The DNA of Value Co-Creation

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Later this year, Wiley will be publishing several reference volumes covering topics such as marketing strategy, innovation, and marketing research.  I have been invited to contribute an essay on Value Co-Creation for the Innovation volume and two chapters for the Marketing Research volume.  A brief excerpt from the value co-creation essay highlighting its key aspects follows.

The primary
purpose of value co-creation is to create unique
and specific value for individual consumers
.  Contrast this with traditional marketing approaches, where
value is created for average consumers,
either in the total market, or in particular market segments.  A simple case study will help illustrate the dynamics of co-creation.

Imagine it’s the early
.  A lady, let’s call her
Ishee, experiences an increase in acidity and stomach pain each time she eats a
major meal.  She visits a
gastrointestinal specialist (GI), who diagnoses her condition as GERD
(Gastroesophageal Reflux Disease), and prescribes her Zantac.  Ishee accepts the specialist’s
diagnosis, does not contest his expertise, asks a few clarifying questions and

Now fast forward to
.  There is another lady, let’s
call her Nushee, who also experiences an increase in acidity and stomach pain,
following each major meal.  She too
visits a GI, who also diagnose her condition as GERD, but prescribes a stronger
medicine, an acid suppressant called Prilosec. 

However, Nushee is not
willing to merely be handed a diagnosis and a prescription. She has many
questions, wants answers, and proactively engages the specialist in a conversation
about her condition

  • She informs the specialist of friends who have similar symptoms, but were diagnosed instead with IBS (irritable bowel syndrome)
  • She refers to an article discussing common stomach ailments she has printed from WebMD in preparation for her visit
  • Wikipedia informs her that proper amounts of stomach acid help digestion; she wonders whether taking a drug that suppresses stomach acid is a smart idea
  • What about alternative remedies – like natural cures and home remedies, shouldn’t she try them first?

The brief case study
illustrates the DNA of value co-creation. 
Nushee is accepting of the specialist’s expertise, but not to the total
subordination of her own opinions and knowledge
.  For her value does not merely lie in receiving a diagnosis
and a prescription.  Her concept of
value is broader
.  It encompasses
information, knowledge, and the assurance that the specialist is treating her
as a unique patient.
  What’s more,
she is willing to work with the specialist to this end!


The rise of the internet-connected,
well informed, globally aware consumer, has significantly altered the balance
of power between manufacturers and consumers
.  Today’s consumers are unwilling to be passive recipients of mass-merchandised
value.  Instead, through a blend of
assertion, activism, and participation in web conversations, today’s consumers
are demanding that companies shape their offerings to uniquely meet their
specific needs, in specific situations, at specific points in time.

This shift in power, with
consumers no longer merely being a source of demand at the end of a value chain
has fundamentally altered the way in which marketing is practiced and value is
.  In today’s world, value
is created jointly
by a company and its many customers/non-customers.  The consumer is a fundamental resource
and input in the value identification, creation, and delivery process, and the
co-creation experience is an integral part of the total value offering.

The key building blocks of
co-creation of value are:

  • Listening
    – learning about consumers’ experiences; their angst, frustrations, desires,
    and aspirations
  • Sustaining value co-creation conversations – meaningful conversations that yield the raw
    material for co-creation
  • Experimenting and rapid prototyping – to manage risk, improvise, and enable speedy value
  • Execution
    – only when co-created value is delivered can the next round of value
    co-creation be initiated

 A few leading examples of
of value follow:

  • Nike + iPod allows
    gym fitness enthusiasts and runners to co-create their own fitness experiences and
    share it with similar others
  • You dream it,
    ASUS builds it, Intel inside – ASUS and Intel are combining forces to build the
    first community-designed laptop
  • Can innovation
    lead to evolution?  Toyota believes
    it can.  It is engaging millions of
    people to co-create value in domains like water, air, and energy
As mentioned in the first para of this blog, a version of this essay will be published in Wiley International Encyclopedia of Marketing (John Wiley and Sons, Ltd.).  I will post the link to the volume once I have more details.