According to Prahalad and Ramaswamy (2004) co-creation is becoming more popular as consumers become more aware of the value they receive from companies. This is partly down to the increase in consumer-to-consumer communication and reviews, which is an instant way of sharing positive and negative experiences.
Prahalad and Ramaswamy (2004) also state the basis of co-creation is working with the consumer to create an experience, with added value, to the needs of the consumer. It moves the company away from being firm-centric to bring the consumers attentions to the whole package that can be offered.
The example given by Prahalad and Ramaswamy (2004) is WebMD. More than 70 million Americans annually access the online medical service, the use of this, and the vast amount of other online support, enables patients to access an array of further information and support that may have not been available solely through their doctor. This provides an added value to the services provided from their medical professionals.
The move from firm-centric to co-creation is not a simple process. It means more than just deciding that is now the path you wish you company to take. They key points are to make your information as transparent as possible, and as accessible as they can, involve customers by asking for feedback and hold discussions on their experiences. From the discussions and feedback companies are then able to take what they are doing well and what they need to improve. This process will then enable the firm to look at what may be a risk, and what may be a benefit, to them, and the co-creation process. This may be know as DART (Dialogue, Access, Risk-Benefits and Transparency) according to Prahalad and Ramaswamy (2004)
From this I can see that co-creation is beneficial as it helps firms determine what their consumers would like to be getting from their services. It also has the potential to increase their consumer base through the consumer-to-consumer communication networks, based on positive experiences.
Prahalad, C. and Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18(3), pp.5-14.