Understanding the value of customer participation as a vehicle to generate repeated business is often emphasized in business assessment. Just basic business logic shows that it makes sense to listen to your customers (Merlo et.al., 2013). Take “listening” to the next level and you build a situation of co-creation. When adapting co-creation, there will be a change in the current distinct roles and a situation from trying to find customer needs and adjust the product to fit, to a new dynamic of joint customer and producer effort of creation. The aim of involving the customer in the process is to restructure the value chain and obtaining a differentiated position (Humphreys et.al., 2009). Some say that co-creation might become a requirement to stay viable in the future.
Taking the to your customers.ining importance (Merlo et.al.
The market for toys has a stable growing global value, that reached a total of $84 billion in 2012 (Yahoo Finance, 2013). This is a market of many supplying participants that offer interchangeable products. Therefore, one of the most common know players has taken on the pioneer position in differentiating innovation by the use of co-creation.
LEGO products have individual creation potential as value at its core. The classic LEGO building blocks already allow endless variations and functions. But already for some years now, LEGO has opened its doors and adopted external, fan-based creations in to their manufacturing process. They have had many successful projects such as LEGO Mindstorms and Design By Me and currently exploit LEDO Ideas, which is a 100% open platform. On this platform, customers can discover and share their insights on ideas of others or their own. Ideas can be submitted on the open platform and at that point require the support of 10.000 community members to get reviewed by the LEGO Review Board and be eligible to be produced as a real LEGO set. When your creation is taken into production you will obtain the credits and royalties of the amount of 1% of total net sales.
This open platform has created value for many stakeholders. First, any individual can become inspired by the ideas of others, as there is open access for everyone. Second, the designers at LEGO gained a valuable source for their research and development, gaining them better, faster and cheaper innovation opportunities (Simoes-Brown & White, 2014). It may be no coincidence that two of LEGOs highest selling products ever have been produced via co-creation. Additionally, LEGO has expanded its market by attracting different customers (creative individuals of the age 13 and above can submit ideas) than their target group (children) to have active involvement with the brand. Finally, the business model includes a financial opportunity that benefits the customers who create a valuable product. LEGO is one of the often mentioned success stories when explaining the importance of co-creation.
A development in the world of toys is the upcoming use of 3D printers which expands the possibilities enormously. At Hasbo, they stimulate fan-base adjustments to their products, which could again possibly earn the creator financial benefits from royalties but mainly guarantees the production of the co-created product. They mention that one of the main benefits for customers is that they now directly have access to an even larger product database, underlining their effort to differentiate. They engage in co-creation at a much smaller level, e.g. already allowing only simple adjustments to their figurines. Whether this co-creation effort of Hasbo can follow or surpass the success of LEGO and jumpstart the customer 3D revolution will remain a question for now.
– Humphreys, P., Roser, T., Samson, A., & Cruz-Valdivieso, E. (2009). Co-creation: New pathways to value. https://www.promisecorp.com
– Merlo, O., Eisingerich, A.B., & Auh, S. (2013). Why Customer Participation Matters. MIT Sloan Management Review.
– Simoes-Brown, D. & White, G. (2014). How Does Co-Creation Change the Approach People are Taking to Innovation?. http://blogs.icrc.org/gphi2/2014/12/19/co-creation/
– Yahoo Finance. (2013). https://uk.finance.yahoo.com/news/global-toy-market-000000679.html
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