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Conceptualising value co-creation: A
journey to the 1970s and back to the
future
Christian Grönroos
a
a
Hanken School of Economics, Finland
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A journey to the 1970s and back to the future, Journal of Marketing Management,
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2. Journal of Marketing Management
iFirst, 2012, 1–15
Conceptualising value co-creation: A journey
to the 1970s and back to the future
Christian Grönroos, Hanken School of Economics, Finland
Abstract Service-Dominant (S-D) Logic asserts that firms and customers always
co-create value. This article argues that the co-creation of value term, as used
by Vargo and Lusch (2008), is strongly metaphorical in its construction, and this
metaphoric form acts as a barrier to focused empirical analysis. An alternative
conceptualisation is offered. It is argued that value co-creation can be defined
as the joint actions by a customer (or another beneficiary) and a service provider
during their direct interactions. Value creation in such interactive contexts was
studied as early as the 1970s in the early days of modern service marketing
research. This article relies on two models from that time to develop a value
co-creation logic and a conceptual model of value co-creation as an alternative
schema to S-D logic.
Keywords value co-creation; value-in-use; service logic; Service-Dominant Logic
Introduction and purpose
It is challenging to develop analytical, operational models of value co-creation.
To meet this challenge and further develop service logic literature, this article
defines value creation for a customer as the customer’s creation of value-in-use.1
Consequently, co-creation of value relates only to those stages of a value-creation
process where the firm is present together with the customer. In the present article,
value co-creation is defined as joint activities by parties involved in direct interactions,
aiming at contributing to the value that emerges for one or both parties. These
activities are only part of total value formation, because the customer’s other
experiences in direct interaction and with their outcomes also contribute to total
experienced value (value-in-use).
Value creation is a fundamental cornerstone of the service perspective on
marketing (i.e. service logic and Service-Dominant (S-D) Logic).2
Discussions on S-D
1‘In-use’ not only denotes physical use but also mental use and even possession. Hence, value-in-use can
emerge from both physical and mental use of a resource or from mere possession of it.
2Because it is a perspective on business and marketing that is not only dominated by but also based on
service, this article features the term service logic. Service is the mental model or dominant logic (Prahalad
& Bettis, 1986) that guides the use of this perspective.
ISSN 0267-257X print/ISSN 1472-1376 online
© 2012 Westburn Publishers Ltd.
http://dx.doi.org/10.1080/0267257X.2012.737357
http://www.tandfonline.com
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3. 2 Journal of Marketing Management, Volume 00
logic frequently indicate that all value creation is co-creational and that both service
providers and customers are always co-creators of value (e.g. Vargo & Lusch, 2004,
2008). But service logic literature notes that co-creation requires direct interaction
between the co-creating parties which is a consequence of joint activities (e.g.
Grönroos, 2011; Grönroos & Ravald, 2011). Regardless of the perspective, research
acknowledges that the components of value co-creation require further study. At the
same time, researchers note the difficulty of studying this phenomenon analytically
(Payne, Storbacka, & Frow, 2008).
Therefore, this article aims to develop a conceptual model of value co-creation
that includes all the elements needed to understand, plan, and respond to customer–
firm interactions in a way that supports both the customer’s and the service provider’s
value creation. This model evolves from service research that goes back to the 1970s
and offers an alternative view on value co-creation to that of S-D logic. Value is an
elusive concept (Woodall, 2003). In the literature, value is understood in a number
of different ways (Grönroos, 2008, pp. 281–282; see also Ramírez, 1999), and value
creation has been described as one of the most ill-defined and elusively used concepts
in service marketing (Carú & Cova, 2003). Therefore, for the purpose of the present
article, we consider value creation as a process through which the customer becomes
better off (or worse off) in some respect (Grönroos, 2008, p. 303) or which increases
the customer’s well-being (Vargo, Maglio, & Akaka, 2008).3
The term ‘creation’
implies that the effect on value of customers’ experiences is positive, but customers’
co-creation experiences may also have negative, destructive effects (Echeverri &
Skålén, 2011).
Moreover, the term ‘value creation’ indicates that value is always instrumentally
created (e.g. driving a car to a certain destination), though in many situations value
simply emerges (e.g. a feeling of freedom when driving around in a car). Because the
expression ‘value creation’ is so generally accepted in extant literature, this article
retains it, with the recognition that its connotations are not necessarily accurate,
and use it and value emergence interchengeably. In the context of this article,
value co-creation explicitly may have both positive and negative impacts on value
formation for customers, and it may be instrumentally created or just emerge from
customers’ experiences.
To develop a value co-creation model, a clear definition of value co-creation is a
prerequisite. Management literature uses co-creation metaphorically to emphasise
that suppliers need to recognise the role of customers in value creation.
As Ramaswamy (2011) points out in his analysis of co-creation concepts, the phrase
‘co-creation of value’ serves as an all-encompassing expression to denote mutual value
creation by the actors, such that, in the business engagement, both (or several) parties
contribute to the value being created (Normann & Ramirez, 1993). Some actions
may be independently value creating, some facilitate value creation for another
party, and others are joint value-creating activities or value co-creation together
in direct interactions. Yet the common term ‘co-creation’ is used to represent all
these varied activities. A metaphor is not literal; thus the expression ‘the customer
3Grönroos (2008) defines value for customers in the following way; ‘Value for customers means that after
they have been assisted by a self-service process (cooking a meal or withdrawing money from an ATM) or
a full-service process (eating out at a restaurant or withdrawing cash over the encounter in a bank) they
are or feel better off than before’ (p. 303).
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4. Grönroos Conceptualising value co-creation 3
is always a co-creators of value’ (Vargo & Lusch, 2008) should not be interpreted
literally either.4
Co-creation as a metaphor or analytical concept
Morgan (1986) advocates the use of metaphors to create perspectives on
organisational issues: ‘The use of metaphors implies a way of thinking and a way
of seeing’ (p. 12; emphasis in original) and provide ‘. . . a means of enhancing
our capacity for creative and disciplined thought’ (p. 17). As Cornelissen (2004,
pp. 705–706) notes, metaphors may provide new insights into the reality of what
is studied. When using metaphors, ‘. . . participants actively and collectively create
a representation of their strategic territory’ (Heracleous & Jacobs, 2008, p. 310).
On the other hand, as Morgan (1980) observes, an object that is studied may also
be ‘. . . imprisoned by its metaphors’ (p. 605).5
We can conclude that metaphors
can be used as a means of stimulating thinking and helping researchers look at a
phenomenon in new ways but not to predict how a phenomenon will function in its
entirety.
To emphasise the importance of activities by firms and customers (and possibly
other actors in a network) to ensure value for the customer ultimately, without
addressing the specific roles of the actors involved, this metaphorical usage of the
expression ‘value co-creation’ works well. A reader’s attention is effectively drawn
to the recognition that value for customers cannot be created by the firm alone
(Normann & Ramirez, 1993). To say that value is collaboratively created also guides
researchers to remember that value does not emerge by actions by one party but that
actions by several parties are required. However, it does not specify the roles of these
actors during the process.
Although the co-creation metaphor thus offers guidance for further analytical
developments by asserting that the customer is involved in a process that results
in value for the customer, it cannot define the roles of the various actors and the
existence of unique elements and sub-processes. For this effort, analytical concepts
are required. The firm as a service provider produces resources and provides them
to the customer who uses the resources by integrating them with other available
resources during a usage or consumption process. In parts of this process, the
firm and customer act jointly in direct interactions. Therefore, the value-formation
process includes three distinct sub-processes: (1) the firm acts alone and facilitates
the customer’s creation of value-in-use; (2) the customer acts alone by integrating
available resources in a process that is closed to the firm (Grönroos & Ravald, 2011),
thus experiencing the resources and creating value-in-use for him- or herself; and
(3) the firm and the customer act together in a merged, coordinated, dialogical, and
4As described in the Collins English Dictionary (1999), a metaphor is ‘a figure of speech in which a word
or a phrase is applied to an object or action that it does not literally denote in order to imply resemblance’
(p. 928), and Oxford Dictionaries (online edition 2012) defines a metaphor as ‘the application of a name
or descriptive term or phrase to an object or action to which it is imaginatively but not literally applicable’.
An often-used example of a metaphor is ‘he is a lion in battle’ (see, e.g., Collins English Dictionary), which
does not mean that the person is literally a lion. In the same vein, the expression ‘customers and firms are
always co-creators of value’ should not be interpreted literally, such that the parties literally create value
together in time and space.
5For alternative discussions of metaphors in organisation and management research, see, for example,
Oswick, Keenoy, and Grant (2002) and Pinder and Bourgeois (1982).
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5. 4 Journal of Marketing Management, Volume 00
interactive process that creates value for the customer, and for the firm as well – using
the strictly analytical meaning of the expression, they co-create value (Grönroos,
2011).
An analytical approach would set out to develop models of collaborative
value creation, including independently occurring value-creation efforts, activities
facilitating the other party’s value creation, and joint collaborative activities during
direct interactions between two (or more) parties. As part of this overall model,
the joint value-creating activities during direct interactions could be studied and
developed conceptually. This article makes such joint value-creating activities the
main focus (see also Grönroos, 2011; Grönroos & Ravald, 2011). Thus the
expression ‘value co-creation’ is reserved for this phase within an overall range of
possibilities for collaborative value formation. That is, co-creation of value is defined
as joint collaborative activities by parties involved in direct interactions, aiming to
contribute to the value that emerges for one or both parties.
As noted, in many situations, value is not instrumentally created but rather emerges
from customer experiences. Following Ravald and Grönroos (1996), this article uses
the term ‘value formation’ to denote the process by which value either emerges or is
created for customers (Echeverri & Skålen, 2011). However, for the joint activities
of several parties (e.g. service provider and customer), which influence the value-
formation process, such that value reflects the parties’ direct actions, this article uses
the expression ‘co-creation of value’.
According to Gupta and Lehman (2005), in a business engagement, value gets
created for all parties. Referring to insights from the French nineteenth-century
economist Frédèric Bastiat (1848), Vargo and Lusch (2008) point out that when
providing service to a customer, the service provider potentially receives some service
in return, such as information that customers provide that can be used to develop new
services or systems. Consequently, any model of value co-creation must account for
this reciprocity of value creation.
Co-creation in early service marketing research
An analysis of service marketing literature shows that joint interaction-related
co-creational aspects of service processes – that is, simultaneously occurring service
production and consumption processes – were thoroughly studied in the 1970s in
the very earliest days of modern service research. Service marketing publications
developed conceptual models of how service is co-produced and emerges in
direct interactions between service providers and customers through co-creational
processes. In the 1970s, co-production between service providers and users was
also discussed in economic analysis (see Hill, 1977), where service was defined as
a change in the conditions of a person or a good belonging to a person caused by the
activities of another party (Hill, 1977). Elaborating on Hill’s definition, Delaunay
and Gadrey (1987) defined a service activity as an operation aiming at bringing about
a change of state in the condition of a user effected by a service provider, and often
in collaboration between the user and the service provider (Delaunay & Gadrey,
1987; for an extensive discussion, see Gadrey, 2000). Implicitly in Hill’s arguments
for his definition and explicitly in Gadrey and Delaunay’s definition, service is seen as
an interactive process. In service management, the decisiveness of interactions were
emphasised by using a moments-of-truth metaphor, introduced by Richard Normann
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6. Grönroos Conceptualising value co-creation 5
(1984) and made popular by Jan Carlzon (1987). Co-creation and value concepts
were unknown in service marketing research at that time, so the models of the
1970s aimed to analyse how service emerges. However, they also include an implicit
understanding that the service that emerges and is experienced by customers should
be appreciated by them. To use today’s terminology, value should emerge, or be
created, in interactive processes.
Therefore, it may be possible to develop a conceptual model of value co-creation
in service, consisting of resources and actions present in direct customer–firm
interactions, on the basis of early service marketing research, such as the servuction
model developed in France by Eiglier and Leangeard (1975, 1976) and the interactive
marketing model developed in Finland by Grönroos (1978, 1984).6
The servuction
model focuses on value-creating resources; the interactive marketing model is more
interested in how such resources function in direct firm–customer interactions.
In North America, Shostack (1977) presented a molecular model that resembled both
European models; it proposes that services consist of bundles of elements that exist
in a molecular fashion.
By similarly combining the models from the French and Nordic schools of thought,
this study derives a model of value co-creation. Continued research after the 1970s
certainly details various elements of the service encounter, and more recent studies
include service as a perspective on marketing and business, for both service- and
goods-based firms. However, because the purpose of this article is to study how
value co-creation can be understood and operationalised using the foundation of
early modern service marketing research, it excludes later research.
The servuction model
The French school model7
categorises resources required for co-production and
co-creation activities during direct firm–customer interactions. The model adopts the
view that the service is co-produced in interactions. Thus service emerges through
the process and is experienced by the customer. In value-creation terminology, these
resources can be described as the value-creating resources that appear in direct
interactions between parties. As illustrated in Figure 1, the model divides these
resources into four categories: contact employees (e.g. service personnel), physical
resources (artefacts, systems), focal customer (Customer A) and fellow customers
(Customer B, who is also present during the service process). The active role of
customers as service production resources and participants in the service process
was noted not only by Eiglier and Langeard (1975, 1976) but also, for example,
by Gummesson (1979), Lehtinen (1983), and Normann (1984).
Because services are partly open processes, a customer interacts in a service
environment, which Bitner (1992) labels the servicescape, with other people,
artefacts, and systems that appear in that environment. The group of people can
consist of two types: employees acting on behalf of the service provider and fellow
customers present in the environment. The servuction model emphasises the need to
recognise the role of fellow customers and their influence on the service experience
of a focal customer. Originally, the model also included physical resources, but this
category must be interpreted broadly to include not only resources as such but also
6For a discussion of the French and Nordic schools of service marketing thought, as well as the North
American school, see Berry and Parasuraman (1993).
7The term ‘servuction’ was actually introduced somewhat later to denote this model (Langeard & Eiglier,
1987).
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7. 6 Journal of Marketing Management, Volume 00
Figure 1 The servuction model by Pierre Eiglier and Eric Langeard (1975, 1976).
Service for Customer A is a function of interactions
between
- Physical resources and A
- Contact employees and A
- Customer B and A
Physical resources
(goods, tangible items,
systems)
Contact employees
Customer A
Customer B
Service
for
Customer A
Internal
Support
System
systems of various kinds. In the decades since, the types of systems have developed
to include, among others, Internet-based and mobile systems.
Somewhat later, Lehtinen (1983, 1986) studied the interdependence among the
various resources active in the service process, as indicated in the original model,
and noted the importance of a fit across resource categories. In that context, he
highlighted the concepts of a contact person’s style of performing and the customer’s
style of consuming, such that physical resources influence these styles in any given
situations (Lehtinen, 1983). Gummesson (1979) also emphasised the active role
of service employees in shaping customers’ perceptions, whom he subsequently
labelled part-time marketers (Gummesson, 1991). In his service management system,
Normann (1984) pointed to the importance of employees who have not just the
right skills but also personalities that fit the nature of the service encounters and the
firm’s business norms (see also Normann, 1977). Service firms are not just personnel
intensive but also personality intensive.
Behind the line of visibility (Shostack, 1981), an internal support system aims to
support the resources for the parts of the service process that are visible to customers
and in which they take part. From a value co-creation point of view, the support
system is not directly of interest. Only when considering value for the firm does it
become important.
The interactive marketing model
The Nordic school model demonstrates how the value-creating resources of the
servuction model function in direct collaborative interactions between a service
provider and a service user. Again using value-creation terminology, the model
develops activities of action variables that function in the directly interactive part
of the value-formation process. As illustrated in Figure 2, the model divides
these variables into three main categories: accessibility, interactive communication
(between contact employees and customers, as well as between customers), and
customer influence (by the focal and other customers present) on the service
process (later termed customer co-production or customer participation in the service
process).
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8. Grönroos Conceptualising value co-creation 7
Figure 2 The interactive marketing model by Christian Grönroos (1978).
Service Concept
Acccessibility
of Resources
Communication
Customer -Employees
Consumer Influence
(customer participation;
and co-production;
peer communication)
(Auxiliary services)
The experiences with the service is dependant of
-The accessibility of resources
-Communication in customer –employee interactions
-The customers and fellow customers influence on the process
-Peer communication between customers
The action variables are clearly interrelated. For example, fellow customers
may alter the accessibility of a service by creating queues and longer wait times.
They also may interfere with communication in the interactions between the focal
customer and a contact employee. As Echeverri and Skålén (2011) argue, value
created in interactions results from value practices, such as informing, greeting,
delivering, charging, and helping. Value also may be destroyed during customer–
firm interactions, so it is necessary to create fit between value-creating resources and
the way they function, because ‘interactive value formation – value co-creation as
well as value co-destruction – derives from providers and customers drawing on
congruent . . . and incongruent elements of practices’ (Echeverri & Skålen, 2011,
p. 370). Lehtinen (1983) emphasised this concept as well. Therefore, the value
concept implicit in both the servuction and interactive marketing models allows for
positive and negative service experiences, or value creation and value destruction.
The many accessibility resources are varied, as listed by Grönroos (1990):
Accessibility of the service depends, among other things, on:
– The number and skills of the personnel;
– Office hours, time tables, and the time used to perform various tasks;
– Location of offices, workshops, service outlets, etc.;
– Exterior and interior of offices, workshops, and other service outlets, etc.;
– Tools, equipment, documents, etc.; and
– The number and knowledge of consumers simultaneously involved in the
process. (p. 76)
In addition, the way websites and mobile interfaces can be accessed and navigated,
as well as how they respond to customer actions, has an impact on accessibility.
Depending on how they experience these and other factors, customers consider
it easy, acceptable, difficult, or, in the worst case, impossible to access the service
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9. 8 Journal of Marketing Management, Volume 00
process, which determines how the service emerges for them. The more positive the
effect, the more strongly the perceived accessibility in customer–firm interactions
contributes to value formation. Negative experiences instead may lead to value
destruction.
Interactive communication takes place in all dialogical situations between
customers and contact employees. Drawing on the observation that all types of
interactions between customers and the representative elements of the firm also
communicate something – namely, that all interactions are sources of communicative
messages (Duncan & Moriarty, 1997) – interactive communication should stem from
situations in which customers react to the performance or mere existence of some
type of accessibility resource, including artefacts, processes, systems, and fellow
customers. Interactive communication thus includes (Grönroos, 1990):
• Dialogue between contact employees and customers, depending on the attitudes,
behaviours, and communication skills of the employees, what they say, and how
they say it;
• Interactions of customers with physical resources and tangible items in the
service process;
• Interactions of customers with systems of various kinds; and
• Interactions with fellow customers who are simultaneously present in the service
process.
Finally, customer influence and participation8
include customers’ capability and
willingness to co-produce the service. Customers must have the knowledge, skills,
and insight required to perform their tasks for the service to be performed. They also
must be motivated to do so. Depending on how customers perform their tasks, the
service that emerges differs. Customers who are prepared and willing to perform
a task, such as preparing a complex document required to advance the service
process, will probably receive better service. From a value-formation perspective,
these customers’ impact will be co-creative. In cases in which customers cannot or do
not want to perform tasks, the interactions will suffer, and the value impact will be
co-destructive.
A synthesis: Value co-creation model
By combining the resource categorisation from the servuction model with the
resources-in-action variables of the interactive marketing model, it is possible to
derive a model of value co-creation in service. This model is based on the notion
that customers create value through usage as value-in-use and that the co-creation of
value therefore takes place in joint collaborative activities during direct interactions
of the parties. The content of the resource categories has evolved over time, but the
same categories still hold, as do the action variables. New accessibility resources and
8Customer participation was used by Richard Normann (1984) in his service management system to denote
the customer’s role in the system and by Jarmo Lehtinen (1986) in a study of the range of service firms to
define how customers’ activities influence the service they receive.
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10. Grönroos Conceptualising value co-creation 9
Figure 3 Conceptual model of value co-creation in service.
Physical
Resources
(goods, tangibles,
systems)
Contact
employees
Focal
customer
Fellow
customers
Accessibility Effect
(physical, mental, virtual)
Interactive
Communication
Peer
Communication
SERVICE
CONCEPT
EXPERIENCED
SERVICE
(Outcome + Process)
RESOURCE
CATEGORIES ACTIVITIES
Notes: The area inside the dotted circle denotes the value co-creation platform. Depending on how
actively and successfully it is used by the parties, the co-created value effect differs.
new means of creating accessibility have emerged, as have new communication tools,
but the basic structure of the model holds, as illustrated in Figure 3.
Co-created value for the customer
The service concept, or what the service provider wants to achieve and for whom, is
the starting point for developing a service offering, and the service process is where
the service emerges for customers. A service concept should include a statement of
benefits for customers. According to the perceived service quality model (Grönroos,
1984), consumers assess the quality of a service according to their experiences of
both what they get as an outcome of the service process (technical quality) and
how they experience the interactive part of the process (functional quality; see also
Lehtinen & Lehtinen, 1991). Customers’ value formation follows the same pattern.
During the interactive part of the service process, value is co-created jointly by the
service provider and the customers. The service concept is the starting point; the
experienced service is the end point. However, though the outcome of the service
process is experienced at the end of the process, the process itself, as part of the
service experience, is experienced throughout its progress. Between the starting and
end points, various direct interactions that constitute value co-creation opportunities
take place. The interactions are only a platform for co-creation that must be used by
the parties in a way that influences the value-formation process. In the worst case, it
is mishandled and leads to the destruction of value for customers.
The middle part of Figure 3 depicts the value co-creation platform. The resources
available for co-creation activities are to the left, and the activities enabled by use of
these resources are to the right. As previously noted, the servuction model defines
four categories of co-creation resources: physical resources, contact employees, focal
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11. 10 Journal of Marketing Management, Volume 00
customer, and fellow customers. The arrows in the middle of the figure denote which
co-creation activities these resource categories trigger. Depending on the progress
of the interactions between the focal customer and the other types of resources,
the service becomes shaped in various ways, and value formation takes different
forms. As Grönroos (2011) points out, ‘value(-in-use) is accumulating, or destroyed,
throughout this (service) process. It is not determined at the end of the process
only’ (p. 287). Therefore, value creation and destruction can occur during the same
interactive process. Moreover, independent value creation based on experiences with
the outcome of the service process may contribute favourably or unfavourably to the
customer’s assessment of value.
The value co-creation model, as suggested by the service logic, is also applicable
in contexts in which firms supply physical products (goods) as the core of their
offerings. The products form one physical resource in the process, such as artefacts
and systems, together with employees and possibly fellow customers. As Giarini
(1999/2000) states, ‘for each product we buy, be that an automobile or a carpet, cost
of production or of manufacturing is very seldom higher than 20 per cent’ (p. 3). The
rest of the cost stems from various services, such as logistics, maintenance, customer
training, invoicing, engineering, software upgrading, and recycling – all of which are
part of what customers experience and which influence the value that emerges for
them. Some experiences with the product take place in direct interactions with other
resources (e.g. test driving a car accompanied by the salesperson), but many of them
probably take place afterward, during independent value creation activities beyond
the value co-creation platform (e.g. driving the purchased car).
In the interactive marketing model, the activities or action variables in the
co-creation process are the accessibility effect of interactions with various kinds
of resources, interactive communication between the focal customer and contact
employees, and peer communication among customers. Accessibility effects are
often physical, but they may be virtual or even mental. Thus, stemming from the
accessibility of resources and systems, both physical and emotional effects arise, both
of which may affect the value-formation process and are caused by actions that take
place on the value co-creation platform.
Interactive communication between customers and contact employees can take
many forms and be initiated by either party. It is dialogical in nature, but it may
not always lead to a dialogical process. It could have a positive effect on the
value-formation process, leading to value creation, or it may have a negative effect,
leading to value destruction. Finally, peer communication only takes place between
customers, but actions by fellow customers could interfere with communication
between the focal customer and a contact employee.
Co-creation-based value for the service provider
Value created for the service provider through direct interactions with its customers,
or co-creation-based value, follows the same direct interaction process, illustrated in
Figure 4.
In this figure, the value-creation process flows from right to left. The starting
point is a customer participating in the service process, which enables direct
collaborative interactions. The resource categories in action are physical resources,
contact employees, and the customer. The customer may be a single person or a group
of customers simultaneously present in the service process. The amount of customer
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12. Grönroos Conceptualising value co-creation 11
Figure 4 Conceptual model of value co-creation in service: value for the service
provider.
ACTIVITIES
Accessibility
of Customer
Feedback
Interactive
Communication
RESOURCE
CATEGORIES
Physical
Resources
and Systems
Customer
Contact
Employees
Internal
Support
System
Customer
Feedback
Input
CUSTOMER
PARTICIPATION
ACTIONABLE
INFORMATION
Notes The area inside the dotted circle denotes the platform for value co-creation. The level of customer feedback
input varies, depending on how effectively the firm manages to make use of it.
input the firm receives depends, primarily, on how well the service provider manages
to gain access to customer feedback, which reflects how willing customers are to
provide feedback during the service encounter. It depends further on how well service
employees are prepared, receptive, and willing to register such customer input.
Behavioural feedback is easier to access because it appears in normal interactions,
but the receptiveness of contact employees is critical in this case. Customer input
emerges during interactive communication processes with contact employees, and
also as observations of how customers relate to physical resources and systems in the
service process. By enabling customers to provide feedback, using Internet-based and
other systems, the service provider creates accessibility to customer feedback as input
for the firm’s developmental processes. Provided that the customers decide to make
use of such systems, the firm can get access to useful feedback in this way as well.
The arrows in the figure denote how resource categories influence the various ways
customer input emerges.
The interplay between the resource categories and activities or action variables
in the model determine how much input from customers is acquired and how it is
acquired. However, to create value effects for the service provider, this input also
must be registered, processed, and turned into actionable information that produces
developments through an internal support system. Typically, this system includes
reporting systems, monitored by supervisors and managers, who register, evaluate,
and use customer input. If improved resources and systems that contribute to better
future value experiences by the customers arise, the value for the firm as co-creation-
based value has emerged from the same value co-creation process that generated
customer value. However, in this case, the customers are value facilitators, and the
firm is the value creator.
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13. 12 Journal of Marketing Management, Volume 00
Conclusion and discussion
When value co-creation is related to direct collaborative customer–firm interactions
and not used just to denote actors’ unspecified roles in the value-formation process,
models from the early days of modern service marketing research can help clarify
and conceptually shape the notion of value co-creation. These models demonstrate
how service emerges in interactions between sets of resource categories, as well as
how such interactions function to influence customers and value formation. The
resource categorisation of the servuction model (Eiglier & Langeard, 1975, 1976)
and the action-oriented interactive marketing model (Grönroos, 1978) offer a strong
foundation for developing a model of value co-creation that includes both co-creation
resource categories and co-creation activity categories. However, the model is a value
co-creation platform only. The strength of the influence on the value-formation
process by activities taken by the parties depends on their willingness, motivation,
and skills to perform in a way that contributes to value formation. Furthermore,
value can be influenced negatively by destructive actions on the platform.
Using the reciprocity of value creation in service, the same interactive process
that contributes to the emergence of value for customers has the potential to create
co-creation-based value for the service provider. To do so, the resources in service
encounters representing the service provider, especially service employees, must be
receptive to registering valuable feedback from customers and their reactions, and
through an internal support system that processes this input the firm must be able to
use it for developmental activities. The firm must be prepared to receive customer
input and make use of it.
Early service marketing models provide a solid base for understanding and
developing value co-creation further. More recent research has added other
aspects, such as the servicescape concept (Bitner, 1992), but without changing the
fundamentals of the model. New technologies and communication opportunities
have expanded ways of working and communicating, such as peer communication
during a service process using Twitter and other technologies. But again, these
changes do not alter the basic nature of the model.
Research and management implications
To understand the total value-formation process analytically, it is necessary to assess
the actions taken by the firm, value facilitation, and independent value-creating
activities taken by the customer, as well as joint collaborative value-creating activities,
separately. Only the last sub-process is studied herein. The proposed conceptual
models of value co-creation can enable researchers to analyse the value effects of
the joint, directly interactive phase of value formation that takes place during service
encounters. By studying how effectively the accessibility of various resources in
service encounters enhance value for the customer, and for the service provider
in a reverse model, as well as how well interactive communications support value
creation for the service-providing parties, it becomes possible to assess how well the
flow of the process in a service encounter contributes to value-formation processes
and its impact on the value that emerges. Moreover, researchers can assess how
peer communication between customers simultaneously present in the service process
affects value creation.
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14. Grönroos Conceptualising value co-creation 13
The model of value for the firm emphasises that customer feedback that emerges
from the service encounter does not automatically materialise as value for the service
provider. A preparedness to use customer feedback must exist, and an effective
internal support system is required, which manages to process the input and turn
it into actionable information. The model indicates the importance of managing
such a support system, which should trigger further research into this mediating
phenomenon in the use of customer feedback.
Indirectly, the model also enables investigations of how service providers
facilitate creation of value as value-in-use. The resource categories in the model
demonstrate which elements support value co-creation, favourably or unfavourably.
Thus researchers and managers can assess the effectiveness of service encounters.
Moreover, they should trigger studies of how the accessibility of resources and
systems, interactive communication between service employees and customers, and
peer communication between customers influence the flow of the service processes, as
well as how value for customers emerges in the service encounter through co-creation
activities. From a managerial perspective, the proposed model demonstrates where
managers should direct their attention when planning and implementing service
encounters to ensure a positive co-creational impact on customers’ value creation.
Finally, value co-creation during direct interactions of service encounters is only
part of a customer’s value-creating process; the model connects value co-creation
to the customer’s independent value creation. Thus it enables analyses of how the
value outcomes of the co-creation activities of the direct collaborative interactions
influence the continuation of value formation. Customers use resources provided to
them during service encounters and integrate them into continued usage processes
(e.g. wearing a clean shirt retrieved from the cleaners, driving a car bought from a
car dealership or serviced by its workshop).
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About the author
Christian Grönroos is professor of service and relationship marketing at Hanken School
of Economics, Finland, and founder of its research and knowledge centre, CERS (Centre
for Relationship Marketing and Service Management). He is a pioneer of modern service
marketing research. His research interests also include service management and marketing,
relationship marketing, and marketing theory. He has been selected as a Legend in Marketing.
Corresponding author: Christian Grönroos, Department of Marketing, CERS Centre for
Relationship Marketing and Service Management, Hanken School of Economics, Finland.
E christian.gronroos@hanken.fi
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