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The Foundation of Value Co-Creation
Abstract: In this paper these is a systematic literature review done for the concept of value
co-creation. This is done to determine the fundamental aspects of value co-creation. To limit
the analysis the articles were chosen for four databases, ScienceDirect, SAGE publications,
EBSCO host, and Emerald Insight. These articles were reduced by reading the abstract and
the annotated to create an overview of the research currently done. After this reduction,
there were 142 articles left. From these 142 articles the contribution was determined. Out of
these contributions arises patterns, which are discussed in the results. The paper shows that
the most fundamental aspect of value co-creation are the interactions between actors. This
will give guidelines for further research and several of such researches are proposed in the
discussion..
By Sam Veldhuijzen van Zanten
Student number:6173519
First Supervisor: Carsten Gelhard
Second
Supervisor:
?
Institution: University of Amsterdam Program: Beta-gamma (major: Business studies
Submitted on: 29-06-2015
Statement of originality:
This document is written by Student, Samuel Hendrik Veldhuijzen van Zanten, who
declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no
sources other than those mentioned in the text and its references have been used in creating
it. The Faculty of Economics and Business is responsible solely for the supervision of
completion of the work, not for the contents.
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Table of Content
Cover page plus abstract
p. 1
Table of Content
p. 2
1. Introduction
p. 3
2. Method
p. 5
3. Analysis
p. 8
4. The result of analysis .
p. 10
4.1
Basic
assumption
of
analysis
p.
10
4.2
Value
Co-Creation p.
13
4.3 Coordination of interaction
p. 14
4.4 Communication of Information
p. 18
4.5
Integration
of
resources
p.
19
4.6 Evaluation of Value
p. 21
5. Conceptual Model
p. 23
6. Discussion
p. 25
7. Literature list
p. 26
8. Appendix A.
p. 29
9. Appendix B.
p. 43
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1. Introduction
The perspective on the economic environment has changed in the past few decades.
Previously the economic markets were seen as an exchange of goods. This goods-dominant
logic is based on tangible assets, embedded value, and the transactions (Vargo and Lusch,
2004). With the changes in the economic environment, Vargo and Lusch (2004) proposed
an alternative view on the markets. According to them the market should be viewed with a
focus on intangible resources, the co-creation of value, and relationships. This new
perspective is called the Service-dominant Logic (S-D Logic) approach.
According to Chesbrough (2003), the changes in the markets is because of an
increase in the mobility of the knowledge workforce and emergence of private venture
capital firms, that invest in potential research and thereby removing the R&D of firms into a
more open innovation environment. This increase in pressure has resulted in a more open
innovation environment.
With the changing markets, there is also a change in the role of stakeholders. This
change is addressed by Prahalad and Ramaswamy (2004), they indicate that the change in
customers is because of the developments in technology. This has caused stakeholders to be
able to collect information more readily and network with other stakeholders. The
technology has also widened the stakeholder’s perspective from a local view to a global
perspective. Last is that stakeholders have more access to data and can experiment with
products and therefore have a more active role in the organization.
These changes in the economic market have caused the emergence of the S-D logic
approach. This approach has introduced the value co-creation concept.
There have been many articles written about value co-creation. These articles have
introduced multiple approaches to the concept of value co-creation, but there is not one
concept or framework that has been accepted as falsified. This is because of the complexity
that the new perspective on value brings. The articles that have been written about value
co-creation are mostly done on a micro, meso, or macro level of the topic. This means there is
no rounded conceptualization of the topic of value co-creation done.
The concept of value co-creation has been actively researched over the past
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value co-creation. Value co-creation has been researched on the micro level and through
this research there have arisen multiple concepts of value co-creation and its foundations.
With micro level is meant the interaction between organization and individuals.
Prahalad & Ramaswamy (2004) has introduced the DART-model to clarify the important
factors in building on a relationships between the firm and the stakeholder. Akaka et
al.(2014) state the importance of communication and indicate the importance of the
background knowledge and beliefs for a good interaction between actors.. While Ngo and
O’cass (2010) indicate that through the new view of value, there has also been a significant
change in the definition of value. They show that value is determined through context and
specific events, that can cause changes in the perceived value of a product. Next to these
different views, there is Neghina et al.(2015) that proposes that value co-creation can only
be determined if the basic concepts of interaction between the firm and it’s stakeholders are
identified.
The meso level is the interaction of firms with their value/supply chain of indirect
contribution to an alliance partner. The research on the meso level has many overlapping
aspects with the macro and micro and therefore will show an overlapping of the value
co-creation concept through the different levels of an organization. One example of the meso
level analysis is the article of Lusch (2011) “ Reframing supply chain management”.
Chesbrough (2003) states, that there are multiple strategic options for firms to
interact and still keep their competitive advantage. The research on B2B interactions is also
flowing from meso into the macro level of value co-creation. The macro level is the
interaction on the market level. On this level it is important to state that, according to
Prahalad and Ramaswamy (2003), the rapid transformation of the competitive environment
increases the potential to innovate, but it also increases the need for greater innovation. But
with this increase of open innovation and co-development of new products are multiple
questions on the effect of sharing and to what extend a competitor can have access to the
knowledge of a firm. These questions have developed multiple strategic options and
therefore multiple approaches to resolve the problems that arise with co-creating, a few of
these options are discussed by Chesbrough (2003).
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So, given all these different theories and conceptual frameworks and their focus on a
specific level of the organization, there arises the question of what are the fundamental
aspects of value co-creation? By researching a broader view of the value co-creation
concept, there will be an answer to the question: what are the fundamental aspects of the
value co-creation process?
This will give a better understanding of the topic as a whole and indicate the connecting
elements necessary for value co-creation.
2. Method
The method that was chosen to answer the proposed question is an integrative
literature review. “The integrative literature review is a distinctive form of research that
generates new knowledge about the topic reviewed (Torraco, 2005, 356).” As stated above
the question of what are the basic requirements of value co-creation will be determined
through an analysis of multiple literature articles on the topic and through this analysis there
will be a concept synthesized. As the quote from Torraco (2005) says, this approach of an
integrative literature review will generate new insights into the topic and this is what is
required to answer the question.
The following steps will be taken to analyze the topic. The first step is the selecting
of literature that is to be examined. To do this the first selection step is to determine the
keywords to search for the articles. The following keywords are chosen; Service-dominant
Logic or (S-D logic); Servitization; Value creation; value cocreation; customer
co-creation; co-created value; customer interaction; customer integration; open innovation.
In the second selection step there is chosen for four databases, ScienceDirect, SAGE
publications, EBSCO host, and Emerald Insight. Keep in mind that the access to these
databases is limited to the access granted to the University of Amsterdam. This will also be
a reducing factor in the articles.
These two steps will give a good starting base for the analysis.
To further narrow down the articles for analysis, the abstract of the articles will be read. In
the abstract it will be identified if the article introduces a new framework or if it has
conducted an empirical analysis that is relevant to the
topic.
The remaining articles will be ordered in a concept matrix, which is introduced by
Webster and Watson (2002). There is chosen for a concept matrix because, “Tables and
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figures can be an effective means of communicating major findings and insights. […] They
need to add value by categorizing articles based on a scheme that helps to define the topic
area, such as types of variables examined, level of analysis, gaps in the literature, or other
important theoretical issues (Webster and Watson, 2002,xviii). ”
As stated above, the articles need to be categorized. The first level of categorical
analysis is done, by identifying on which level (micro, meso, marco) of co-creation the
research was done. The second analysis is done through categories, which are proposed by
Akaka et al. (2014), they stated that the value co-creation practices can be categorized by the
coordination of interaction, the communication of information, the integration of resources,
and the evaluation of value.
Doing these two steps of analysis will show the workings of the processes involved
with value co-creation and it will show the fundamental aspects of value co-creation
processes on each level.
Important to mention for the categorization of the articles, is that the conceptual
frameworks and findings from each article will be read and dissected.
For articles with an empirical element, the method will be reviewed to determine its
reliability.
The first two steps of the analysis have been discussed above. The databases of
ScienceDirect, SAGE publications, EBSCO Host and Emerald insights have been searched
with the stated keywords. This yielded 1303 articles. In this sample there were numerous
duplications between the databases. After deleting the duplicates and conference papers
there were 835 papers left for analysis (Appendix B.).
Many of these articles were only focusing on Service- Dominant logic approach or
Open innovation and could not contribute to the analysis.
After going through the abstract and keywords the articles were reduced to 142 articles. The
following step was to determine if the articles give proper conceptual models or empirical
analysis of an unique aspect of value co-creation, also to perceive the level of analysis and
to which categories the article was relevant. The chosen categories are coordination of
interaction, communication of information, integration of resources, and evaluation of value,
which will have given a basis for the analysis of the fundamental elements of value
co-creation. After the annotation of each article the abstracts and findings parts of the articles
were used to determine the contribution of the article to the field of value co-creation.The
overall significant contributions will be discussed in the findings.
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There is chosen for the categories because of the following reasons. The evaluation
of value is because of the basis of this aspect. What is value will determine the analysis of
the following aspect coordination of interaction. By understanding value it is easier to
determine what interaction should be followed to anticipate the value of the stakeholder.
Next is the communication of information. If the concept of value is understood and as
follows the proper interaction between stakeholders are determined. Only after this it is
apparent how the information should be communicated. This because through the
interaction the motives of the stakeholders are determined, and through these motives the
organization can determine the level of openness in access to information. Last is the
Integration of resources. This is the last step necessary to co-create value. This last step will
determine the ways value can be co-created and with the basis of previous analysis will
determine the effect of such integration.
This reasoning will be the foundation on which the conceptual model will be
build.The advantage of this methodology is that it gives an overall view of the topic of value
co-creation and its current developments. It also gives a structured approach to the problem
and helps generate a framework. The limits of this methodology are that the articles that will
be used will mostly be theoretical. The second limitation is that the concept that is created is
not empirically supported This means that the framework that is created will not be an
uniformed theory of value co-creation, but it will give a better understanding of the concept
and help future researchers to determine the necessary aspects to be examined in the
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3. Analysis
The remaining 142 articles have all been examined by reading the abstract and then
annotated to the four aspects of the conceptual model and the operational level for which the
analysis was done is also determined. After annotating the papers the output is put into a
frequency table to determine the gaps in the analysis and to show the overall contribution.
The tables are shown below. The first dimension are the Coordination of Interaction (COI),
Communication of Information (CMOI), Integration of Resources (IOR), and the Evaluation
of Value (EOV). The second dimension are the micro, meso, and macro operational levels.
Above the tables are the requirements described.
Total with all dimensions overlapping
Table 1
Dimensions 1/2 COI CMOI IOR EOV
Micro 61 50 54 57
Meso 36 27 34 34
Macro 50 49 60 53
Dimension 1 overlapping
Table 2
Dimensions 1/2 COI CMOI IOR EOV
Micro 37 28 30 31
Meso 12 5 10 9
Macro 26 27 36 27
Dimensions 2 overlapping
Table
3
Dimensions 1/2 COI CMOI IOR EOV
Micro 2 1 2 4
Meso 2 0 1 0
9
No dimensions overlapping
Table 4
Dimensions 1/2 COI CMOI IOR EOV
Micro 2 1 2 3
Meso 2 0 1 0
Macro 2 4 7 6
The frequency tables show that the analysis which are done in the articles are not
complete for each operational levels. This has not limited this paper’s analysis because it
has shown that the second dimensions are similar except in the complexity of each level.
The frequency analysis has given the systematic analysis a guide to further
determine the fundamental aspects. After the frequency tables the articles were analyzed on
the contribution the provide for the research field of value co-creation. These contribution
have been put into appendix B. These contributions were used to further the analysis on the
specific categories.
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4. the results of analysis.
The analysis of the articles will first focus on the Service - Dominant Logic
Approach (S-D Logic). the S-D Logic approach will first be reviewed because it will be the
basic postulate of the analysis. After reviewing the S-D Logic the analysis will continue by
determining the differences between micro, meso and macro levels. The following step will
analysis the proposed fundamental aspects of value co-creation in the articles. This analysis
will give the basis for the proposed conceptual model.
4.1 Basic assumptions of the analysis
4.1.1 The S-D Logic Approach
Value co-creation is a concept that arises from the Service-dominant logic approach
to the economic markets proposed by Vargo and Lusch (2006). This perspective is basis of
the article and is based on ten premises. Vargo and Lusch first introduced the concept in
2004, but they revised their perspective in 2008. These ten premises of S-D Logic are:
1. Service is the fundamental basis of exchange
2. Indirect exchange masks the fundamental basis of exchange
3. Goods are distribution mechanisms for service provision
4. Operant resources are the fundamental sources of competitive advantage
5. All economies are service economies
6. The customer is always a co-creator of value
7. The enterprise cannot deliver value, but only offer value propositions
8. A service-centred view is inherently customer oriented and relational
9. All social and economic actors are resource integrators
10. Value is always uniquely and phenomenologically determined by the beneficiary
(Williams and Aitken, 2011; Vargo and Lusch, 2006; Vargo and lusch, 2004)
Because of these premises, there is a new perspective conceptualized of the
interactions in the economic environment . This new perspective is that all stakeholders in
the economic environment are actors (Lusch and Nambisan, 2015; Mele, 2011; Akaka et al.,
2013; Vargo and Lusch, 2011). This perspective changes the concepts of the traditional
view. “in an A2A (Actor to Actor) world, the insights into context, language, meaning,
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signs, symbols, experiences, rituals, etc. apply not just to what has traditionally been thought
of as the ‘consumers’ world but equally to the ‘producers’. Likewise, what has been learned
about relationship, partnering, networks, and value, as studied in B2B, apply to the
consumers’ network.” (Vargo and Lusch, 2011, p.184) So, the economic environment is an
interaction between multiple service systems, where each actor is the central point of it’s
service system. This perspective is visually presented by the figure 1.
Figure 1. Source: Akaka et al. (2013)
4.1.2 The Operational levels (Micro, Meso, Macro)
Due to the findings given by the review of S-D Logic, the difference of the
operational levels can only be analyzed by the increased complexity of the service economic
environment. The impact of this perspective on the difference of the operational levels are
depicted in figure 2.
This perspective shows that the interactions between actors are similar between micro,
meso, and macro, but they have different ways of interactions between the levels.
At the micro level it is the interaction between the consumer and the employee
(Akaka et al.,2013). The complexity of the service environment will increase to the meso
level. at this level the customers are also influenced by other actors. at the macro level the
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complexity has risen to the point that the interactions of the actors can have consequences
on the service environment of other indirect actors. For example, the reputation of a
restaurant can influence the opinion of a community to the cuisine that the restaurant cooks.
this creating of a trend has consequences for the niche culture that was promoted by the first
restaurant. (Akaka et al.,2013)
This shows the difference in the operational levels The analysis will continue with
the evaluation of the fundamental aspects that have been proposed in the review articles.
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4.2 Value co-creation
Collaboration between actors is the most basic aspect of value co-creation. As stated
in the sixth premise of S-D Logic approach, the customer is always co-creating value.
Therefore for each co-creating moment there is a form of collaboration. Collaboration
between actors has been broken down, by Neghina et al., (2015) into relating,
communicating and knowing. for this article this framework is adapted into respectively,
coordination of interaction, communication of information, and integration of resources.
Last to be added to the proposed framework is Evaluation of value, for it will give the new
perspective of value in the S-D Logic approach. The conceptual model is represented by
figure 3.
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4.3 Coordination of Interaction
This is a sub aspect for managing value co-creation. It refers to the concepts
involved with the interaction between actors and because “relationships are always present
wherever there is an interaction between two or more parties. However, the quality of
relationships is emergent, derived from the experience of interacting together over time. It is
the quality of the relationship that can be ‘managed’, not the relationship as such, and this is
a common mis- conception”(Ballantyne and Varey, 2006). The base aspects of relating with
another actor are motivations, trust and norms. It is important to understand that the relating
process of the value co-creation, has consequences on other service systems and therefore
can produce unexpected consequences over time. With the adjusted view on the economic
environment discussed above take into consideration that “at macro or micro levels,
marketing exchange can be viewed as an open-ended process where interactions with
customers occur across time and place, as enactments of the exchange process (Ballantyne
et al., 2011).” The process of creating proper relationships is important, because
relationships that are beneficial to all parties provide structural support that is useful for
sustaining further value-creating activities (Ballantyne and Varey, 2006).”
To further develop our understanding of the relating processes the basic elements shall now
be discussed.
4.3.1. Motivation
The first fundamental aspect that will be discussed is motivation. “Motivation” can
be thought of as the antecedent condition that compels human behavior (of some form) to
occur” (Roberts et al., 2014) and “consumer motivation is impacted in direct relationship to
the potential of “value” or a “satisfying experience” ” (Roberts et al, 2014). Motivation can
therefore be seen as one of the underlying factors of value co-creation. There have been
multiple frameworks to conceptualize motivation. They all underline multiple facets of
motivation, which can be summarized in the following categories; the hedonic benefits,
personal development, altruistic, and economic factors (Lorenzo-Remoro et
al.,2014;Roberts et al., 2014; Mudhi and Boutellier, 2011).
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- The hedonic benefits are characterized by the enjoyment of a participator.
- The personal development motivation is the desire for the participator to improve
their knowledge or skills.
- Altruistic motivations are based in the desire to either improve the standing of the
actor in the community or the desire to help other and to achieve a certain common
goals.
- The economic motivations, these are monetary rewards or opportunity to improve
the actors own’ career path.
These different motivations have different impacts on the potential of the value.
Depending on the motivation of the actor it will determine the extent of information shared.
It can also improve the customers’ satisfaction. The four motivations can be divided in the
extrinsic (economic motivation) and intrinsic (hedonic benefits, personal development, and
altruistic motivations) motivations.These two categories can help to determine the primary
motivation for co-creation. To have a successful collaboration between the actors, there
needs to be an understanding of each actors goals and agenda and through this
understanding the can build an expectation of the actor involved. This openness of
motivations can only be achieved if there is trust between the actors. Trust is the following
fundamental aspect of value co-creation, that is going to be discussed.
4.3.2. Trust
“Is important in the long term relationships. It is shown that “ without receiving the
trust of another, and being trustworthy, dialogue comes to an end”(Ballantyne and Varey,
2006). Trust is therefore important in the co-creation process. For co-creation to take place
there needs to be trust of the motivation of the actors, this will determine the openness and
willingness of the actor to involve other actors. Trust is the basis for a long term
relationships (Ballentyne et al, 2011; Bastl et al.,2011).
Because the service systems are dependent on the relationships, it is important to
cultivate the trust between the actors. As stated above to have a successful collaboration it is
important to be able to know the other actor’s intent. Therefore, the total impact of trust is
shown in the collaborative relationships. The trust will make it possible for two actors to
more openly share information and goals (Chakraborty et al.,2014). This will improve the
relationship of the actors involved.
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To cultivate trust on a micro level it is important to increase the empowerment of the
actor involved. (Füller et al., 2009). For the macro level, trust is important to be established
first before there can be openness between the actors in a collaborative networks (Jarratt and
Ceric, 2015)
This trust can be cultivate on a macro level through investments in the participating actor.
“As investments are made, social capital is formed through the development of trust, and
shared norms such as the norm of generalized reciprocity. Those who invest in social
relations can expect those relations to repay at some point in the future, either directly or
indirectly. Trust and an expectation of generalized reciprocity reduce the need for formal
and bureaucratic exchange processes, resulting in greater efficiency in exchange. In
addition, trust and shared norms facilitate collective action. Social capital is this build-up or
stock of goodwill based on trust and common understandings (norms) situated within a
social network. ”(Loane and Webster, 2014)
As indicated by Loane and Webster (2014), the concept of trust will give an
common understanding of the norms between the actors. Trust has a positive
complementary effect on the formal contracts between the actors. These norms and beliefs
is another fundamental aspects. This is because differences between the actors’ norms and
beliefs will determine the success of co-creating.
4.3.3. Norms
The effect of norms and beliefs on the co-creation process are discussed in multiple
articles. The norms will be divided into three categories, cooperative norms, social norms
and cultural norms. The cooperative norms are norms that “reflect expectations the two
exchanging parties have about working together to achieve mutual and individual goals
jointly” (Bastl et al., 2012). The cooperative norms are also referred to as relational norms.
The social norms are the norms that are common in the community of the actor. the
community can be it’s country or it’s organization’s culture. The last is the cultural norms,
these are the norms that come from the cultural value of the actor. These can have effect on
the interaction between the actors, such that some symbols can be offensive for one actor
well it is a positive symbol for another actor. This difference can impact the interaction
between the actors with unexpected results. Therefore, “To collaborate in harmony
,consumers need a shared culture. Hence, a company should seek to develop compatibility
of values, norms, and patterns of behaviors among consumers and between a company and
18
the community. To promote consumers’ creation-for-others practices, a culture of mutuality
(e.g.,give and take) must be fostered.” (Nuttavuthisit, 2010)
This is the reason why “firms must expand their traditional product culture to
include a service-related climate and culture. In particular, corporate goals, norms, and
beliefs need to be updated to closely embrace customer centricity” (Benedettini, 2015). The
possibility to change the norms of actors it is important to acknowledge that “social
structures are constituted by resources and schema, and they are observable through
everyday social practices. Resources reflect entities (e.g.,factories and land), and schemas
(e.g.,socioeconomic status) reflect historically accumulated beliefs, norms, and power that
are constructed through individual action but that gradually disassociate from individuals.”
(Blocker and Barrios, 2015).
4.3.4 Conflicts
The effect of conflicts of conflicts in the interactions. These effects are similar to the
operational levels as that in complexity increases the effect of the conflicts are more
problematic. The effects are best shown in the table below produced by Mele (2011)
Figure 4. Source: Mele (2011)
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4.4 Communication of information
To discuss the communicating aspect of value co-creation it has been divided into
three concepts, these are the Forms of communications, the types of communications and
the timing of communication.
4.4.1 Forms
Communication can take up multiple forms. there have been four forms identified in
this paper. these are, informational, communicational, dialogical (Ballantyne and Varey,
2006; Neghina et al., 2015) and symbolic (Akaka et al.,2013) communication.
The first three forms are determined by the involvement of the actors in the communication.
the last form identified is for the form of nonlinguistic communication. Each of these forms
have different interpretations and different functions.
The informational communication is, for example, a commercial. The commercial is
a one direction persuasive message which is unilateral communication. The
communicational communication is characterized by the intent to inform and be informed
by the actors involved. This is done to further develop the relational norms. The dialogical
communication is determined by the involvement of both actors and the willingness to
further develop and learn from both actors (Arnold, 2015;ballantyne and varey,2006). The
last communication is the symbolic communication. This is set apart from the other three
forms because the symbolic communications are the forms of communications that are not
conveyed through language. So this can be in a form of signs or through hand gestures
(Akaka et al,2014).
4.4.2 Types
These forms of communications can be identified into four different types of
communications. These are the intentions behind the interactions. The first is the planned
marketing communication, this is similar to the informational communication. It is intended
to convey an informational message to the targeted actors (Ake and Tore, 2012). The
underlying problems with the conveying of this message can be found in the symbolic
communications. The symbolic communications can alter the intended message, these are
the unplanned communications. these can only be determined after the interaction.
The dialogue is a type of conversation where both the communicational and
dialogical forms of communications are applicable (Ake and Tore, 2012). It is determined
by the level of involvement between the actors it goes from a simple exchange of
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The last type of communication is the absence of communication (Ake and Tore,
2012). This seems self-explanatory, but this can both have negative and positive effect
depending on the situation of the negotiations.
4.5 Integration of resources
Is the aspect that determines the resources of the actor and how it integrates these
resources throughout the value co-creation process.
4.5.1 forms of resources.
to integrate resources, first the resources need to be explored. There are the tacit and
explicit knowledge. the Other forms are the interaction between actors. This has effect on
the value-in-use.
Tacit knowledge are skill based competencies of employees. Where explicit
knowledge is knowledge that can be transferred through the written word (Ballantyne and
Varey, 2006). These two forms are the basic concepts of resources. they can be exchanged
and the tacit knowledge can have impact on the value of the product sold.
4.5.2 The behaviour of Integration
The integration of resources can be done on multiple operational levels. To integrate
the resources it is necessary to understand the possible behaviors of the actors involved. The
dimensions involved have been summarized in the table below.
dimension description
participation behaviour
( Yi and Gong, 2012) Reference
1 Information seeking The customers need to have access to the information related to the service’s basic characteristics which they are going to receive. This knowledge is going to facilitate their integration in the value co-creation process
2 Information sharing It is necessary for the customers to actively participate, supplying information to the employees about the need that they wish to satisfy, as well as the specifications of the service that they expect to receive.
3 responsible behaviour In the value co-creation process, customers must cooperate with the employees, following their guidelines and orientations.
4 personal interaction Interpersonal relations between customers and employees based on courtesy, friendliness and respect are fundamental for the success of
21 the value co-creation process.
citizenship
behaviour (Vega-Vazguez et al.,2013; Yi and Gong, 2012) reference
5 Feedback The information that customers supply to the employees
(suggestions and orientations) and which facilitate the long-term improvement of the service provision.
6 Advocacy The recommendation of the firm or its employees to family and friends.
7 Helping The willingness to advise or give information to the rest of the users contributes to improving the service without the employees needing to intervene.
8 Tolerance This refers to the customers being patient when the service provision does not meet their expectations
Adapted from: (Vega-Vazguez et al.,2013; Yi and Gong,
2012)
The dimensions above are indicators of the level of involvement in the integration
process. It shows the possibilities of integration. These possibilities are then directly
influential on the possible strategies of co-creation.
4.5.3 strategies of integration
The following strategies have been determined by Chesbrough (2003).
Chesbrough has identified eight forms of co-creating. these have been divided into three
major categories. these are Funding, generating, and commercializing innovation.
Funding are divided into innovation investors and benefactors. Generating is divided into
innovation explorers, merchants, architects and missionaries. the commercializing
innovation is divided into innovation marketers and one-stop centers. Als of these
categories have different levels of involvement with the co-creation process. The funding
strategy is based on a financial involvement only. The generating strategy have different
levels of involvements. where explorers and merchants are both involved with the primary
research of new technology. the merchant is more involved with the commercializing of
their discoveries. the architecture is an organization that combines multiple actors to create a
single product. last is the missionaries, these are organizations that have a cause and focus
on determining a solution of the problem proposed by the cause. The last category is the
Commercialization. These are organizations that focus more on the successful marketing of
the finished product. where marketers also do their own research. the one-stop center only
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focus on the marketing of new discoveries and are involved with the co-creation process
through their niche in successful marketing the discoveries done in the service network, it
represents. (Chesbrough, 2003)
As shown above the levels of integrations are determined by the purpose of the
actors involve. The most involved strategies are the architecture actors. these actors function
as intermediaries between the multiple actors involved with the process. This process is also
the most impacted by the basic effects of the interaction between actors.
23
4.6 Evaluation of Value
The last aspect reviewed is the evaluation of value. To understand the concept of
value in the service-oriented environment, we first discuss the premises of S-D Logic
approach.
The three premises below indicate the basis of value in the service-oriented environment.
6. The customer is always a co-creator of value
7. The enterprise cannot deliver value, but only offer value propositions
10. Value is always uniquely and phenomenologically determined by the beneficiary
source:
Vargo
and
Lusch,
(2008)
Premise six states the co-creative properties of the customer or other actors. This is
the first aspect of value that indicates that value can only be determined by the individuals
involved with the exchange. The direct consequence of this premise is premise seven.
Because the perceived value of the actors involved determine the value the producing actor
cannot deliver value, but it can offer a value proposition. This therefore provides the tenth
premise, “value is always uniquely and phenomenologically determined by the beneficiary”.
To further understand this concept of value, we first determine the possible factors involved
with value and then review the concept of value in the S-D Logic approach.
The possible factors involved are first the traditional view on value, but it is
expanded by the experience and perceived value that can be obtained in the value
co-creation process (Ballantyne et al.,2011). So, value is first the traditional view on value,
where conventionally speaking “ a value proposition is taken to mean the marketing offer or
value promise formulated and communicated by a seller, with the intent that it be accepted
by a buyer” (Ballantyne et al., 2011).
But with the emergence of the S-D logic approach it is determined that value is
expanded by the experience of the customer. If the experience of the consumer is negative
the overall value of the product will be reduced, on the other hand if the experience was
positive the customer will perceive the product as more valuable and will be possibly start to
advocate the product and through that process co-create but also increase the value of the
product by increasing the equity of the brand involved. This Phenomenon of brand equity
has shown the impact on the pricing on the product with the increased reputation. This
increase in complexity of the “new”value proposition is represented in Figure 4.
24
Figure 4. value proposition process
25
5. Conceptual model
After reviewing the contributions offered by the analyzed articles, we will now build a
framework that will describe the fundamental aspects of value co-creation. With the
analyzed fundamental aspects the following figure give an overview of the total concept of
value co-creation.
Figure 5. Adapted from: (Vargo et al., 2006; Macdonald et al.,2011; Brodie et
al.,2006)
26
5.1 Coordination of interaction
The analysis shows that the interaction between actors is the basis of the potential of value.
The analysis shows that the all the social aspects of value co-creation has the impact on the
value. It is therefore important to determine the agenda and goals of the other actor
involved. The interaction as also the central part of the potential of conflict in the
collaborations.
5.2 Communication of information
The important part of the communication of information is an extension of the goals of
actors. To first determine the motivation of participation will give the actor a way to
determine the level of involvement that can be obtained and therefore it can determine the
way it wants to share it’s knowledge, but also determine the level of communication. It also
links back to the interaction, because through the potential of miscommunication, it can
negatively influence the trust or disrespect the norms of the reciprocal actor.
5.3 Integration of resources
The integration of resources has given the multiple resources involved with the co-creation
process. It has also determined that the behaviour of the participant can influence the
integration process. This comes again from the motivations and trust reciprocated through
the relationship. Through the level of trust and determining the motivation, the actor can
determine the strategy of co-producing with the recipient.
5.4 evaluation of value
the concept of value has changed through the S-D logic approach. This change has given
“value” a dynamic and complex definition. This complexity is created by the specific value
that each individual can give to the product depending on the events and situation the
product is used.
The process of value co-creation is best described by the former three aspects, but it is
important to be able to identify the actual perceived value by the consumer. This is because
then the exchange of products can become more transparent.
27
6. Discussion
As concluded in the conceptual model, the aspect of coordination of interaction is the
fundamental aspect of value co-creation. That is that the entire process is influenced by the
interactions between the actors involved. The determination of the fundamental aspects has
given rise to multiple questions. How would you be able to manipulate the motivation or
trust of other participants?, How could value be determined?, Are there measurable process
to determine the involvement and contribution of a participator in the value co-creation
process?
Value co-creation has, in the past, primarily been researched in the marketing field of
business studies. In this paper it has become clear that not only marketing interactions are
involved, but all interactions in general. The impression that other actors have of you will
influence the trust in collaboration and will impact the perceived value of your product.
This paper is limited in its’ contribution, because it lacks the empirical data that is necessary
to support the concepts formed. It is also limited because the research in value co-creation is
still young. This youth in the research field has given rise to multiple terminology. This
differing terminology has given an ambiguity to the concepts and has given rise to multiple
interpretation of the same term. To continue to further the research there needs to be a clear
general terminology
This paper’s contribution to value co-creation is that it gives a clear overview of the
concept.. In doing a systematic literature analysis, it has shown the fundamental aspects
involved with the process. This will give directions for future analysis. The first of this
proposed researches will be to determine the measurability of motivation and determining
the exact effect and influences of motivation on the process and on value itself.
The second research is in determining the psychological factors, which will give a positive
and negative effect on the perceived value. By understanding the psychological process
involved in forming an opinion, the actor will be able to formulate a protocol to stimulate
the positive aspects. This will also give insight in the “new” value proposition that has been
formed by emergences of the Service-Dominant Logic Approach. As this field of research is
young, it is important that the research done in this field will be more structured and that a
standardized terminology will be used, this will decline the ambiguity and will further a
more in-depth view of value co-creation.
29
7. Literature List (in article)
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