A study measuring the effects of customer empowerment in co-creation

Gregory, Alex (2016) A study measuring the effects of customer empowerment in co-creation. [Dissertation (University of Nottingham only)]

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Abstract

This study aimed to examine to what extent different types of customer empowerment effects consumers attitudes towards products and how this influences their behavioural intentions towards the product. Behavioural intentions under investigation are purchase intentions, word of mouth, and willingness to pay. As a major source of competitive advantage, co-creation is becoming increasingly important for firms to implement into their strategic planning and product innovation, especially as a form of differentiation as product categories become more and more commoditized. Previous studies have focused mostly on co-creation from a service perspective, for instance its role in financial institutions, whereas studies on its role in product innovation is a relatively new and untouched field of study. This study not only focuses on the effects of customer empowerment in co-creation but also considers the influence of product complexity and how high and low complexity products may encourage consumers to evaluate differently.

This study is based on the results of 51 respondents who completed the online survey. Four product scenarios were used in this survey (Create empowerment/High complexity, Select empowerment/High complexity, Create empowerment/Low complexity, and Select empowerment/Low complexity) and questions were made to measure the effects on the variables, product attitudes, purchase intentions, likeliness of participating in word of mouth marketing, and willingness to pay a price premium. The main results of this study show: (1) Create empowerment to be a stronger construct for use in co-creation over select empowerment and consequently more beneficial to participating firms. (2) High product complexity is beneficial for products that are co-created within the realms of select empowerment, as low product complexity products co-created through select empowerment given to customers was the lowest performing product scenario. (3) All variables were strongly correlated with word of mouth, thus stressing the importance of other factors in the build-up of customer recommendations.

There are several managerial implications to be taken from the study’s findings: (1) to foster the highest level of benefits for both parties involved firms must empower customers to create as much as possible as this will lead to closer fit of customer needs. (2) Firms can measure the extent of the engagement paradox by measuring conversations posted on social media platforms. (3) Managers must also understand the beneficial differences between low and high complexity products by offering customers a greater level of empowerment in low complexity products, Create over Select empowerment. (4) Lastly, managers must adopt a strategic outlook on their co-creation activities as motivations for participation vary and may change depending on numerous factors of co-creation, but if managed effectively customers will benefit from increased satisfaction, whereas firms will enjoy both financial and non-financial benefits.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Gregory, Alex
Date Deposited: 13 Mar 2017 14:10
Last Modified: 21 Mar 2017 20:26
URI: http://eprints.nottingham.ac.uk/id/eprint/36637

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