The Benefits and Challenges of This New Relationship for Marketing Managers

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The Benefits and Challenges of This New Relationship for Marketing Managers


                               Chineye Augusta Onwuama


University of Liverpool

With the advent of co-creation, the relationship between the organization and the consumer has changed. This paper intends to critically discuss the benefits and challenges of this new relationship for marketing managers.

Before the initiation of co-creation, businesses operated through traditional marketing, (price, product, promotion, place) customers would buy what they can see in the market, but Customers todays have more options of products, yet they seem disappointed (Prahalad and Ramasamy, 2004, p.6).  According to Nicolic et al (2013, p.85) co-creation portrays set of strategies that set up a dynamic, inventive and social coordinated process between producers and clients with regards to product advancement. Ford et al (2012, p.281) discussed that in marketing cocreation is not all about selling Product and services to customer, but should think as far as how they can co-produce and meet the needs of the customers. For example, Unilever company stated an open innovation that says, “if you have a new design or technology that could help us grow our business and solve the challenges we have set, we would like to work with you through open innovation”. It was further suggested that with co-production the value of the customers is met, and this value is strongminded by experience provided through product and services. Liu (2009) stated that co-creation occurs where self-service is vital, and customers are doing the services that used to be done for them by employees. For instance, Automatic Teller Machines (ATMs) serving the role of a bank teller, customers doing some transactions through internet, customers scanning and checking out items via self-checkout in a grocery store, self-serve kiosk at the airport to get boarding pass.  All these tends to create value and it is beneficial to Managers and customers.

Co-creation is a marketing plan grounded on consumer values by making use of distinctive mediums to share ideas, information and issues faced in other to enhance the quality of the product. During the process of creating value, customers loyalty and Personalized experience will be accomplished, there by expands the value of the product and increases the profit of the manufacturer (Parahalad and Ramaswamy, 2004, p.9).  Witzel and Mattu, FT, (2010) agreed that It is not compulsory for the customers to buy the product or services before adding value, value could be added on product and services without contacting the company through social networking such as Facebook, Instagram and Twitter. von Hippel and von Krogh (2006, p.298) discussed that Some costumers are motivated by the benefits they get whilst adding value in co-creation with a firm such as financial reward, financial reward could be in form of share of profit or cash given as a prize, and firms benefits from customers that are not motivated by money because there are some customers that freely want to share ideas. such customers receive social advantages of co-creation from titles or different types of acknowledgement including expanding status, social regard, “great citizenship” (Nambisa and Baron 2009, p.389). Darmody, (2017) argued that customers are being exploited on the bases of creating value for customers, by not paying the customers for collaboration and eagerness contributed in developing a product. Zwick, et al. (2008, p.165) agreed that value in co-created product is said to be more expensive than product produced through identical production. For example, in a Nike shop customer are given the opportunity to order customize Nike shoe of their choice, but a customized Nike shoe are more expensive than standard Nike shoe, hence customers are paying for adding value in co-creation.  Motivation is the main reason why most customers are willing to add value to an Organization and another reason for having low participants when Organizations with huge number of Fans develop cocreation platform. There should be a balance between monetary and non-monetary motivation to achieve required participation and value from customers.