Co-producing with consumers: how varying levels of control and co-production impact affect

Stevens, Jennifer; Esmark, Carol L.; Noble, Stephanie; Lee, Na Young

doi:10.1007/s11002-016-9413-2

Cited by 13 publications

(5 citation statements)

References 22 publications

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“…More manufacturers are utilizing co-production strategies to induce consumers and improve profitability (Stevens et al , 2017; Xie et al , 2008). The academic literature in marketing or operation management also emphasizes the importance of co-production for consumers and firms, and several empirical studies have examined the phenomenon of increasing consumer valuation in the co-production process (Mochon et al , 2012; Norton et al , 2012).…”

Section: Discussionmentioning

confidence: 99%

Co-production strategy, retail competition, and market segmentation

Wang

Fan

2019

APJML

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Purpose The purpose of this paper is to examine the effect of manufacturers’ co-production strategy on market segmentation and channel performance under retail competition. Design/methodology/approach It differs from previous empirical studies by primarily focusing on the increment in consumer value accompanying co-production. The authors establish a game-theoretical model to analyze the impact of co-production on market segmentation and the profitability of channel members in a competitive retail environment. Findings The results reveal that manufacturers introducing co-production expand market coverage and benefit all channel members, when the intensity of competition is sufficiently high, especially for retailers with low-quality levels, who are out of the market without co-production. Furthermore, with the increase in customer valuation through co-production, employing a co-production strategy is always a dominant strategy for manufacturers. Research limitations/implications First, although the authors assume a monopoly manufacturer and two duopoly retailers, adding competition between manufacturers should enrich the model. Multiple products with vertical or horizontal differentiation could also be introduced into the model. Second, the authors use the multiplicative utility function to model the value co-creation effect on consumers; however, different utility functions may yield significantly different results and implications. Third, the authors model a one-shot game in a single product selling period; future studies may employ multi-period games to obtain further insight into co-production strategy. Finally, the model assumes that all consumers are homogenous in the extent of value creation and hassle cost. Future research may find it interesting to consider heterogeneity in these characteristics. Practical implications The business world today already sees the power of leadership in a supply chain to have shifted from manufacturers to retail giants such as Walmart, Home Depot and Best Buy. The findings also propose a new route to counteract the emergence and rise of dominant retailers. On the other hand, with the application of new technology in the retail industry such as 3D avatar, AR/VR, Internet of Things, consumers are more likely to participate in various forms of co-production activities, how to execute the co-production strategy has become more and more important for managers. Social implications The conclusion of this study points out the way to achieve a win–win outcome under which both channel members including manufacturer and retailers and consumers can be better off, that is, the channel can reach Pareto improvement, so the social welfare is increased accordingly. Originality/value The authors propose an analytical framework to examine the effects of co-production and competition on market segmentation and profitability, and prove that co-production is a powerful marketing tool that can attract consumers and increase profitability, which manufacturers can incorporate into their products even in a competitive environment.

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Section: Discussionmentioning

confidence: 99%

Co-production strategy, retail competition, and market segmentation

Wang

Fan

2019

APJML

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“…Control. Whereas co-production is believed to increase lay actors' perceived control (Stevens et al, 2017), few scholars have examined how organizations design their co-production operations for types and levels of user control, a factor that could substantively influence lay actors' affective responses, experience, and the service operation's success (Esmark et al, 2016). Moreover, greater user control means greater organizational uncertainty, which provider organizations may try to minimize by excluding particular groups of users (Fledderus et al, 2015).…”

Section: Motivation Processesmentioning

confidence: 99%

“…The potential psychological response of lay actors to participation and the self-serving bias effect (Bendapudi and Leone, 2003) have to be taken into consideration when designing the co-production process. Specifically, an increase in the users' perceived control can mitigate the bias and increase satisfaction (Stevens et al, 2017, Pacheco et al, 2017. The level of perceived co-production intensity (i.e., nonmonetary customer input, such as perceived effort and time invested) can negatively affect customer satisfaction with the co-production process (Wu, 2011).…”

Section: Satisfactionmentioning

confidence: 99%

“…Bovaird 2007; Bovaird and Loeffler, 2012;Kershaw et al, 2018;Ryan, 2012;Sicilia et al, 2016;Tuurnas 2016Tuurnas , 2015Verschuere et al, 2012;Williams et al, 2016. (2016), Etgar (2008), Fledderus et al, 2015, Flores andVasquez-Parraga (2015), Haumann et al (2015), Mende et al (2017), Pacheco et al (2017), Stevens et al (2017), Stokburger-Sauer et al (2016, Wu (2011), Wu (2011. Zolfagharian et al (2018).…”

Section: Management Of Professionals Traning and Motivationmentioning

confidence: 99%

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A comprehensive framework for the activation, management, and evaluation of Co-production in the public sector

Cepiku

Marsilio²,

Sicilia³

et al. 2022

Journal of Cleaner Production

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“…Although prior works have focused on co-production in utilitarian terms, some scholars have found that co-production can yield psychological benefits. For example, Stevens et al (2017) found co-production can enhance consumer control, which sometimes leads to an increased effect. Additionally, in the realm of engagement, some scholars found that individual difference variables (i.e.…”

Section: Literature Reviewmentioning

confidence: 99%

Co-production or DIY: an analytical model of consumer choice and social preferences

Dargahi

Namin

Ketron

2020

JPBM

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Purpose The purpose of this paper is to demonstrate how consumers choose among three different options offered by a firm in a monopolistic setting, namely, to buy a standard product with a non-customizable design, to ask the firm to customize a product using the consumer’s ideal design or to do the entire design task by themselves. The authors also investigate how social preference intensity and the possibility of reselling a product influence a consumer’s decision. Design/methodology/approach The authors develop an analytical (game theoretical) consumer choice framework and incorporate a psychological factor into the model. The authors also empirically validate the analytical findings using simulations. Findings The authors find that as social preference intensity increases, the number of co-producers can either decrease or increase. The authors offer a closed-form solution and interval graphs showing that when the setup price is large (small), the proportion of the market that chooses to do-it-yourself (DIY) is large (small) and an increase in social preference intensity leads to a decrease (increase) in co-production. Originality/value This is the first paper to incorporate a social factor into an economic model in a consumer behavior setting. It is also the first paper to explain how customers’ preferences among possible options, such as DIY (without the firm’s help), co-production (with the firm’s help) and a standard product might change while considering other people’s preferences, as well as given associated costs.

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Co-producing with consumers: how varying levels of control and co-production impact affect

Cited by 13 publications

References 22 publications

Co-production strategy, retail competition, and market segmentation

Co-production strategy, retail competition, and market segmentation

A comprehensive framework for the activation, management, and evaluation of Co-production in the public sector

Co-production or DIY: an analytical model of consumer choice and social preferences

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