Term
| Traditional Firm-Consumer Interaction Diagram |
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Definition
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Term
| Traditional Firm-Customer Interaction beliefs |
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Definition
| - Consequently, firms conceptualize customer- relationship management as targeting and managing the “right” customers. |
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Term
| New Firm-Customer Interaction beliefs |
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Definition
- Informed, connected, empowered, and active consumers are increasingly learning that they too can extract value at the traditional point of exchange.
- Consumers are now subjecting the industry’s value creation process to scrutiny, analysis, and evaluation
- Consumers can choose the firms they want to have a relationship with based on their own views of how value should be created for them. |
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Term
| Co-Cretion Experiences meaning |
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Definition
| High-quality interactions that enable an individual customer to co-create unique experiences with the company are the key to unlocking new sources of competitive advantage. |
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Term
| Points of What Co-Creation is Not |
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Definition
- Customer focus or customer is always right
- Delivering good customer service or pampering the customer with lavish customer service
Mass customisation of offerings that suit the industry's supply chain
- Transfer of activities from the firm to the customer as in self-service e.g., gas pumps, ATMs, supermarket checkout
- Customer as product manager or co-designing products and services
- Product variety
- Segment of one
- Demand-side innovation for new products and services
THE FIRM IS STILL IN CHARGE OF THE OVERALL ORCHESTRATION OF THE EXPERIENCE |
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Term
| Points of What Co-Creation is |
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Definition
The traditional view of the hospital and its product—medical treatment—has not disappeared. Rather, what has emerged as the basis for unique value to consumers is their experience (which is contextual).
- Is about JOINT creation of value by the company and the customer. It is not the firm trying to please the customer
- Allowing the customer to co-construct the service experience to suit her context
- Creating an experience environment in which consumers can have active dialogue and co-construct personalised experiences; product may be the same but customers can construct difference experiences
- Experiencing the business as consumers do in real time
- Continuous dialogue |
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Term
| What does DART stand for and what is it? |
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Definition
Dialog, Access, Risk-benefits, and Transparency.
They are the building blocks of interactions between the firm and consumers that facilitate co-creation experiences. |
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Term
| Points about Dialog element of co-creation |
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Definition
- Implies interactivity, deep engagement, and the ability and willing ness to act on both sides.
- For an active dialog and the development of a shared solution, the firm and the consumer must become equal and joint problem solvers.
- Dialog must center around issues of interest to both—the consumer and the firm and must have clearly defined rules of engagement. |
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Term
| Points about Access and Transparency of co-creation |
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Definition
- Dialog is difficult if consumers do not have the same access and transparency to information.
- Firms have traditionally benefited from exploiting the information asymmetry between them and the individual consumer
Because of ubiquitous connectivity, it is possible for an individual consumer to get access to as much information as she needs from the community of other consumers as well as from the firm |
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Term
| Ponts about Risk-Benefit element of co-ceation |
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Definition
- More importantly, dialog, access, and transparency can lead to a clear assessment by the consumer of the risk-benefits of a course of action and decision.
- Instead of just depending on the doctor—the expert—the patient has the tools and the support structure to help make that decision with a medical condition, a lifestyle, or social obligations. |
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Term
| Co-Creation Firm-Customer Interaction Diagram |
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Definition
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Term
| Transformation of the relationship between firms and consumers |
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Definition
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Term
| Given that customers cannot predict their experiences, co-creation of value may well imply the death of traditional forecasting. Instead, the focus is shifting to: |
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Definition
| - Capacity planning, the ability of the experience network to scale up and down rapidly, and for the system to reconfigure resources in real time to accommodate shifting consumer desires and personalization of co-creation experiences. |
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Term
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Definition
- The firm and the consumer are separate, with distinct predetermined
- Supply and demand are matched; price is the clearing mechanism
- Demand is forecast for product for products and services that the firm can supply
- Value is created by the firm in its value chain. Products and services are exchanged with consumers
- Firm disseminates information to consumers
- Firm chooses which consumer segment to serve, and the distribution channels to use for its offerings
- Firms extract consumer surplus. Consumers are 'prey'. Firms want a 360-degree view of the customer. Firms want to 'own' the customer relationship and lifetime value
- Companies determine, define and sustain the brand |
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Term
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Definition
- The firm and the consumer converge; the relative "roles of the moment" cannot be predicted
- Demand and supply are emergent and conextual. Supply is associated with facilitating a unique consumer experience on demand
- Value is co-created at multiple points of interaction. Basis of value is co-creation experience
- Consumers can initiate a dialogue among themselves
- Consumer chooses the nodal firm and the experience environment to interact with and co-create value
- Consumer's can extract the firm's surplus
- Consumers expect a 360-degree view of the experience that is transparent in the consumer's language
- The experience IS the brand, and the brand is co-created and evolves with experiences |
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Term
| What do managers need to invest in to complete the method of co-creation |
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Definition
| managers need to invest in building new infrastructure capabilities, as well as new functional and governance capabilities—capabilities that are centered on co-creation through high-quality customer-company interactions and personalized co-creation experience |
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