Co-Creation

= The participation and involvement of consumers in the creation process formerly dominated by businesses.

(from http://www.co-creators.co.uk/?page_id=16)

Typology

From the co-creation blog at http://www.co-creators.co.uk/?page_id=10

1. Value Co-creation:

ATM Cash Machine, Airport Check-In

More Complex Value Co-creation:

"Truffle-tree.co.uk allows customers to adopt a truffle tree in France. Customers who adopt a tree (annual price £145 / $239 / €219 plus an annual maintenance fee) will either receive the truffles from “their” tree or can choose to pool their “harvest” with others to spread the risk of a low harvest. The experience of adopting, and being able to visit, your tree adds value, in comparison to otherwise just buying truffles, but does not provide for co-creating further, for example by planting the tree or actually harvesting your own truffles.

Other, similar, examples are http://www.kuhleasing.ch/ or http://www.nudo-italia.com/ where you “adopt” a cow for cheese or an olive tree for olive oil."

2. Item/Product Co-Creation:

"At CrushPad customers can participate in the decision making process in order to get to the end result of your own bottled wine. Customers can define the type of grape, the recipe and many other factors making the item/product a personal creation. In comparison to the Category “V” businesses CrushPad does not only have an adoption scheme, but involves and educates the customer beyond the initial and superficial level.

At Threadless.com customers can send in their own t-shirt designs, which are subsequently voted on by the other customers and visitors to the site. The winning design is then printed and sold as a newly created item/product. Again, consumers have a direct participation in and influence on the final outcome of the product development process. By the way, the winning design is rewarded with a cash prize as well as other benefits."

3. Process/Business Co-creation

"the Process/Business Co-creation level requires an almost completely new business structure that is fully supported by the management, its structure and its processes."

Example:

"At Ladybank members can collectively make decisions on business decisions by a majority vote. Once in production, members will be able to influence the style of whisky produced at the distillery. Through committees members could also influence other decisions to make it a business driven by its customers." (http://www.co-creators.co.uk/?p=10)

History

The economic phases up to co-creation, summarized by the Co-Creation blog.

1. Small Scale (Bespoke) Production

Before the industrial revolution and the emergence of mass production in the mid 1800s production was small scale. Depending on the type of product, it would be made on a small scale or bespoke.

2. Mass production / Transactional Marketing

During the first half of the 19th century the industrial revolution started in the UK and spread throughout the world. With it came mass production, making many products available to the masses that had been previously been the privilege of the rich. Mass production first popularized by Henry Ford’s Model T in the early 20th century continued to develop and dominate for much of the century. With increasing labour and production prices in Western Europe and North America, production was shifted to the Far East and later Eastern Europe in an attempt to maintain low production costs for mass produced products. With mass production came mass standardization and uniform products.

3. Mass Customization / Customer relationship marketing (customer retention)

With continued development standardized products lost their original appeal and a movement towards customization started. Mass customization only went mainstream in the 1980s and 1990s. Consumers, driven by the desire for choice and personalized products, demanded more than just one model or type of product. The company that could best satisfy consumers’ demand would remain ahead of the game and benefit financially. Still, companies seemed unable to satisfy their customers, who were unable to find products that they really wanted.

4. Co-created Products

Unsatisfied with mass customized products, consumers are looking for more input into the products they buy. With the development of the internet’s communication channels they are able to communicate these desires not only with their fellow consumers, but also with the companies they expect to make these products. What was true for mass customization also applies to co-created products – companies that can better satisfy their customers will stay ahead of the game. However, the step from mass production to mass customization was infinitely smaller than the step from mass customization to co-created products. The reason for this lies in the fact that this step requires not only business processes to change (considerably), but also for the managers’ mindsets to change who lead this change.

5. The Co-created Business

The co-created business follows on logically from co-created products. And indeed, why stop at products, if you can co-create the entire business. Let consumers have a say in creating the business that will be creating “their” products.

Example: he Ladybank Company of Distillers Club

6. Post co-creation = Small scale production?? (http://www.co-creators.co.uk/?page_id=25)

More Information

The Co-creation blog is at http://www.co-creators.co.uk/