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Creating Marketable Value through Value Co-Creation

Discuss about the Concept Of Value Co-Creation.

Value is comparatively an elusive concept which generally includes some form of benefit that is involved in the process of consumption. The concept of value co creation surrounds round the creation of value by consumers which can be further demarcated between sponsored co-creation and autonomous creation resulting in marketable value. Value creation can be mutually beneficiary to both the consumer and the producer. Co-creation has to be achieved by the activities that the users/consumers are engaging in the market domain implementing S-D logic where customers are seen as co-creators of value (Pongsakornrungsilp and Schroeder 2011). The harmonious collaboration between the producers and customers results in the creation of value. The concept of value co-creation has undergone a tremendous change in the present century with the introduction of globalization that has made the consumers available to a number of choices through their access to global view, access to internet and easy networking facilitating quick experimentation. The advancement in the technological sphere has however provided the companies more opportunities to reach out to their consumers. In the domain of value co-creation each of the sectors, like the companies as well as the consumers have a definite role to play since one is responsible for selling and another purchasing. Many market analysts have undermined the role of the consumers in order to sustain, since business process is a mutual activity which requires the harmonious participation of both the consumer and producer. The process of customer-producer relationship therefore plays a significant role in the field of making co-creation. For instance in case of an electronic company, they can turn to their customers in order to analyze in a coherent manner what direction should technology steer towards. Innovation in the products should be aligned with customer wants. In this case they can even turn to their customers for seeking out to their feedback and inventive ideas that he company can incorporate in the products. This not just strengthens the customer-brand bonding but brings forth a revolution in the product’s demand and reputation in the market (Galvagno and Dalli 2014). Maintaining a close relationship with the customers is an important aspect of value co-creation, the mutual firm-customer relationship. In the process of value co-creation, the company should strive to incorporate the resources that would satisfy the consumers and therefore the need to implement strategies that would make explicit the company’s willingness to interact.

The Role of Consumers and Producers in Value Co-Creation

On a deeper analysis of value co-creation process, one can assess the three vital elements that are associated with the positive outcome of value co-creation, customers sphere, suppliers sphere and joint sphere. The companies should utilize resources in the most optimum way possible to develop a better communication model that would help them to influence the consumers’ choices. Researchers have further elaborated on the need to accelerate the creative abilities on the part of the companies that would prompt the willingness of the consumers to participate.  With the advent of globalization and high upgradation of technology, the level of creativity and aesthetics has stretched far and therefore it has provided the companies with a new challenge to meet up to the stiff competition. Internet can provide the companies with an interface that would manipulate consumers’ choices and decision-making process (Jaakkola and Alexander 2014). Therefore for the purpose of value co-creation and improve communication, the companies are increasingly making use of the intent and posting content that would generate users’ interest that could help JB Hi-fi to customize the product.

As evident, consumer experience plays a vital role in creating real value, the online interface can also be used to explore about consuming experience. JB Hi-Fi in this regard can make use of appropriation which denotes a system that transforms consumer involvement with the product. Furthermore since consumers generate a company’s marketing strategies, the company should also make an effort to find out the consumer resistance which can result in a consumer avoiding a particular product owing to a number of reasons like lifestyle choices or money and is therefore a fundamental aspect of consumption. Companies like JB Hi-I can know more about the customers that can predict and influence consumers’ choices especially in a market where there are thousands of product varieties to choose from. In the consumption production phase the consumers need to utilize the goods so that the market can increase its production rate (Mete and Davies 2017). In a nutshell the company has to give birth to the desire amongst the consumers which would make the consumption process easier. JB Hi-Fi has been successful in realizing the changing role of the customers in the marketplace and more precisely in the complex equation between the customer-organization framework. Personalization of products ensures a collaborative benefit for the consumer as well as the producer since it facilitates customers’ access to the product with greater speed and precision. With the help of value co-creation the customer can therefore gain a competitive advantage in the market if they are implementing tools that would provide them with a more experience based view of the consumers’. JB Hi-Fi will gain a better market penetration if they are being able to recreate a better and unique experience amongst the consumers with the products.

The Importance of Collaboration between Producers and Consumers


The customers need to create wanted value out of a product without which the product will fall out of relevance or usage in the market.  It is therefore why in value co-creation process the customers need to be active in order to create value in the marketplace. The final product or value outcome is the amalgamated result of customers’ preferences, thinking perception, wants and imagination. Even in a customer-customer intermingling and exchange of information, it is one specific form of value co-creation and in responsible for generating value beyond the capabilities of a firm. It is significant because in this case a consumer’s value co-creation is re-shaped by their interaction with other customers and their experience and knowledge of the consumption process. This information ultimately acts in favor of the consumer since the firm/company generate better ways to increase consumer well-being and the customer becomes “better off” in the entire production process.  It would also help managers to establish co-creation platforms.

For the purpose of value co-creation successful companies like JB Hi-Fi, Philips have decided to turn away from product or firm-oriented view to a more strategic environment where they can foster products personalized with customers’ preferences and needs. This transition is a noteworthy area to focus on as with the emergence of a digitalized era which has put the spotlight on the consumer-firm relationship as an essential aspect of value co-creation process. If one has to consider about value co-creation it needs to challenge the old and tattered order to the market, the exchange between consumer-firm and placing customer preference at the heart of the value co-creation process. In this respect JB Hi-Fi has always considered the advantage of staying in the front line of consumer trends. If a company is able to adjust itself to the shifting trends of the market pattern because of which the consumers are being placed inside the peripheries of the firm quite in contrary to the traditional means of marketing


Moreover in the process of value co-creation, the firms should also devise a strategy through which they would be able to support in a ceaseless manner, customers’ practices, the practices including a set of behavior and attitude that the consumer has developed towards the product (Cova and Dalli 2009). In the creation of value creation the organization should ensure that the consumers have sufficient access to information that would enlarge the community of consumers, developing brand loyalty which will give the firm tremendous market advantage.

Personalization of Products and Consumer Experience Interface

There are number of ideologies to take in consideration while discussing about the value co-creation process, for instance the deliberate exploitation of the consumers for the benefit of the company. This is primarily because the consumers are never paid for the statistics and data they are providing in the manufacturing process with their opinions, preferences and enthusiasm and secondly it is the consumers who have to pay the stipulated price as designated by the company in exchange of  the products. Therefore critics have developed the theory of consumers being the unpaid workers in the value co-creation process (Pongsakornrungsilp and Schroeder 2011). It is true that consumers influence the value co creation process by hinting at the manufactures what to produce according to the demands of their social life, but on the other hand the manufacturers do not appreciate the consumers’ skills in interpreting the consumption objects as well as the utility of the brand or services they are availing.

Conclusion

It can be therefore deduced from the above stated discussion that an informed, well-connected and active consumers can result in a better participation in the value co-creation process. As the market is a platform from where the consumer-company interaction takes place and it is where the firms will have to persuade the consumers so that it can extract as much as value as possible. Some of the easiest ways therefore to enhance value co-creation are personalization of products, choosing a finer interface for consumer-producer interaction and giving place to a sturdy consumer experience interface.

JB Hi-Fi understands the need for innovation and creativity for the purpose of creating value co-creation and it is therefore that JB Hi-Fi has produced the best pricing strategy for its products that would place it in a competitive position in respect to other online CD or DVD selling sites like Amazon (Nazari, Ghasemi and Saeidi 2015). They have valued customers as socially responsible actors for providing the HB Hi-Fi with active dialogue leading to product innovation and differentiation. This resulted in JB Hi-Fi producing 42.3% sales in a span of 12 months incurring a profit of $5.63 billion (Jaakkola and Alexander 2014). Owing to the massive innovation that they have adapted, market analysts have predicted that the profit rate will shoot up to $6.8 billion in 2018. It can be therefore stated that JB’s value co-creation strategies (Nazari, Ghasemi and Saeidi 2015).

Innovation has led the customers to opt for their shop since it provides the consumers with an unique experience of buying products. The constant demand for JB Hi-Fi’s products has resulted in the upcoming of five more retail stores of JB which gave the brand an unique and strong market presence (Grönroos and Voima 2013). The JB Hi-Fi HOME stores have gained JB with improved management of supplier and customer involvement. The proliferation in the number of JB stores has also enabled the customers to perceive a higher value of JB.

Enhanced Communication for Successful Value Co-Creation

In this way with opening up of more JB stores, the people have enabled a more customer engaging and sharing which has aided JB in understanding future consumption phases.  JB has created a strong value co-creation by bridging the gap between customer relationship practices with product lifestyle strategies that would involve customer opinion and feedback for the persistent improvement of the product (Grönroos and Voima 2013). JB has never needed to reflect for long before obtaining ideas from customers and implementing them into designing the layout and product alignment that would enhance customer engagement and their desire to buy products from JH Hi-Fi. The aesthetic feeling that has been associated with the entire ambience of buying products at JB Hi-Fi. JB has also kept in mind the different segments of customers like gamers, music lover and social butterflies and aligned innovation is the precise way that would guarantee mass participation and keep JB profit rate consistently stable over the years.

Marketing the brand in an unique technique can improve the brand name by engaging more customers into buying the product. However, in the new era of technology where the basic pattern of accessing music or cinema has underwent radical transformation, JB Hi-Fi should focus on the key elements that would propel the consumers into buying the products via them. in this case, JB Hi-Fi can utilize the stardom involved with the music as a TRP factor for selling the albums in a better way (Nazari, Ghasemi and Saeidi 2015). This would fetch the fancy of the consumers who will develop more interest into the products and engage their friends and acquaintances into them. Marketing can thrive co-creation process by engaging the customers in an interactive experience which further paves the way for improved customer loyalty and experience. Innovation in this sector also hints at highlighting the product innovation, JB Hi-Fi can introduce technological innovation, or innovation in the product appearance that would denote a more aesthetic and ethical relationship between the records and the musicians. This would induce the consumers to buy products from JB Hi-Fi instead of purchasing them from any other platform.

Customer interface can be developed by JB Hi-Fi to know in-depth about the consumers’ pattern of music consumption, their level of engagement with audios or cinema and what they do in order to satisfy their distinctive preference for music. In this way JB Hi-Fi will be able to devise more innovative ways for the products. They can also generate more customized tools for each genre of the music like mainstream or classical that will give the listeners some ideas about the musicians’ own reflection, idea and inspiration behind the composition of music. In this respect, JB Hi-Fi can give a place for virtual communities that would enhance the emergence of inventive forms of consumer communication, in an on-going dialogue with the other customers regarding the various products JB Hi-Fi sales. This can benefit JB Hi-Fi in a two-fold manner by allowing customers to share their individual experiences and post about JB Hi-Fi and hare feedback. JB Hi-Fi can utilize this information and infuse them into their products (Pongsakornrungsilp and Schroeder 2011). Customers will experience a rather exalted feeling on witnessing their priority in the design of products. Furthermore the platform that JB will be responsible to create should be sufficient to allow for a free flow of customer-customer information and associating and dissociating, engaging and sharing, intensifying and exchanging.

The above stated are some of the ways by which well-reputed companies like JB Hi-Fi. Unless and until the companies are letting the consumers play beneficiary roles in giving the brands an unique shape of who they are what they represent. HB can also assure strong market presence by infusing strong bond in between the brand and consumer community and ensuring the continuance of the brand culture that JB Hi-Fi stands for.

References:

Bryson, J., Sancino, A., Benington, J. and Sørensen, E., 2017. Towards a multi-actor theory of public value co-creation. Public Management Review, 19(5), pp.640-654.

Cova, B. and Dalli, D., 2009. Working consumers: the next step in marketing theory?. Marketing theory, 9(3), pp.315-339.

Galvagno, M. and Dalli, D., 2014. Theory of value co-creation: a systematic literature review. Managing Service Quality, 24(6), pp.643-683.

Grönroos, C. and Voima, P., 2013. Critical service logic: making sense of value creation and co-creation. Journal of the academy of marketing science, 41(2), pp.133-150.

Jaakkola, E. and Alexander, M., 2014. The role of customer engagement behavior in value co-creation: a service system perspective. Journal of Service Research, 17(3), pp.247-261.

Mete, M. and Davies, G., 2017, October. A Comparative Study on Brand Image Measurements. In Global Conference on Services Management (GLOSERV 2017) (p. 330).

Nazari, E., Ghasemi, B. and Saeidi, S.S., 2015. Explain the relationship between green brand image, green satisfaction and green trust and factors affecting on green brand equity. Bulletin of The Georgian National Academy of Sciences, 9(1).

Pongsakornrungsilp, S. and Schroeder, J.E., 2011. Understanding value co-creation in a co-consuming brand community. Marketing Theory, 11(3), pp.303-324.

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