Engaging Consumers in Co-production
A deeper understanding of how consumers decide whether or not to engage in co-production, and the corresponding decision processes is imperative. – Michael Etgar, A Descriptive Model of the Consumer Co-production Process
As co-production becomes an important engagement for many consumer-supplier situations, the issue of how to encourage consumers to engage in co-production becomes an important question. Marketers need to recognize that co-production is not an automatic consumer situation, but rather a conscious decision by consumers to engage in such activities.
What is Co-production?
Co-production refers to the involvement of consumers in the various value creating activities through which products and services are made. These activities include the production and distribution processes which are usually performed in the course of manufacturing a product or creating a service for a given target group of consumers.
The trend towards greater consumer involvement has been activated by the substantial changes in technology, consumer sophistication, and regulatory environments. In particular, the development of digital technologies which allow consumers to have instant access to stored information and to create and disseminate text, pictures and voice messages at minimal cost, has contributed significantly to this trend.
Co-production reflects a conscious strategic decision by consumers to become involved in production-like activities. For each co-production situation, one can also find consumers who do not engage in any co-productive activity. In order to understand how to engage consumers in co-production activities, we must understand the mechanisms which lead them to participate. Similarly to their motivation for other consumption related decisions, consumers decide to engage in co-production to satisfy their diverse economic, psychological and social needs.
A major drive to engage in co-production is economic. Through co-production, consumers relieve manufacturers and retailers from performing various activities along the value creation chain which allows the latter to lower their production costs. These costs savings are then translated to price reductions to consumers.
While co-production lowers costs for manufacturers and retailers, it imposes costs upon the co-producing consumers. These reflect the fact that such cost reduction is achieved by transferring to the co-producing consumers various value-creating activities required to manufacture a given product or service. To perform these activities, consumers need to use various resources and the costs of their use must be considered by consumers before they decide whether co-production is worthwhile.
Satisfaction of Psychological Needs
The co-production decision is not purely economic. A major motivation is psychological, covering a host of diverse drives and motivations. A major motivation is the desire to be involved in meaningful activities.
Co-production may also allow consumers to satisfy diverse social needs. Modern times increase the feeling of personal alienation and loneliness. People try to overcome this by creating social networks based around various topics and socially connecting factors. Those may include age, social status, interests and life styles. Consumption of particular items and shared interests and experiences offer attractive bases for social networks. Co-production creates social networks of consumers, users and employees who share common experiences and give consumers a sense of belonging.
Modern consumption culture is often tied to life styles, implying that it is the actual type of use of the product which gives it its meaning. When consumers use the product in a given use context and in conjunction with other products and services, they create the actual benefits the product can provide.
Therefore, marketers need to recognize that co-production is not an automatic consumer’s situation. To engage consumers in co-production, marketers have to ensure that they offer suitable products and services to consumers with a higher propensity to engage in co-production activities. In order for consumers to agree to such endeavours, marketers must find what benefits targeted consumers seek in such activities and offer them packages which can fulfill such needs.
Co-production implemented in Compumatrix
Compumatrix engages consumers in the co-production of the virtual prepaid cards in the distribution of Compuceeds. With consumers becoming part of the production process, they become fully aware of the benefits of the cards not only for themselves but to other consumers they reach. These benefits greatly improves their economic situation, and satisfies their psychological and diverse social needs. With these they continue to endeavor on the co-production, marketing and sales of the cards.