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Transforming products into experiences through Co-Creation: An experimental study using blended methodology

Ayyagari, M. and Parahoo, S. (2009) Transforming products into experiences through Co-Creation: An experimental study using blended methodology. In: 9th International Research Symposium in Service Management (IRSSM-9), 23 - 27 July 2018, University of Ljubljana. Faculty of Economics. Slovenia

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Abstract

Creating delightful customer experiences has become critical to customer retention and business success. For example, the difference in the compound annual revenue growth rates between companies that lead on customer experience and those that are laggards was 14% over a five year period (Manning, 2016). Ensuring effective customer experience has become an imperative to achieve differentiation in a competitive market. This requires organizations to develop strategies to transform their product/service bundle to deliver enjoyable customer experiences. The lens needed for such transformation has been discussed in the literature pertaining to the transition from goods-dominant logic to service-dominant logic (SDL). The former views the manufacturer or service provider as the creator and deliverer of value. SDL evolved to address this restrictive view of services, that was rooted in the traditional manufacturing-services dichotomy (Lusch and Nambisan, 2015; Ordanini and Parasuraman, 2011). SDL views tangible products as merely a means to satisfy the needs of customers, while firms offer pleasant customer experiences co-created with other actors to differentiate themselves from competitors (Ordanini and Parasuraman, 2011; Prahalad and Ramaswamy, 2004). SDL thus considers service as the application of “specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself ” (Vargo and Lusch, 2004, p. 2), and further proposes that the value of a product is “value in use” as defined by customers, as opposed to embedded “exchange value” proposed by sellers, thereby involving value co-creation (Li, & Petrick, 2008). Hence, value is co-created by multiple actors with the customer playing a pivotal role. In the context of customer experiences - which are described as “inherently personal responses occurring only in the mind of an individual who has been engaged on an emotional, physical, intellectual or even spiritual level (Berry and Carbone 2007) - customers cannot be passive recipients of value. The experiences are created within and around them. Especially in the digital age, customers have access to diverse knowledge sources which they actively seek. They are not content to respond or merely tell the service provider what they want. They are eager to ‘show’ what they want by giving shape to their ideas and co creating their own personalized experiences (Prahalad and Ramaswamy, 2004). The present paper posits that these “knowledge consumers” can play a significant role in creating service experiences. Companies may thus benefit from the collective knowledge of their consumers to transform everyday products into engaging and memorable experiences for the customers through co creation (La Salle and Britton, 2003).

Item Type: Conference Paper
Murdoch Affiliation: School of Management and Governance
Conference Website: http://konference.ef.uni-lj.si/irssm9/
URI: http://researchrepository.murdoch.edu.au/id/eprint/57304
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