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mardi 14 janvier 2014

Upstream and downstream co-creation : two marketing perspectives

Co-creating products and services with customers and/or consumers is now a major challenge for marketing managers.


The massive use of Internet, the development of online communities, interactive platforms and toolkits offer the potential to co-create with a large number of customers or consumers. Co-creation presupposes that customers accept to get engaged and interact with the company. 

Creating a brand community or launching a call for co-creation are not enough to ensure consumers’ participation. Value co-creation in a virtual environment depends on the benefits perceived by those participating. Such benefits may be cognitive, hedonic, social integrative and personal integrative. If these benefits are perceived to be insubstantial, participation will decrease accordingly.  


This strategy of value co-creation may take place upstream and/or downstream of the new product/service’s launch on the market.

Upstream co-creation 

 
With upstream  co-creation the consumer can participate from the product idea to its conception, through its test phases and even as far as the advertising campaign. it comprises programs such as DELL’s “Idea Storm”. Toolkits integrated into interactive platforms make it possible to conceive new designs or even to create truly new products. 

This co-creation is relevant to the search for new product or service ideas with customers (at the front end stages of the innovation process), but also at the final stages, by creating messages or advertising videos.

Brands and companies like Nivea, Orange, SFR, Microsoft and Proctor & Gamble have invested in such upstream co-creation. Specialized marketing institutes such as Innocentive, e-Yeka or Hyve manage and organize these companies’ calls for contributions also called “challenges”.

From Upstream to Downstream Co-creation

Downstream co-creation


This strategy concentrates on the consumer’s personal consumption (product or service) experience. One characteristic of services compared to products, is that the former require a more or less strong degree of customer participation if consumption is to be perceived as a source of value. The company co-produces the service through its personnel and through a degree of customer participation. For example, clients of fitness centers co-produce their experience through their coaches and the physical effort they are prepared to make. Vargo and Lusch (2004; 2008) extend this logic to product consumption, arguing that S-D (Service-Dominant) has replaced G-D (Good-Dominant). 

In a nutshell, the product or the service is only a « value proposition »

An increasing number of firms are getting consumers to participate in downstream co-creation that is, after the product launch, to have better feedback on consumption experiences. One example is Lego’s LUGNET site that takes consumers beyond the product by offering them a highly personalized experience thanks to co-creation tools.

Customers assess whether this potential value satisfies their own needs and if they have the specific knowledge and skills to commit to co-creation. In the same perspective, Prahalad and Ramaswamy (2000; 2004) see product (or service) consumption as an opportunity for privileged interaction: the consumer co-creates a personalized experience with the brand throughout the product’s lifetime. For example, Starbuck’s program “The red cups are here - Share your story” set up a continuous dialogue about personal stories experienced while consuming the products during the summer holidays. 

This downstream co-creation relies on customers’ observations in their everyday consumption cycle, that is, the way they use the product on an everyday basis « to get the job done » (Christensen et al. 2005). 

Nike + I Pod

The manager may also concentrate on extraordinary experiences to discover unforeseen or extreme uses of the product. It is a matter of determining what makes sense in the consumption of the product or service. Interactive platforms on Internet and on-line communities offer the potential to discover new uses and future consumption trends. Such sites offer a formidable stock of raw material for observing, testing and developing new value propositions with customers. For example the Nike + platform makes it possible for customers to co-create services which add value to Nike’s product offer (Ramaswamy & Gouillart 2010). With this approach the company keeps control of the product upstream and co-creation with the customer only takes place downstream.




More readings
Christensen, C.M., Cook, S. & Hall, T. (2005) Marketing malpractice: the cause and the cure. Harvard Business Review, December, 83, 12, pp. 74–83.

Prahalad, C.K. & Ramaswamy, V. (2000) Co-opting customer competence. Harvard Business Review, jan-feb, 78, 1, pp. 79–87.

Prahalad, C.K. & Ramaswamy, V. (2004) Co-creation experiences: the next practice in value creation. Journal of Interactive Marketing, 18, 3, pp. 5–14.

Ramaswamy, V. & Gouillart, F. (2010) The power of co-creation. Free Press, Simon & Schuster, Inc: NewYork. 
Vargo, S.L. & Lusch, R. F. (2008) Service-dominant logic: continuing the evolution. Journal of the Academy of Marketing Science, 36, pp. 1–10
Vernette, E et Hamdi-Kidar L. (2013), Co-creation with consumers : who has the competence and wants to cooperate, International Journal of Market Research, 55, 4, 539-561. 




 

1 commentaire:

  1. This is nice and innovative post on Co-creation and i get many new information from your blog thanks for sharing such a valuable post.

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