Co-creation Definition

From 80s, consumer and network partner involvement are playing critical role in

value co-creation (Gronroos, 1990; Kotler, 1994; Gadrey, 1995;  Zeithaml, 1996;

Loverlock, 2007). Scholars define consumer participation as the new source of service

production and innovation value. Not surprisingly, the role of consumer has been

change from being the consumer and user to the participant in value co-creation process

contributing to different innovative tasks or product development (Fuller, 2010).

From 90s, co-creation concept emerged and bought to a new & dynamic concept

between relationship of firm and consumer. Co-creation is defined as firm engage

consumers directly in the production or distribution of value while consumers can get

involved at any stage of the value chain (Kambil & Friesen, 1999). According to the

definition from Kambil & Friesen (1999), co-creation means that firm co-creates with

their consumer in the value chain and to co-create value.

Other scholars start to focus research on examine the changing role of consumer

from conventional value creation process to co-creation experiences. Firms and

consumers had distinct roles of production and consumption. While product and service

contain value and the market perform the function to exchange value between firm and

consumer. Consumer engagement with firm is the process to define and create the value.

After 90s, co-creation of value definition is based on an individual-centered

between consumer and firm. Armed with connective tools, consumer want to interact

and co-create value, not just with one company but with whole communities of

professionals, service providers, and other consumers (Prahalad, 2004). This definition

of value co-creation is similar as Kambil & Friesen (1999), both emphasize firms

co-create value during value creation process with consumer and other stakeholder.

Vargo & Lusch (2006) integrate the definition on co-creation from the service logic

perspective, to extend the definition further and more comprehensive. According to

Vargo & Lusch (2006), the value co-creation consists of two components. Firstly, value

can only be created with and determined by the user in the consumption process and

through use or what is referred to as value-in-use. Co-creation of value can occur during

the interaction of firms and consumers over time while either in direct interaction or

mediated by a good. The second component of co-creation is called co-production. It

involves the participation in the creation of the core offering itself. It occurs through

shared inventiveness, co-design, or share production of related goods, and can occur

with consumers and any other partners in the value network. The definition from Vargo

& Lusch (2006) is more in details, specific and even broader to cover all partners in

value network.

From 21^st century, the latest definition is defined by Ramaswamy & Gouillart

(2010), they produced a similar definition on co-creation and further emphasizing the

power from co-creation for the future. They define co-creation involves both a profound

democratization and decentralization of value creation, moving it from concentration

inside the firm to interactions with its consumers, consumer communities, suppliers,

partners, and employees, and interactions among individuals and firms can require it to

develop new capabilities.

The development of co-creation definition starts from firm and consumer further

with all other stakeholders in the value network. Both parties interact and participate to

co-create during consumption process and service offering process. Four definitions of

co-creation from different scholars also put the emphasis on “value co-creation” which

is what every service company now concern the most. The change on definition of

co-creation matches with the change of service definition which focuses on offering

“value” but not only the physical product and service to the consumer (Loverlock,

2007). Table 2.1 summarizes some studies on co-creation definition.

Table 2. 1 Past Studies Researching on Co-creation Definition

Author(s) Year Journal Co-creation Definition Kambil &

Friesen

1999 Outlook Magazine 

Co-creation adds a new dynamic to the producer/consumer relationship by engaging consumers directly in the production or distribution of value. Consumers, in other words, can get involved at just about any stage of the value chain.

Prahalad &

Ramaswamy

2004 Strategy &

Leadership

The future of competition, however, lies in an altogether new approach to value creation, based on an individual-centered co-creation of value between consumers and firms. Armed with new connective tools, consumers want to interact and co-create value, not just with one firm but with whole communities of

professionals, service providers, and other consumers. The co-creation experience depends highly on individuals. Each person’s uniqueness affects the co-creation process as well as the co-creation experience. A firm cannot create anything of value without the engagement of individuals. 

Vargo &

Lusch

2006 Journal of

Retailing

The concept of co-creation of value represents that value can only be determined by the user in the consumption process; it occurs at the intersection of the offerer, the consumer-either in direct interaction or mediated by a good and other value-creation partners. The idea of co-creation is closely tied to “value in use”

and highly related to the concept of consumer experience. The second component of

co-production involved the participation in the creation of the core offering itself, and therefore, probably more appropriately referred to as “co-production”. It can occur through shared inventiveness, co-design, or

shared production and can occur with

consumers and any other partners in the value network. 

Co-creation involves both a profound

democratization and decentralization of value creation, moving it from concentration inside the firm to interactions with its consumers, consumer communities, suppliers, partners, and employees, and interactions among individuals and firms can require it to develop new capabilities.