In the old times, consumer decision making was simple. Consumers had access to limited (but easily handled) information and only a few channels to look for products. The competition was less intense and consumers could have strong preferences among the clearly distinguished alternatives. However, times have changed and the digitization as well as the need for individualization in modern economies have made the situation a bit more complex. The following video (from the advertising company Scholz & Friends) offers a nice illustration of the evolution of marketing throughout the last decades.
The costs of computing power and telecommunications have been dramatically reduced and, in this information intensive economy, products and services have been extensively digitized. In addition, consumers are becoming more and more knowledgeable and demanding and contact firms in many different situations. These consumers require the formation of tailored value creation systems to better match their needs. The emerging challenge for firms is how to best support and activate consumers and also learn about their product needs? Increasingly firms and consumers work closely together in the value creation process. Firms such as Dell and Nike allow their customers to tailor products to their own taste. Other firms like Amazon and Facebook rely heavily on consumer input to create value for other consumers. To be successful, these new business models often use non-conventional marketing channels, and strongly rely on new information technology such as the Internet and mobile technology to interact with consumers.
Consumer Value Creation 