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From value coproduction to value cocreation

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Retrouvez chaque semaine des conseils pour votre étude de marché sur notre blog : …

Retrouvez chaque semaine des conseils pour votre étude de marché sur notre blog :
http://www.intotheminds.com/blog

Cette formation, donnée par IntoTheMinds à la Solvay Business School, couvre une partie importance du marketing actuel : la cocréation.


Les études scientifiques montrent que jusqu’à 60% des échecs pourraient être évités avec une étude de marché. Pourtant, les bonnes études de marché restent l’exception et les porteurs de projets confondent encore trop souvent questionnaire en ligne et étude de marché. Dans cet présentation Pierre-Nicolas Schwab, fondateur du cabinet IntoTheMinds spécialisé en études de marché et basé à Bruxelles, vous livre ses petits et grands secrets.

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  • 1. From Value Co-Production To Value Co-Creation: From Centric Value Perspectives to Value ConstellationsPierre-Nicolas Schwab pn@IntoTheMinds.com ©2010 www.IntoTheMinds.com Reproduction interdite
  • 2. Agenda1. Introduction2. Value concepts3. Co-production vs. Co-creation4. Proposal of conceptualization5. Business Case ProDegustation6. Q&A
  • 3. Agenda1. Introduction2. Value concepts3. Co-production vs. Co-creation4. Proposal of conceptualization5. Business Case ProDegustation6. Q&A
  • 4. About me• BSc, MSc, MBA (Solvay 2005)• PhD Marketing (Solvay) : 2009-2013 (hopefully)• Freelance consultant since 2003• Small-scale consultancy since 2009• Strategy & Mkt expert Brussels Chamber of Commerce• pn@IntoTheMinds.com• Blog.IntoTheMinds.com
  • 5. 1 What’s the link with co-creation ?
  • 6. 1 Mercedes SLR Stirling Moss : a by-product of co-creation
  • 7. 1 Introduction • Presentation based on PhD paper (available in extranet www.IntoTheMinds.com) • Super trendy in marketing academics (EMAC 2010) • Lot of attention in research • No clear definition (fuzzy) • Start point : 2004 (Vargo & Lusch): service-dominant logic • Questions in blue
  • 8. 1 Introduction • Begins to attract attention in « real » world : Twist (Business Week, April 2010)
  • 9. 1 Introduction • If Co-creation = creation in community, many more examples: – MyStarbucksIdea – Ideastorm
  • 10. 1 Introduction • Hilti business case (Herstatt, von Hippel), 1990’s • Co-creation = (open) innovation?
  • 11. 1 Service-dominant logic • What have you learned about the service-dominant logic? • What does value mean to you?
  • 12. Agenda1. Introduction2. Value concepts3. Co-production vs. Co-creation4. Proposal of conceptualization5. Business Case ProDegustation6. Q&A
  • 13. 2 Value concepts • 1932 : Adolf Berle & Gardiner Means « The modern corporation and private property »  CEO ≠ Owner (Rockfeller, Carnegie, Mellon, Mo rgan)
  • 14. 2 Value concepts • 1976 : Mickael Jensen & William Meckling «Theory of the firm: Managerial Behaviour, Agency Costs and Ownership Structure» CEO well-being > Shareholders
  • 15. Annual real returns2 S&P500 Value concepts 8.00% • No stat. difference 7.00% 6.00% • Modify start / end dates  no 5.00% difference at all 4.00% • Is Shareholder value the best way 3.00% 2.00% to create wealth? 1.00% • Peter Drucker : « the primary 0.00% purpose of a business is to 1933 - 1976 1871 - 1932 1977-2009 acquire and keep customers »
  • 16. 2 History of Value concepts • Aristotle: use-value (quality) vs. Exchange-value (quantity) • Middle-Age: emphasis on use- value (Dixon 1990) • Smith: distinction between value- in-use and value-in-exchange
  • 17. Concepts of value2 Payne & Holt (2001) • Nine core streams of research • Three main groups 1. key influences 2. recent perspectives 3. newer developments
  • 18. Concepts of value2 Key Influences 1. Consumer values and consumer value 2. Augmented product concept 3. Customer satisfaction and service quality 4. The value chain
  • 19. Key Influences2 Consumer values and consumer value • Consumer values = beliefs of individuals • consumer value = result of a trade-off and interaction • Is consumer value extracted? (i.e. results of destruction) • Possession value ! • Consumer values influences consumer value • Examples?
  • 20. Key InfluencesConsumer values and consumer value
  • 21. Key Influences2 Augmented product concept • Levitt (1969) • Idea = value added to the factory output (packaging, delivery, advices and services) • Choice directed by what consumers value (firm-centric) • the value of a tangible good needs to be completed by intangibles  differentiation
  • 22. Key Influences2 Customer satisfaction and service quality • Important because satisfaction  loyalty • SERVQUAL (Parasuraman et al. 1985, 1988) • PIMS (Profit Impact of Market Strategy) • What does service quality mean to you?
  • 23. Quality of service Qualité de service Aspects matériels du Habileté à résoudre les Fiabilité Interactions personnelles Policy point de vente problèmes Les réclamations sont Les produits sont de hauteApparences Commodité Promesses Réussite dans le process Inspirer la confiance Courtoisie traitées sans difficultés qualité Les employés sont Quand un client a un Layout optimisé pour rendre les Le magasin ou la marque tient Le produit est réussi du premier suffisamment formés pour Les employés servent problème un intérêt Equipements modernes recherches des clients faciles ses promesses coup répondre aux questions des rapidement les clients (parking) sincère est montré pour y clients trouver une solution Les employés informent de Les plaintes peuvent être Plan de circulation facilite les La marchandise est toujours Heures d’ouverture Point de vente attirant Les services sont fournis aux Le comportement des manière proactive le client sur visuellement déplacements des clients à heures annoncées disponible au moment où le employés inspire la confiance le temps nécessaire à la traitées par les employés l’intérieur du magasin client le souhaite adaptées à tous les clients préparation de sa commande du magasin directement Une attention particulière est Les employés ne sont jamais Large palette de moyens Accessoires « brandés » Le consommateur se sent accordée aux transactions sans trop occupés pour répondre au visuellement attirants rassuré lors d’une transaction de paiement fautes client Endroits « publics » (toilettes, micro- Une attention personnalisée est Moyen de paiement ondes, tablettes) propres et donnée au client propre à l’enseigne attirants Le niveau de courtoisie est homogène Courtoisie au téléphone
  • 24. Key Influences2 The value chain • Porter • management of the firm’s internal activities • based on the “business system” developed by McKinsey (1980’s) • some elements of customer- centricity
  • 25. Key Influences2 The value chain • Criticized by Normann and Ramirez (1993) « the focus of strategic analysis should not be the company or the industry but the value- creating system itself »  concept of value constellations to « mobilize customers to take advantage of proffered density and create value for themselves »
  • 26. Key Influences2 The value chain Where’s the link with V&L (2004)? • role of additional, non-customer stakeholders, in the creation of value • 10 years before V&L
  • 27. Concepts of value2 Recent perspectives 1. Creating and delivering superior customer value 2. Value of the customer 3. Customer-perceived value
  • 28. Recent perspectives2 Creating and delivering superior customer value • Gale (1994) and Naumann (1995) • success of a firm depends on ability to deliver to the customers what is of value to them • Gale: superior quality is essential • Naumann: quality is not enough (value triad) • What’s your feedback on the components of the value triad?
  • 29. Recent perspectives2 Creating and delivering superior customer value • New components of the value triad: emotions, brand value  intangible
  • 30. Recent perspectives2 Value of the customer • value that customers represent for the firm • Firm-centric • Impact of loyalty on benefits • Emergence of CLV
  • 31. Recent perspectives2 Customer-perceived value • Evolution of satisfaction measurement theory • Usage context • More customer-centric • Better linked with hidden needs
  • 32. Concepts of value2 Newer developments 1. Customer value and shareholder value 2. Relationship value
  • 33. Newer developments2 Customer value and shareholder value • Shareholder value: firm-centric • Customer value: customer- centric • Trade-off! • creation of shareholder value may come at the expense of customer value (Bughin and Copeland, 1997) Why?
  • 34. Newer developments2 Relationship value • So promising! • Any relationship creates value for both parties • Answers motivations for participative marketing • Recognize importance of service- profit chain • Recognizes importance of employees
  • 35. The parental links between the concepts on value
  • 36. Agenda1. Introduction2. Value concepts3. Co-production vs. Co-creation4. Proposal of conceptualization5. Business Case ProDegustation6. Q&A
  • 37. From co-production to co-creation3 • review of the literature on “customer participation in production”  1979 • 1979-1990: customer participation as a source of increased productivity (firm- centric) • mid-1980s: beginning of the shift – Partial employees (Mills and Morris, 1986) – Quality increase (Goodwin, 1988)
  • 38. From co-production to co-creation3 • 1990 - … : new themes emerge – customer’s participation  customer’s satisfaction (Czepiel, 1990) – customer participation  quality, employee’s performance, and emotional responses (Kelley et al. 1990) – customer participation  opportunity to differentiate (Song and Adams, 1993)
  • 39. From co-production to co-creation3 • 1993 : Normann and Ramirez • Marketing Earthquake • Focus on the value-creating system (see also Vargo, Maglio, Akaka, 2008) • From Porter’s linearity to value constellations • Companies’ role: companies as «reconfiguration of roles and relationships among this constellation».
  • 40. From co-production to co-creation3 Where is the word “co-creation” coming from? • Schrage (HBR, 1995): « at the core of collaboration is co- creation: customers aren’t just customizing; they’re collaborating with vendors to create unique value»
  • 41. From co-production to co-creation3 Other noteworthy milestones: • Firat et al. (1995): co-producer of the product and service offering • Wikström (1996): « the customer *…+ is coming to be seen as an active and knowledgeable participant in a common process»
  • 42. From co-production to co-creation3 Other noteworthy milestones: • Prahalad & Ramaswamy (2000): the roles between firms and consumers is shifting and the relationship changing • customers transform from a passive audience to active players.
  • 43. From co-production to co-creation3 Other noteworthy milestones: dialogue • Prahalad & Ramaswamy (2004): – Extensive use of the wording “value Co- Risk-benefits creation access co-creation” of value – Official debut of “co-creation” – Death of unilaterality of the transparency marketing offer – Increasing bargaining power of buyers WHY?
  • 44. From co-production to co-creation3 Other noteworthy milestones • Grönroos (2008): if customers are co-creators of value, what is the role of the firm? • Payne et al. (2008, 2009): first attempt of framework – customer value-creating processes – supplier value-creation processes – encounter processes (relationship value)
  • 45. Payne et al. (2008)
  • 46. Payne et al. (2009)
  • 47. So what ?3 • What is actually value co- creation? • A fade? A real marketing breakthrough? • Managerial implications?
  • 48. Agenda1. Introduction2. Value concepts3. Co-production vs. Co-creation4. Proposal of conceptualization5. Business Case ProDegustation6. Q&A
  • 49. Value co-creation: Historical perspective • Late 1970’s: Co-production • Late 1990’s: Co-creation4 • 70’s and 80’s: – tasks from the firm to the customer – Customer is a resource: the last employee in the chain Example: IKEA (1984 Zaventem, 1978 The Netherlands, 1981 Bobigny)
  • 50. Value co-creation: Historical perspective • Late 1980’s: service-based satisfaction model4 • «The consumer is usurping the privileged status previously accorded to the producer» (Bendapudi and Leone ,2003)
  • 51. Value co-creation: historical perspective4
  • 52. Value co-creation: Historical perspective • Co-production: firm-centric perspective4 • Co-creation: customer-centric perspective
  • 53. Value co-creation: co-creation opportunities • No paper summing up the different co-creation4 opportunities • first concrete examples = do-it- yourself (Fitzsimmons, 1985)
  • 54. Value co-creation: co-creation opportunities 1. Do-it-yourself – customer is in charge of the last4 step(s) of the process – Low-cost businesses (but not only)
  • 55. Value co-creation: co-creation opportunities 2. Design of custom-made solutions /customization4 – From Ford T to Citroën DS3 – GE plastics platform (Kalaignanam & Varadarajan, 2006)
  • 56. Value co-creation: co-creation opportunities 3. Interactions / involvement / participation4 – Relationship value  interactions – Perhaps the most obvious co- creation opportunity – Role of emotions
  • 57. Value co-creation: co-creation opportunities 3. Interactions / involvement / participation4 – Raidlight : “This product has been improved with knowledge and experience of all Raidlight Team. We asked our customers their point of view when we developed this product and we would like to really thank for their advises…”
  • 58. Value co-creation: co-creation opportunities 4. Community and network effects – Thin boundary with customer4 participation – community co-creates by itself – Community = owner – Very trendy with plenty of new businesses (GetSatisfaction, Brandialog, Dell Ideastorm, SalesForce, …) What are the positive / negatives aspects ?
  • 59. Value co-creation: co-creation opportunities 5. Brand Experience – word “experience” used by many4 scholars to illustrate co-creation processes – «experience and perception are essential to value determination» (Vargo and Lusch, 2004) – value co-creation in the luxury goods business are based on an experience of the brand (Tynan et al., 2009) What is brand experience to you?
  • 60. Value co-creation: co-creation opportunities 5. Brand Experience –«4 sensations, feelings, cognitions, and behavioral responses evoked by brand-related stimuli that are part of a brand’s design and identity, packaging, communication s, and environments» (Brakus, Schmitt and Zarantonello, 2009) – Product experience vs. Service experience – Experience focused on consumption
  • 61. Value co-creation: co-creation opportunities4
  • 62. Business Case ProDegustation5
  • 63. Business Case ProDegustation • Thomas Cabrol & Steven Dillingham founded Prodégustation in 20005 • Leader in France (currently 60- 70% market share) • In 2006 : – 350 to 400 sessions/y – 3.4% loyalty (yearly basis) – Low profits – threats
  • 64. Business Case ProDegustation (in 2005)5
  • 65. Business Case ProDegustation Idea: involve customers (2006) to • Develop new products to increase repurchase intention5 • Correct mistakes / issues in existing products • Gather the team around clients • Create emotional bonds
  • 66. Business Case ProDegustation The steps: • Identification of 100 best customers (no CRM at that time)5 • Private contact with each of them • 2-day brainstorming session (not paid !) in Paris
  • 67. Business Case ProDegustation The results: • New products developed within 48 hrs5 • Loyalty rate went from 4% to 25% within 3 years
  • 68. Business Case ProDegustation (in 2010)5
  • 69. Business Case ProDegustation (in 2010) Evolution KPIs ProDegustation from 2005 to 2011-2012 120 12 thousandsns of orders or % (loyalty rate and WOM) k€ (investments) 100 105 80 8 60 6 40 4 20 2 0 0 11/05 - 11/06 11/06 - 11/07 11/07 - 11/08 11/08 - 11/09 11/09 - 11/10 11/10 - 11/11 11/11 - 11/12 (extrapolation) (projections) First clients returning customers orders from abroad orders partners advertisment investments investments website loyalty rate WOM
  • 70. Q&A • www.IntoTheMinds.com (presentation available on extranet) • Blog.IntoTheMinds.com (in French and English) : ideas and6 thoughts about marketing, satisfaction, loyalty and entrepreneurship) • pn@IntoTheMinds.com

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