This journal discusses how co creation is used to create experiences and the relationships between a company and its customers.
The market is developing and consumers are wanting more involvement with the services they are using. Prahalad and Ramaswamy (2004) states that consumers want to communicate with companies and therefore co-create value. “Consumers can choose the firms they want to have a relationship with based on their own views of how value should be created for them” (Prahalad and Ramaswamy, 2004)
Companies such as eBay offer consumers the chance to put their own price on goods and services. Therefore allowing them to express their expectations on the product. According to Prahalad and Ramaswamy (2004) customer interaction is the key to unlocking new sources of competitive advantage. Recently business managers have introduced ways to partition work to the consumers, for example self-checkout. “Consumers find some of these beneficial” (Prahalad and Ramaswamy, 2004).
Due to advances in technology customers have access to more and more information, therefore they want to understand risk-benefits and will ask more questions. This can then challenge companies exposing the knowledge they have on products and services they provide.
“Dialog is an important element in the co-creation view” (Prahalad and Ramaswamy, 2004). Both consumers and businesses should know of each others interests and have the same access and transparency for it to work.
Co-creation allows customers to express their expectations and willingness to help their own experiences however the company is able to deny choices and take control. This works two ways and although companies can advise, customers must take responsibilities of their actions, an example of this is smoking. “The tobacco company has the obligation to educate consumers on the risks of smoking and develop cessation programs” (Prahalad and Ramaswamy, 2004).
- Prahalad, C. and Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18(3), pp.5-14.