Four types of customer co-creation

O’Hern and Rindfleisch (2009) define four types of co-creation in their paper “Customer co-creation: A typology and research agenda”. These four types are derived from literature analysis and are dominated by the fact that co-creation activities vary regarding the degree the customers that are autonomously involved in the NPD process.

Furthermore, the four types of co-creation build upon the theoretical approach that customers can be empowered and involved either in the contribution of new ideas, in the selection of new ideas or in both. Notably, contribution activities can be either fixed or

open, and selection activities can be customer-led or firm-led (see figure 5). (O’Hern et al.

2009, p. 89)

Figure 5: Four types of co-creation

Source: own illustration based on O’Hern et al. 2009, p. 90

3.2.3.1 Collaborating

Collaborating is the one form of co-creation that has the highest degree of customers’

involvement. It allows the customers to develop new products and integrate ideas into already existing products. O’Hern et al. (2009) suggest that the concept of collaborating is most applicable to complex applications with high information content. Referring to this, the authors very well exemplify collaborating on the basis of open source software (e.g.

Apache, Firefox, Linux) but also consider the field of biotechnology, pharmaceutical products and medical devices to be relevant. Notably, collaborators are characterized by intrinsic motivation and the fact that they profoundly enjoy co-creating products. Their contribution is strongly driven by the conviction that the ideas developed are important and will add value to the product. Overall, collaborating gives consumers significant freedom to contribute their individual ideas, in a self dependent manner and externally from the firm, in order to alter products according to their personal value and needs. The most important advantages for companies can be seen in reduced development costs as well as a process of continuous product improvement. The protection of intellectual property and the attraction of a critical mass of people collaborating can be challenging.

(O’Hern et al. 2009, p. 91ff)

Customer-Led Firm-Led

Fixed Open Fixed Open

Co-designing Collaborating Submitting Tinkering

SELECTION ACTIVITY

CONTRIBUTION ACTIVITY

TYPE OF CUSTOMER CO-CREATION

3.2.3.2 Tinkering

Tinkering refers to the customers’ modification of already existing products. Even though tinkering has a similarly high degree of latitude for the customers as collaborating, the firm withholds a higher level of control when it comes to choosing customers’

contribution. However, the contribution activity is open in both types – Tinkering and Collaborating. According to O’Hern et al. (2009) tinkering occurs most in the computer game industry, where it makes up for a substantial share in the product development process. (O’Hern et al. 2009, p. 93ff) Prahalad et al. (2004) even affirm that computer games heavily depend on consumers’ active co-creation. (Prahalad et al. 2004, p. 10) Due to the limited access to products information, tinkerers are restricted in the range of modifications and also the selection activity is firm-led. Furthermore, tinkering represents a tool for product differentiation and clearly increases customer satisfaction by giving the users the possibility to modify according to their needs. Nevertheless, a drawback to this concept is that expert knowledge for both the product and the underlying technology are prerequisite to modifications. (O’Hern et al. 2009, p. 93ff)

3.2.3.3 Co-designing

The co-designing process consists of two groups of customers. On the one hand, customers who contribute a new design to the firm (representing a smaller group with higher design skills), and on the other hand, customers who choose which design the company should undertake (representing a larger group with lower design skills). Even though co-designing applies to various product categories (among others domestic products, sport equipment) O’Hern et al. (2009) emphasize the example Threadless.

Customers can design new products online, publish them on the website, where the most appealing designs are then evaluated and rated by the community. The community’s selection serves as a decisive basis for the products the company will offer. Usually co-designing firms limit the customers’ design contribution to a fixed framework (format, tools etc.) that set the conditions clear. Yet, the customers enjoy absolute freedom in the selection process. The most significant advantage co-designing has for companies is the fact that the product development costs are noticeably decreased since the design process of new products is outsourced to customers. Also, due to the strong position of

customers in the product development process the risk of product failure is tremendously reduced. However, co-designing companies run the risk of having the business model imitated and as a consequence fierce competition of new entrants. (O’Hern et al. 2009, p. 95f)

3.2.3.4 Submitting

Submitting is the concept of directly proposing new product ideas to companies. Hereby the sole submission of an idea is not sufficient. Rather customers must present an idea in a well-translated concept including illustrative examples and prototypes. These conceptual ideas build the basis for companies regarding the decisions which ideas should be followed (further developing, testing and in best case launching). One of the most popular firms working with submitting is among others P&G, with their program called

“connect & develop”¹. In comparison to contributing, tinkering and co-designing, submitting has the lowest level of customer freedom in both the contribution and the selection (selection activity is firm-led, contribution-activity is fixed). In spite of the similarity to co-designing, submitting differs severely in the selection process that is exclusively conducted and controlled by the firm. Most notably, customers are given a vital role in the NPD process by being able to share their knowledge and creative novel ideas in a direct way with companies. Yet, it often occurs that the company retains the legal title to the product development idea, not the submitter. One of the biggest advantages the concept of submitting has for companies is the fact that the product development cycle is dramatically reduced. Moreover, new products are enriched by end-users novel ideas and individual needs. However, a downside can be seen in the loose relation between customers and companies, which results in reduced intrinsic motivation. (O’Hern et al. 2009, p. 96f)

Additionally, O’Hern et al. (2009) present a more global definition, which provides evidence for the prevailing communication network (i.e. e-mail, social networks, websites, blogs, etc.) that encourages consumers to take an active role in the new product development process. Hence, from this perspective, co-creation can be seen as

1 http://www.pgconnectdevelop.com, as of February 16^th, 2015

“a collaborative NPD activity in which customers actively contribute and/or select the content of a new product offering”. (O’Hern et al. 2009, p. 86, Hoyer et al. 2010, p. 283)