technical and social

skills, and have a solid base of product knowledge. These lead users are highly involved with the

product category and interested in developing new products. Their contributions are often high in

quality and consumer relevance. Nevertheless, it can be useful to involve non-lead-users as well, to

ensure relevance for the broader target group. Identifying and involving the right participants,

consumers as well as people from the firm, is challenging but crucial in order for effective results.

Consumers willingly participate in value creation mainly driven by intrinsic motivations. They

enjoy the process and get a feeling of satisfaction and empowerment by contributing. This

enjoyment is closely related to the social interactions and recognition they receive for their

contributions. To retain consumer interest and involvement, firms should stimulate these

interactions and appeal to intrinsic motivations.


There are many benefits of successful co-creation described throughout this paper. These benefits

can only be achieved if co-creation principles are applied correctly and are integrated throughout the

business process. This requires firms to adapt their processes and mindset in order to effectively

engage in co-creation. Firms should become more open and willing to integrate external sources in

their innovation process. They should listen and observe their target group, determine main

objectives for co-creation, and identify and involve appropriate co-creation partners. When it comes

to managing the co-creation process, firms have to be able to find the right balance between

freedom and control. They should stimulate a collaborative culture and allow for rules to evolve from

within the community.


Limitations and suggestions for further research

This paper is based on literature findings, that have been mainly located through online search

engines Scopus, Web of Science and Google Scholar. The focus was on the most recent and

academically relevant literature. Although careful attention was paid to the use of appropriate and

complete search queries, the selection process is by default subjective.

The concept of ‘co-creation’ is relatively new and there haven’t been many studies exploring

the roles of the consumer in firms’ innovation practices. The roles identified and elaborated on

during this paper, are the result of the researcher’s interpretation of relevant literature findings.

Suggestions for further research

Future research could focus on analyzing consumers’ and firms’ motivations for co-creating, in order

to identify mutual goals and expectations. Also, the critical success factors and challenges of co-

creation could be further explored to be able to optimize the process.

This paper shows that co-creation requires an attitudinal change and a new set of skills and

knowledge, compared to the traditional innovation cycle. These changes are important for both the

firm and the consumer, in order to effectively interact and collaborate. It is important to explore

these prerequisite conditions and make firms aware of the required changes. At the same time,

consumers should be offered insights into these conditions to better prepare themselves for co-

creation tasks.

Current academic literature mainly focuses on co-creation practices and managerial

implications. However, the majority of consumers are not (yet) actively participating in co-creation. It

is interesting to measure consumer awareness of this new innovation paradigm and to find out what

the expectations are. Knowing this, firms can play on these expectations. Furthermore it can be

explored whether awareness affects consumers’ interest in participating in co-creation. This can then

be used more often, to attract more consumers to engage in co-creation.

Furthermore, it is interesting to find out whether and how consumers’ attitude is influenced

by co-creation. Do they evaluate products differently when they are the result of co-creative

innovation? And how can the aspect of ‘co-creation’ best be communicated to the end-user? It can

be expected that once consumers are aware and informed that the co-creation principle is applied by

firms, this will positively influence their attitude. So, will consumers then consider brands more

empathic, more open to their ideas and more connected to their needs? Will co-creation instigate

more word-of-mouth and a positive ‘buzz’ around the product or brand?


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The co-creative consumer