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Value co-creation and Industry 4.0

A comparative cross-case study of luxury vs. fast fashion brands

Written by D. Lopusneac

Paper category

Master Thesis

Subject

Business Administration>Management

Year

2020

Abstract

Master Thesis: Value Co-creation 3.1 Origin The traditional marketing model, also known as the producer-consumer model, or commodity-led logic (Payne et al., 2008) is interpreted as an old-fashioned business activity centered on company production, providing consumers with And push goods and services for consumption only (Occhiocupo & Friess, 2013). However, with the emergence of the Internet and social media channels, a new marketing logic has been born and is adopted by more and more companies, including fashion brands. According to this service-dominant model, abbreviated as the SD model in the research literature, there is a centralized idea that products and services provided by the company are the common points of exchange between these two parties (Payne et al., 2008)). In other words, companies no longer simply produce goods and ship them to the market, but establish a dialogue with their environment and their customers to provide a different, enhanced and special shopping experience (Occhiocupo & Friess, 2013; Fernandes & Remelhe, 2015). Payne et al. (2008) believes that co-created customers are not only positive, but also permanent value creators, both for themselves and for the company they interact with. In addition, value creation can either be created with the help of intentionally used technology and strategic tools, or it can be organically and continuously generated from the customer experience (Gronroos, 2012). Therefore, with this change of perspective and the development of new paradigms, value co-creation can not only create new competitive advantages, but also treat customers as active participants in value creation (ibid.). This brings a lot of new business opportunities and long-term brand growth (Payne et al., 2008). 3.2 Co-creating customers. A new wave of marketing research focuses on “empowered” consumers. They require brands to provide not only products, but cooperation, and most importantly, to provide an intimate and unique experience through inclusion (Payne et al., 2009) ; France et al., 2015; Millspaugh, 2016. Hoyer et al. (2010) identified four different types of customer co-creation motivation: financial, social, technical, and psychological. On the one hand, financial motivation is only a process of co-creation Monetary rewards during or after completion are triggered, while technical motivation revolves around the expected information and skills obtained through co-creation. On the other hand, social motivation is triggered by the desire to improve personal reputation, social respect, and build relationships with other community members. The psychological motivation is difficult to determine, and it is related to the intrinsic value of the form. Pride. 3.3 Types of value co-creation Because value is a term, its definition is still controversial. Because its nature is diverse, value co-creation is also diverse in its original form. Since the study of value definition believes that value can have different types and properties, and customers can create different types of value at the same time, whether it is tangible, intangible, or a mixture of the two, there are several terms that are directly related to value. This process, such as "co-imagining", "co-innovation" (in Romero & Molin (2011);), "co-design", "co-manufacturing" and "social manufacturing" (in Hirscher, Niinimaki & Armstrong (2017); Nachtigall et al. (2019)). Since the project focuses on the value co-creation process and its types, this section will provide a literature review on the main types of value. Co-creating activities. 3.3.1 The two types of value of common idea and co-innovation are considered together because they have one thing in common: both involve the process of generating an idea, and the type of co-created value is the form of a new idea, whether it is related to a certain Is it related to a product or a business model? A brand. With the help of co-conception and co-innovation, brands can provide their customers with a co-creation platform, where the ideas generated can lead to the reorganization and innovation of the company's business model. Therefore, by working together to create a unique value proposition, allowing customers to enhance each other's capabilities by sharing the same risks, resources, responsibilities and returns, the company will double its ability to innovate. The constant exchange of information between the company and its co-creation consumer community is the driving force of the brand's continuous innovation in order to provide the correct co-creation mechanism (Romero & Molina, 2011). Regarding the necessity of business model restructuring, Thomke & v. Hippel (2002) believes that the difficulty of realizing an effective co-creation process is that it is difficult to know what consumers want and what they like. Therefore, through Thomke & v.Hippel, co-innovation can be realized through the realization of two main steps. First of all, companies can not use resources to simply understand consumers, but can turn to customer innovation, that is, internal innovation processes are not retained, but part of it is transferred to customers. Secondly, once the first step is completed, all necessary user-friendly tools need to be provided to the co-creating customers. This will make the innovation process easy and enjoyable. Otherwise, customers will not cooperate with the company, but will go to competitors. If the co-creation platform is set up correctly, then the brand department that is co-creating can become more efficient and cheaper. Read Less