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Wageningen University - Department of Social Sciences

MSc Thesis Economics of Consumers and Households

The effects of co-creation on brand and product perceptions

26 August 2011

UPDATE June 2012: This Master thesis is adapted to an article format and is recently submitted to an international academic journal. For the forthcoming article, a different research method is used than for this thesis: estimated maximum likelihood in LISREL using the covariance matrix of the measures. For more information please contact the author.

Specialisation:

Student:

Management, Economics and Consumer studies

Joyce van Dijk, 841018208030

Thesis code:

Supervisor:

ECH- 80433

Prof. dr. Gerrit Antonides


The effects of co-creation on brand and product perceptions Do consumer perceptions change if a brand engages in co-creation collaborations with consumers to develop new products?

Image by HYVE , 2011

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Acknowledgements This MSc thesis is the result of an extensive research process on the topic of ‘co-creation’. Co-creation comprises partnerships between consumers and companies in which they jointly develop new ideas. In accordance with this philosophy, this thesis is the result of a co-creation between different parties and myself. Without the input of experienced co-creation practitioners, experts, professors, market researchers, students, and consumers, this thesis would definitely be of less value. Therefore, I would like to thank everyone for their advice, critical feedback, support and encouragement. In particular, I would like to thank Martijn van Bijnen, who offered me the biggest support from start to finish. I am also grateful for the support of my supervisor Gerrit Antonides, who gave me great freedom to develop and shape my own ideas. Martijn en Gerrit’s constructive feedback, encouragement, and reflection on my work stimulated me in getting the best out of myself. The collected data for this study is of good quality thanks to the sponsorship of Insites NV. With a strong belief in my study, they programmed my questionnaire and collected data for it within their online consumer panel. Thanks to their team’s commitment and attentiveness, the process of data collection went smoothly and was completed successfully. Throughout the course of this study, I launched an interactive weblog about co-creation (Joycediscovers.wordpress.com), I entered the world of Twitter (@Joycediscovers), and I published articles on the Dutch online platform Frankwatching. This allowed me to check my findings, to analyse different viewpoints, to develop my opinion, and to exchange ideas with others. I noticed that, by observing others and sharing my thoughts, I retrieved a lot of valuable information.

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Abstract Van Dijk, J. (2011). The effects of co-creation on brand and product perceptions. Wageningen University, Faculty of Social Sciences. Increasingly often companies ‘co-create’ with consumers in open innovation practices to develop relevant new products. Besides this main purpose, the author expected that co-creation also serves to enhance brand and product perceptions in the mass market, which mainly consists of non co-creative consumers. It was hypothesised that co-creative brands -as opposed to non co-creative brands- are perceived as more authentic and sincere, and that their products are evaluated more positively. A between-subjects experiment was conducted to test these hypotheses in an online consumer panel. The experiment had a 3 (co-creation level: control vs. co-creation vs. co-creation supported with some visual proof) x 2 design (brand effect: well-known brand X and fictitious brand Y) and respondents were randomly assigned to one of the six cells. Quantitative data analyses (N=530) showed that co-creation indeed positively influenced brand and product perceptions: it especially enhanced perceptions of sincere brand personality, brand relationship, and brand partner quality and trust. Providing visual proof to support the co-creation message resulted in a stronger co-creation effect, but only for the well-known brand, and only on the brand aspects ‘real/authentic’, ‘original’, ‘cheerful’, ‘accessible’, and product aspect ‘uniqueness’. The well-known brand X scored higher on all brand-related constructs. There was no significant interaction effect (brand x co-creation). As opposed to the co-creation treatment, the brand treatment did not significantly influence scores on the constructs of product evaluation, behavioural intentions, and willingness to pay. Overall, this study shows that co-creating with consumers is not only useful as an innovation practice, but also as a strategic method to strengthen brand value and positively influence product perceptions.

Keywords: co-creation, open innovation, consumer involvement, brand personality, brand value, brand associations, consumer perceptions, product development, product evaluation, marketing, consumer preferences.

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Contents Abstract ................................................................................................................................................................. 4 Executive summary ............................................................................................................................................... 8 I

II

Introduction ................................................................................................................................................. 10 1.1

Co-creation .......................................................................................................................................... 10

1.2

Research questions.............................................................................................................................. 10

1.3

Relevance ............................................................................................................................................ 11

1.4

Research scope .................................................................................................................................... 13

1.5

Practitioner expectations .................................................................................................................... 13

1.6

Overview.............................................................................................................................................. 14

Theoretical framework ................................................................................................................................ 15 2.1

Co-creation as a new business paradigm ............................................................................................ 15

2.2

The effect of co-creation on perception ............................................................................................. 17

2.2.1 Brand perceptions .............................................................................................................................. 17 2.2.2 Product perceptions ........................................................................................................................... 20 2.2.3 Behavioural intentions ....................................................................................................................... 21 2.2.4 Moderating variables ......................................................................................................................... 21 2.3. III

Conceptual model ............................................................................................................................... 23

Methods....................................................................................................................................................... 24 3.1

Design .................................................................................................................................................. 24

3.2

Measures ............................................................................................................................................. 25

3.3

Sample ................................................................................................................................................. 26

3.4

Data collection ..................................................................................................................................... 27

3.5

Data analysis ........................................................................................................................................ 27

3.5.1. Data inspection and demographics ................................................................................................... 27 3.5.2 Data reduction .................................................................................................................................... 29 IV

Results.......................................................................................................................................................... 30 4.1

Brand effects ....................................................................................................................................... 31

4.1.1 Brand personality ............................................................................................................................... 31 4.1.2 Brand relationship .............................................................................................................................. 33 4.1.3 Brand partner quality and trust.......................................................................................................... 35 4.2

Product perceptions ............................................................................................................................ 37

4.2.1 Product evaluation ............................................................................................................................. 37 4.2.2 Expected product success .................................................................................................................. 39

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4.2.3 Willingness to pay............................................................................................................................... 40 4.3

Behavioural intentions ........................................................................................................................ 42

4.4

Mediators of product and brand evaluation ....................................................................................... 43

4.5

Brand effects ....................................................................................................................................... 44

4.6

Partnership fit ...................................................................................................................................... 44

4.7

Providing ‘proof’ in the co-creation message ..................................................................................... 45

4.8

Summary of the hypotheses outcomes............................................................................................... 46

4.9

Additional findings............................................................................................................................... 48

V

Limitations ................................................................................................................................................... 51

VI

Conclusions and implications ...................................................................................................................... 52

VII Future research............................................................................................................................................ 54 References ........................................................................................................................................................... 55 Appendices.................................................................................... ...................................................................59

List of Figures Figure 1: Different levels of value outcomes and the focal level of this study ..................................................... 11 Figure 2: The focal dimensions that determine consumer perceptions ............................................................... 17 Figure 3: Five dimensions of brand personality .................................................................................................... 18 Figure 4: Traits of the sincere brand personality .................................................................................................. 18 Figure 5: Indicators of brand relationship strength .............................................................................................. 19 Figure 6: Conceptual research model and hypotheses ......................................................................................... 23 Figure 7: Mean scores per cell on the construct brand personality ..................................................................... 31 Figure 8: Mean scores per cell on the construct brand relationship .................................................................... 33 Figure 9: Mean scores per cell on the construct brand partner quality ............................................................... 35 Figure 10: Mean scores per cell on the construct product evaluation ................................................................. 37 Figure 11: Mean scores per cell on the item expected product success .............................................................. 39 Figure 12: Mean scores per cell on the construct ‘behavioural intentions’.......................................................... 42 Figure 13: Mean scores per cell on the construct co-creation partnership fit ..................................................... 44 Figure 14: Mean scores on co-creation attitude statements (q22) ...................................................................... 50 Figure 15: Mean scores on co-creation suitability per product type (q23)........................................................... 50

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List of Tables Table 1: Overview of research on co-creation and value outcomes ..................................................................... 12 Table 2: Evolution producer-consumer relationships per period and focus......................................................... 16 Table 3: Summary of all hypotheses and the direction of the expected effect .................................................... 23 Table 4: Treatments within the 3x2 design ........................................................................................................... 24 Table 5: Experimental set-up of the between-subjects design ............................................................................. 24 Table 6: Measure descriptions in order of appearance in the questionnaire....................................................... 25 Table 7: Percentages of answers to the control question, before and after adjustment. .................................... 28 Table 8: Categories before and after weighting (N=530) ...................................................................................... 28 Table 9: Constructs and reliability ......................................................................................................................... 29 Table 10: Contrasts used to detect treatment effects .......................................................................................... 30 Table 11: Tests of between-subjects effects on brand personality ...................................................................... 31 Table 12: Contrasts showing treatment effects on brand personality ................................................................. 32 Table 13: Tests of between-subjects effects on brand relationship ..................................................................... 33 Table 14: Contrasts showing treatment effects on brand relationship ................................................................ 34 Table 15: Tests of between-subjects effects on brand partner quality ................................................................ 35 Table 16: Contrasts showing treatment effects on brand partner quality ........................................................... 36 Table 17: Tests of between-subjects effects on product evaluation .................................................................... 37 Table 18: Contrasts showing treatment effects on product evaluation ............................................................... 38 Table 19: Tests of between-subjects effects on expected product success ......................................................... 39 Table 20: Contrasts showing treatment effects on expected product success .................................................... 40 Table 21: Mean willingness to pay per cell ........................................................................................................... 40 Table 22: Correlation coefficients between willingness to pay and overall evaluations ...................................... 41 Table 23: Tests of between-subjects effects on behavioural intentions .............................................................. 42 Table 24: Contrasts showing treatment effects on behavioural intentions ......................................................... 43 Table 25: Correlation coefficients for mediators on product and brand evaluation ............................................ 43 Table 26: Items that score higher on co-creation ‘extra’ compared to co-creation ‘simple’ for brand X ............ 45 Table 27: Summary of the hypotheses’ expected (E) and observed (O) outcomes .............................................. 46 Table 28: Sizes of co-creation effects on the constructs ....................................................................................... 47 Table 29: Tests of between subjects showing interaction effect gender*co-creation ......................................... 48 Table 30: Correlation coefficients for personality and gender with co-creation attitude items .......................... 49 Table 31: Means scores of males compared to mean scores of females ............................................................. 49

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Executive summary Introduction Increasingly more often companies embrace consumers as ‘co-creation’ partners in their innovation practices. Consumers, traditionally considered value exchangers or extractors, are now considered a source of value creation and competitive advantage. Co-creative consumers willingly collaborate with companies in order to empower themselves, exert influence, gain recognition and enjoy themselves (Füller, 2010). They are eager to voice their opinions about products and brands and are important influencers that can shape brand conversations worldwide (Van Dijk, 2011). By creating and managing an active dialogue with consumers, companies can connect to their most important influencers as well as their main source of innovative ideas (Harvard Business Review, 2011). Consumers’ skills and insights help companies develop relevant products that closely mirror consumer needs and have an increased chance of market success (Hoyer et al.,2010). Remarkably little is known about how co-creation practices influence consumers who are not directly involved in the co-creation process. It is unclear if co-creation influences their perceptions of a brand or a product in any way. This is meaningful to find out as this group concerns the vast majority of consumers, considering that only a small percentage of consumers actively co-create. Perceptions are important drivers of consumer behaviour and influence brand associations and relations (Keller, 1993). This study therefore explores co-creation effects on consumer perceptions by finding answers to the following sub questions: Are co-created brands perceived as more authentic and sincere? Does co-creation affect the extent to which consumers relate to brands? Does co-creation strengthen brand trust and commitment? Do consumers evaluate co-created products differently than non co-created products? Does co-creation influence behavioural intentions toward a product? Does showing evidence of the co-creation enhance effects on product and brand perceptions? Do product/ brand involvement and familiarity moderate the effects of cocreation on product and brand perceptions? Theory and hypotheses Literature shows that modern consumers are sceptical toward advertising and scrutinise marketing messages. They are in search of authenticity and make judgments about what they perceive to be genuine, real and true. The concept of authenticity is captured by Aaker’s (1997) description of the sincere brand personality type. As one of the five brand personality types identified by Aaker (1997), the sincere personality type is important in building, deepening and strengthening consumers’ relationships with brands (Aaker, 1999, Aaker et al. 2004). By engaging in and committing to co-creation practices, brands develop sincere partnerships with consumers. It was therefore hypothesised that co-creation strengthens a brand’s sincere personality perceptions and improves brand relations. It was also hypothesised that, as a result, co-created products are evaluated more positively than similar non co-created products, on the aspects of attractiveness, innovativeness, relative advantage, and expected success. Lastly, it was hypothesised that behavioural intentions and willingness to pay are positively influenced by the awareness that a product is co-created. Past research showed that cocreation spurs word-of-mouth, triggers curiosity of consumers and enhances sales levels (Van Dijk, 2011a). Research method and execution The expected co-creation effects were explored via an experiment with a post-test only control group design. In a between-subjects experiment respondents were asked to evaluate one new product concept from a particular brand. Because of the 3 (co-creation level: control vs. co-creation vs. co-creation supported with some visual proof) x 2 design (brand effect: well-known brand X and fictitious brand Y), respondents were

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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randomly assigned to one of 6 treatment cells. Brand X is the well-known Dutch brand Honig, which actually provided the food product concept visual used in the experiment, making the experiment quite realistic. Brand Y is the fictitious brand Samo. The experiment was executed by means of a questionnaire and consisted of measures based on established theoretical constructs. There was also a ‘control question’ incorporated, to check whether respondents were actually aware of the treatment (by asking them who they thought developed the product). The research sample was drawn from the online Dutch consumer panel ‘TalkToChange’, owned by Insites NV. Respondents who finished the questionnaire too quickly, or who answered the control question incorrectly, were excluded from the final sample. The final sample (N=530) was then weighted to ensure a national representative age distribution and an equal gender distribution, within and between cells. Results and conclusions Results show that awareness of co-creation indeed positively influences brand and product perceptions. Knowing that brands collaborated with consumers in new product development, especially enhanced respondents’ brand perceptions, relational aspects and brand partnership evaluations. This study herewith shows that co-creation changes how a brand is experienced and the value it provides for consumers. Evaluations with a focus on the product, showed to be less responsive to co-creation. Nevertheless, co-created products are considered significantly more attractive, innovative, unique and better suited to needs, compared to the same product that is presented as non co-created. Product evaluations are thus also influenced by associations and beliefs, besides purely product attributes and quality. Providing visual proof to support the co-creation message results in a stronger co-creation effect for the well-known brand X, but only on the brand aspects ‘real/authentic’, ‘original’, ‘cheerful’, ‘accessible’, and product aspect ‘uniqueness’. Even though this is a small effect in this study, it shows the added value of elaborating on the co-creation further than merely providing textual information. There was no significant interaction effect between treatments (brand x co-creation), so co-creation affected both brands the same way. The well-known brand X scored higher on all brand-related constructs. The brand treatment did not significantly influence the scores on the constructs of product evaluation, behavioural intentions, and willingness to pay. This study shows that co-creating with consumers is not only useful as an innovation practice, but also as a strategic method to strengthen brand value and positively influence product perceptions.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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I

Introduction

1.1

Co-creation

Siemens, Danone, BMW, Unilever, Procter & Gamble, Kraft foods, and Beiersdorf: are just a small grasp of the companies that embrace consumers as partners in their innovation practices. In 2000, Prahalad and Ramaswamy (2004a) coined this development ‘co-creation’: the process in which both parties systematically interact, learn, share information and integrate resources to jointly create value (Van Dijk, 2011). So, consumers collaborate with companies in developing relevant new products together. They engage in partnerships with companies as an opportunity to e.g. empower themselves, exert influence, gain recognition and enjoy themselves (Füller, 2010). Consumers are willing contributors, as Lay’s 2010 Maak de Smaak campaign illustrated. As much as 311,000 consumers responded to an open call to come up with ideas for a new flavor (Van Dijk, 2011a). The campaign generated a lot of word-of-mouth and sales numbers for the new product exceeded expectations (Van Dijk, 2011a). Traditionally, companies kept innovation practices quite closed to third parties, so what stimulates this radical change? First of all, consumer goods companies have to try ever so hard to attract the modern day critical and internet savvy consumer. Advertising has a decreased impact due to media clutter and skepticism, and traditional strategies require revision (Holt, 2002). Also, the large majority of new product introductions fail and companies have to innovate faster, better and cheaper in order to compete (Van Dijk, 2011). A second reason for companies to embrace co-creation is the societal interconnectedness. Consumers communicate through social media networks and are eager to voice their opinions about products and brands. They are important influencers that can shape brand conversations worldwide and influence the direction of product innovations (Van Dijk, 2011). By creating and managing an active dialogue with consumers, companies can connect to their most important influencers as well as their main source of innovative ideas (Harvard Business Review, 2011). The third reason to embrace co-creation is that consumers’ skills and insights help companies develop relevant products that closely mirror consumer needs and have an increased chance of market success (Hoyer et al.,2010). Co-creation practice is currently becoming an important competitive imperative and is listed as a top research priority (Hoyer et al. 2010).

1.2

Research questions

Little is known about how co-creation practices influence consumers who are not directly involved in the cocreation process. It is unclear if their perceptions of a brand or a product is in any way affected by the awareness of co-creation. The main research question of this study therefore is: Do consumer perceptions change if a brand engages in co-creation collaborations with consumers to develop new products? (as opposed to when the brand does not apply co-creation) In order to break down this question and formulate more specific hypotheses, the author used relevant theory from academic literature. With use of these theories, several sub questions were formulated that enabled reaching a comprehensive conclusion:    

Joyce van Dijk

Are co-created brands perceived as more authentic and sincere? Does co-creation affect the extent to which consumers relate to brands? Does co-creation strengthen brand trust and commitment? Do consumers evaluate co-created products differently than non co-created products?

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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  

1.3

Does co-creation influence behavioural intentions toward a product? Does showing evidence of the co-creation enhance effects on product and brand perceptions? Do product/ brand involvement and familiarity moderate the effects of co-creation on product and brand perceptions?

Relevance

The effects of co-creation on perceptions of consumers that do not participate in co-creation, are hardly known (Table 1, at the end of this section). The lack of research data is striking, since the majority of consumers are not participating in co-creation (Hoyer et al., 2010). According to Face Agency (2009) and eYeka (2011) as much as 99% of the total target group is represented by non participators. The main purpose of this study is to fill this gap in academic research and to identify the influence of co-creation on a representative cross section of consumers. It explores whether brand associations change and whether products are evaluated differently when they are the result of co-creation. The results can help companies decide whether or not they should embrace co-creation not only as a practice for new product development, but also as a tool to enhance brand and product meanings. Co-creation can then become a strategic part of brand positioning and differentiation from competitors in the market. There are several aspects on which co-creation can have value effects, as shown by research results in Table 1. Figure 1 below summarises these value outcomes at three different levels: level 1 comprises the value generated from the co-creation interaction between the brand and the co-creative consumers. Studies on this level mostly explore the motivations, perceptions and attitudes of the consumers that participate in cocreation. Level 2 covers value effects on performance outcomes, such as sales numbers and experienced value.

Focus of this study

Figure 1: Different levels of value outcomes and the focal level of this study

Level 3 comprises indirect value: effects on overall product and brand perceptions of the general target group. Fuchs and Schreier (2011) pioneer in studying perception effects of co-creation by focusing on non co-creative consumers. Their study shows consumers have a stronger preference for companies that co-create, compared to companies that do not involve consumers in product development. This preference is driven by perceived customer orientation: the belief that co-creative firms more strongly put the customer’s interest first (Fuchs & Schreier, 2011). Fuchs and Schreier (2011) herewith identify a halo effect of co-creation. However, their experiment does not explore effects on existing brands and does not isolate specific brand effects.

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Also their research set-up requires respondents to compare and choose between either a non co-created product or a co-created product. This direct comparison might have cued the respondents to the objective of the research or might have created a focal bias which affects internal validity. Fuchs and Schreier (2011) as well as Hoyer et al. (2010) underline the need for further research to unfold the effects of co-creation on consumer perceptions. Table 1: Overview of research on co-creation and value outcomes

Focus

Aspects

Findings

Source

The co-creation partnership (Level 1)

Company loyalty

Consumers that participated in co-creation have increased loyalty toward the company (Sawhney et al., 2005; Sheth et al., 2000: cited in Fuchs & Schreier, 2011).

Fuchs and Schreier, 2011

Customer relationship

Co-creative consumers have a stronger customer relationship with the participating firm (Füller, 2010) (Nambisan & Baron, 2007; Nambisan and Nambisan, 2008; Ogawa & Piller, 2006: cited in Bilgram et al., 2011). Co-creation also cultivates trust and supports a desired brand image (Füller, 2010; Hollebeek, 2011). Co-creation fosters positive word-of-mouth communication coming from the co-creation participants (Bilgram et al., 2011; Piller & Ihl, 2009). Co-creation reduces research and development costs, increases product relevance and performance, and opens new markets (Chesbrough & Schwartz, 2007: cited in Van Dijk 2011) (Dahan and Hauser, 2002; Lilien et al., 2002; Piller, 2006: cited in Fuchs & Schreier, 2011)( Koufteros et al., 2005; Leonard, 1999; Lau et al., 2010.: cited in Weber, 2011)(Hull, 2004; Payne et al., 2008; Bowers et al., 1990; Fang, Palmatier & Evans, 2008; Lilien et al. 2002: cited in Hoyer et al., 2010). Co-creation reduces uncertainty regarding environmental and user demands (Gales & Mansour-Cole, 1995; Leonard, 1999: in Weber, 2011).Cocreation creates a larger pool of available information, which increases effectiveness and speed of product development (Thomke & Von Hippel, 2002; Piller & Ihl, 2009; cited in Van Dijk, 2011). Consumers from the periphery (non co-creative consumers) perceive co-creative firms as being more customer oriented. Consumers from the periphery prefer products that result from co-creation, when having to choose between co-created versus non co-created products.

Bilgram et al., 2011; Hollebeek, 2011; Füller, 2010

Direct value outcomes ( Level 2 )

WOM

Product and firm performance

Halo effects on mass market (Level 3)

Joyce van Dijk

Perceptions and preference

MSc thesis ‘The effects of co-creation on brand and product perceptions’

Bilgram et al., 2011 ; Piller and Ihl, 2009 Van Dijk, 2011; Fuchs and Schreier, 2011; Weber, 2011; Hoyer et al., 2010

Fuchs and Schreier, 2011

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1.4

Research scope

Co-creation can take place throughout the product development cycle, or merely in a single phase such as idea generation, new product design, or product engineering (Füller et al., 2006, Bartl et al., 2010). This research approaches co-creation as an integral part of product development: the co-created product is the result of a continuous process of collaboration between consumers and the firm. This study focuses on brands and products from the fast-moving consumer goods (FMCG) sector. FMCG products are familiar to consumers, frequently purchased with minimal effort, relatively low costs and are rapidly consumed (Dibb et al., 2006, p. 298). By focusing on this sector, the study aims to retrieve results with a broad practical relevance. Furthermore, brands are the primary points of differentiation in the FMCG market (Wood, 2000), so examining the brand effects of co-creation would be meaningful. Also strong brands provide a broad platform for product innovations and line extensions (Aaker, 1991 in Wood, 2000), which offers many possibilities for applying co-creation.

1.5

Practitioner expectations

In preliminary research by the author, eight co-creation practitioners or experts have been interviewed (see Van Dijk, 2011a). The respondents offered insights into the role of co-creation in their organisations and how benefits, success factors, risks and challenges are experienced. Furthermore, the respondents shared their thoughts and expectations on the influence of co-creation on consumer perceptions. Overall, the respondents were highly confident that brand and product perceptions are affected by co-creation (Van Dijk, 2011a). However, they were unsure at what levels these effects would occur and how strong the effects would be. Ruurd Priester (Lost Boys LBi) commented: “Chances increase that you generate brand value and brand preference [...] consumers feel more involved with the firm, are better able to identify themselves with the brand and have the feeling their feedback is taken seriousy.” Michael Blankert (PepsiCo) argued: “By means of co-creation you can get closer to consumers, (…) consumers will feel more connected to your brand. Ghaurav Bhalla, established author and expert on co-creation, also commented on this study: “When consumers become aware that a brand co-creates, they get curious about this and more interested in the brand […] I would expect it also influences brand perceptions positively." (Bhalla, 2011). When asked how companies can ensure that co-creation intentions are perceived as sincere, Bhalla answered that the only way is by conduct. By behaving according to co-creation principles and demonstrating promises with actions “you generate authenticity and trust with consumers,” Bhalla explained.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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1.6

Overview

Chapter 2 of this report will elaborate on literature and theory to provide the structure of the study and to formulate hypotheses. The first section of the chapter will elaborate on the concept on ‘co-creation’ and why it is an important concept in today’s innovation practices. The second section will focus on a theoretical background for this study in specific, and the formulation of hypotheses. In Chapter 3 the research method and measures will be discussed. This chapter explains how the research experiment is developed and executed. It will also elaborate on how the data is collected, inspected and reduced to develop meaningful constructs. Chapter 4 will describe the results of the experiment and is constructed similar to section two of Chapter 2. In chronological order the hypotheses will be tested and outcomes will be discussed. Chapter 5 the limitations of this study will be described. These limitations should be taken into account before drawing conclusions on the results. Chapter 6 will describe the conclusions that can be drawn from the research outcomes. The implications of the outcomes provide an overview of what this paper contributes to current knowledge. The value and use of co-creation for companies is discussed and underlined. Chapter 7 will discuss new ideas for future research. Using this study as a starting point, it will be interesting to further analyse the co-creation effect on consumer perceptions in future research.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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II

Theoretical framework

This chapter firstly introduces the key concept of ‘co-creation’ to establish the appropriate theoretical background and context. Section 2.1 illustrates how consumer-producer relationships have changed and why co-creation is important in current business practices. Section 2.2 introduces the theoretical framework specific to this study. Here, the hypotheses are introduced that are used to analyse the effect of co-creation on consumers perceptions.

2.1

Co-creation as a new business paradigm

Modern consumers are resistant to commercial product information and advertising claims (Van Dijk, 2011). They carefully evaluate and scrutinise company behaviour and react against perceived discrepancies between brand promises and actions (Holt, 2002). This behaviour is enabled by the internet, now an interactive platform where consumers look up, add, adapt, and share information and opinions (Van Dijk, 2011). Because of this worldwide connectedness and active voicing, consumers have become powerful influencers that can affect brand and market value (Van Belleghem, 2010). They are especially critical toward the most successful and lauded companies, which they perceive to be unwilling to empower and involve consumers (Holt, 2002). Consumers seek to adopt only the products they trust and like, exerting increasing influence over distribution channels and product offer (Dalli et al. 2007). They make their own judgments about what is “true, genuine and real” and differentiate between authentic and inauthentic behaviour (Holt 2002). Consumer resistance and empowerment causes old branding paradigms to make way for new branding principles (Holt, 2002). Consumers desire brands to be transparent and open to consumer feedback and inputs. Over the last decades, companies have had to change strategies in order to compete and adapt to the modern market and consumer culture. Abundant offer, decreasing brand loyalty and high failure rates of new products forced companies to explore new business paradigms. Around the year 2000 there was a gradual shift in mindset and companies started engaging in collaborations with third parties. This strategic change enabled them to innovate in a cooperative mode and to make better and faster use of ideas (Piller & Ihl, 2009, Hargadon & Sutton, 2000, cited in Van Dijk, 2011). Open innovation practices have now extended to collaborations with consumers, who willingly participate in new product development and take on different roles (Van Dijk, 2011) (Appendix I). Fostered by technological developments, the availability of online tools allows consumers to independently conceptualise their ideas and collaborate with companies via e.g. online communities. While consumers were traditionally viewed as value exchangers and extractors, they are now considered a source of value creation and competitive advantage (Table 2). Co-creation between companies and consumers is one of the most promising areas of development in the virtual consumer environment (Füller et al., 2010, cited in Van Dijk, 2011).

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Table 2: Evolution producer-consumer relationships per period and focus

Period

Focus

Authors

1970s

Self- service and Prosumption

Late 1980s

Customer-centricity

1990s

Mass customization

2000

Open innovation Co-creation

other terms:

2006

Web 2.0, social media, user generated content

Consumers gained more responsibility in the production and consumption of goods. More sectors started implementing self-service desks. The term 'McDonaldization', first mentioned by Ritzer (1983), is symbolic for companies’ focus on efficiency by providing uniform, standardized services. Companies shifted their focus from a goods-centered logic, to a service-centered logic focused on meeting consumer needs. Distribution channels and logistics changed: firms wanted to deliver products faster and on the location the customer desired.

Rieder and Voss (2010) and Ritzer and Jurgenson (2010*)

Companies are developing and delivering affordable goods and services with great variety, so that almost every consumers can find what they want. Consumers can customize products to the extent in which a company’s production chain allows it. There are little or no channels back into the company, making adaptive or generative learning difficult. Consumers are now engaged systematically, not selectively, in business processes. Instead of merely playing a role in value exchange and extraction, consumers are ‘co-creating’ value. The traditional production chain is reshaped into a dynamic network mechanism where consumers are continuously interacting with producers, learning and sharing ideas . Service-dominant logic (Vargo & Lusch, 2009), working consumers (Rieder & Voss, 2010). Other terms cited in Weber (2011): customer participation (Barki & Hartwick,1989; Martin & Horne, 1995), user involvement (Alam, 2002; Kaulio, 1998), consumer involvement (Pitta & Franzak, 1996), partnership (Campbell & Cooper, 1999), value co-production (Normann, 2001; Normann & Ramirez, 1993; Ramírez, 1999), customer integration (Koufteros et al., 2005; Reichwald et al., 2005), community sourcing (Prügl & Schreier, 2006), customer interaction (Gruner & Homburg, 2000), and customer involvement (Alam, 2006a). Bilgram et al. (2011) cites terms such as collaborative innovation (Sawhney et al. 2005; Prandelli et al. 2006), virtual customer integration (Dahan & Hauser 2002), community based innovation (Füller et al. 2006), and user innovation (von Hippel 1988, 2005) Web 2.0 greatly enables co-creation by the providing interactive platforms, communities and social media. Open-source software allows users to design, build, adapts and distribute online data. All users can contribute, leading to 'collective intelligence' (O'Reilly, 2007), 'wisdom of the crowds' (Kozinets et al., 2008), and 'produsage' of data (Bruns, 2008).

Van Dijk (2011), Piller (2010). Davidow and Malone (1992); Grönroos (1990); Gummesson (1991, 1993); Pine (1993); Toffler (1980, 1983): as cited in Wikström (1994)

Piller (2010), van Dijk (2011). Mirchandani (2005*), Cova and Dalli (2009*), Vargo and Lusch (2004), Prahalad and Ramaswamy (2004a)

Van Dijk (2011), Prahalad and Ramaswamy (2004a), Bilgram et al. (2011), Rieder and Voss (2010), Piller (2010), Füller et al. (2010).

Vargo and Lusch (2009), Rieder and Voss (2010), Weber (2011), Bilgram et al. (2011)

O'Reilly (2007), Bruns (2008), Kozinets et al. (2008)

*as cited in Van Dijk (2011)

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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2.2

The effect of co-creation on perception

Figure 2 introduces the dimensions that are explored throughout this study. One dimension considers cocreation effects on brand perceptions or evaluations such as brand personality. The effect of brand personality on consumer interactions is determined by the relationship strength and perceived brand partner quality between a consumer and a brand (Aaker et al. 2004). The other dimension in which co-creation effects on perceptions are explored, is on a product level. Products are evaluated on aspects such as overall attractiveness and comparative benefits relative to other products. These evaluations in turn influence overall perceptions and behavioural intentions such as trial, purchase and word-of-mouth referrals.

Brand evaluations: Brand personality Relationship strength Brand partner quality Consumer perceptions of a branded product Product evaluations: Attractiveness Comparative advantage Figure 2: The focal dimensions that determine consumer perceptions

The next section introduces and explores these two dimensions with use of literature. Based on this, specific hypotheses (H) are formulated, which are summarised in a conceptual framework at the end of the chapter.

2.2.1 Brand perceptions Consumers’ perceptions of brands are important drivers of consumer behaviour (Aaker & Biel, 1993). Functional differences between brands are becoming more trivial and the importance of emotional and ‘soft’ concepts such as brand personality are recognised by researchers and marketers (Kaplan et al., 2010). These perceptions play an important role in creating brand loyalty and in driving consumer behaviour (Keller, 1993, Aaker, 1999). This is because brands reflect emotional and symbolic value and facilitate consumers’ selfexpression (Aaker, 1999). According to Keller (1993) brand associations are determined by the level of brand awareness and the perceptions of brand image (Appendix II). One component of brand image is brand personality, which is the main focus of this study. Consumers make personality inferences based on brand actions, such as marketing campaigns or promotional activities (Keller, 1993). Aaker (1997) developed a scale for measuring brand personality dimensions largely based on the ‘big five’ human personality scales used in psychology (Digman 1990, in Aaker 1999) (Figure 3). Aaker’s brand personality scale is largely applied by marketing academics and professionals and is recognised as a reliable framework (Kaplan et al. 2010). The scale approaches five personality dimensions which consist of 42 traits in total: sincerity, excitement, competence, ruggedness and sophistication (Appendix III). In order to identify which personality type a brand is associated with, the traits are evaluated based on their relevance and suitability (Geuens et al., 2009).

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Brand personality

Sincerity

Excitement

Competence

Sophistication

Ruggedness

Figure 3: Five dimensions of brand personality (Aaker, 1999)

Sincerity and authenticity Aaker’s (1997) brand personality model can be used to approach the concepts of sincerity and authenticity. These concepts play an increasingly important role in creating brand value (Beverland and Farrelly, 2010). Aaker et al. (2004) underline the importance of ‘sincere’ brand personality types in the formation of ideal partner relationships. Similar to friendships, relationships with sincere brands deepen and strengthen over time and can grow as a result of increasing trust and dependability (Aaker, 1999, Aaker et al. 2004). Modern consumers are looking for brands that don’t appear commercialised, but are viewed as sincere friends or part of a community (Beverland, 2005). The desire for authenticity is considered to be a response to postmodern market characteristics, standardisation and homogenisation in the market place. Holt (2002) argues consumers have become conscious of marketer manipulation and use personal strategies to resist this. The modern day desire for authenticity is moving away from the former focus on heritage and history of brands, and focuses on ‘realness’. To be authentic “brands should be perceived as invented and disseminated by people who are intrinsically motivated by their inherent value” (Holt, 2002). The meaning of authenticity depends on the perception of the individual as well as the brand context, making it difficult to measure (Beverland & Farrelly, 2010). It is also difficult for brands to pursue, since authenticity cannot attained by explicitly claiming and communicating this. It should be constructed through “behind-the-scene systems that make them [brands] appear less commercialised” (Beverland, 2005). Beverland and Farrelly (2010) analysed the different interpretations and found a consistency across literature, which is that authenticity “encapsulates what is genuine, real, and/or true” (Arnould & Price, 2000; Bendix, 1992; Berger, 1973; Costa & Bamossy, 1995; Thompson et al., 2006: cited in Beverland & Farrelly, 2010). From this perspective, Aaker’s (1997) scale for measuring ‘sincere’ brand personality seems appropriate in capturing the concept (Figure 4) down-toearth smalltown

sentimental cheerful

honest

Sincere brands

original wholesome

sincere real

Figure 4: Traits of the sincere brand personality (Aaker, 1997)

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The author expects that co-creation can be an effective system for brands to construct authenticity and display sincere involvement with consumers. Co-creation is aimed at interaction, creating and maintaining an authentic and open dialogue, and incorporating consumer needs (Van Dijk, 2011). if this co-creation is then communicated to the general target group within a sincere storyline, a stronger brand sincerity perception is expected. Hence the first hypotheses: H1:

Brands that co-create are perceived to have more sincere personalities than brands that do not co-create

Brand relationship aspects The effect of brand personality on consumer interactions is determined by the relationship strength between a consumer and a brand (Aaker et al. 2004). Brand personality itself is a perception: consumers who like a brand and consumer who dislike a brand describe brand personality in much the same way (Blackston, in Aaker & Biel, 1993). Thus, there is a need to go beyond the description of personality and find out whether co-creation evokes positive or negative relationship associations. Aaker et al. (2004, based on Fournier, 1999) deduced four indicators of brand relationship strength: commitment, satisfaction, intimacy and self-connection (Figure 5). ‘Commitment’ is conceptualised in terms of faithfulness and the desire to continue the brand relationship even if small sacrifices are required (Aaker et al. 2004, Smit et al. 2007). ‘Satisfaction’ aims to uncover happiness in the relationship with the brand and satisfaction when comparing brands’ performance versus expectations (Aaker et al. 2004). ‘Intimacy’ concerns psychological closeness and demonstrates the degree in which consumers are willing to share information with the brand with the purpose of improving the relationship further (Aaker et al. 2004, Smit et al. 2007). Fournier (1999) argues that to enhance consumer intimacy, brands should be honest about commercial intent and use of sensitive information. ‘Self-connection’ is described as “the extent to which the brand is part of the self, part of the self image, and refers to the question whether the consumer and his or her brand have lots in common” (Smit et al. 2007). When consumers have positive associations with a brand, this is the result of a fit between their personality and the personality of the brand (Fournier, 1999). People often view themselves in terms of positive personality traits, so the ability of a brand to express these traits often results in positive affect (Aaker, 1999). The author expects that co-creation will strengthen consumer-brand relationships. Co-creation requires a certain intimacy between consumers and brands, as co-creative consumers share information and closely collaborate with a brand. As a result, other consumers might feel more strongly related to the cocreative brand as well. This is based on the idea that consumers identify with the participants of the cocreation, and consider them an ‘in-group’: a group of people they feel like they belong to (Escalas & Bettman, 2005). Escalas and Bettman (2005) find that the level of self-connection is enhanced with brands whose images are consistent with an ‘in-group’.

Brand relationship Commitment

Satisfaction

Intimacy

Self-connection

Figure 5: Indicators of brand relationship strength (Aaker et al. 2004)

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This study therefore proposes the following hypothesis about consumer-brand relationships, captured in the aspects of commitment, satisfaction, intimacy and self-connection: H2:

Co-creation enhances brand relationship: consumers feel more related to brands that co-create, than to brands that do not co-create

Brand partner quality and trust The aspects of brand partner quality and trust are important measures in addition to the previously discussed indicators of brand relationship. Partner quality refers to the brand in terms of taking good care of the consumers, showing interest, and being reliable (Aaker et al, 2004, Smit et al., 2007). This evaluation is based on consumer inferences about trustworthiness, reliability, conflict avoidance and conflict resolution (Aaker et al., 2004). Trust is one of the most important aspect in creating successful consumer-brand relationships (Aaker & Biel, 1993). Trustworthy brands are more likely to be included in consumers’ consideration set (Erdem& Swait, 2004) and positively influence purchase loyalty and attitudinal loyalty (Chaudhuri & Holbrook, 2001). Continuous dialogical interaction between consumers and brands contributes to the development of trust, further facilitating dialogue and knowledge exchange (Sweeney & Swait, 2008). The concept of trust in turn is closely tied to depth of commitment (Hess & Story, 2005) and can be inferred by perceptions of sincerity (Aaker, 1999). Research shows that when potential consumers are made aware that a product is co-created, they will try the product sooner because of a reduced perceived risk and diminished doubts (Hoyer et al., 2010). It is therefore expected that co-creation also generates trust, when consumers start considering the brand as a (potential) dialogue partner. It is known that consumers have more trust in information coming from peers, than they do in corporate messages (Van Dijk, 2010, Bhattacharya & Sen, 2003, Chen and Xie 2008). Since cocreation is done with people that consumers can relate to as peers, it is expected that brands are trusted more when they apply co-creation. H3:

Consumers have more trust in brands that co-create, and consider them better partners than brands that do not co-create

H4:

Brand partner quality is positively related to sincerity (brand personality)

H5:

Brand partner quality is positively related to brand relationship strength

2.2.2 Product perceptions One reason for applying co-creation is to get access to a greater variety of ideas, skills and viewpoints. This is done with the purpose of creating highly relevant products which are commercially attractive (Hoyer et al., 2010, Etgar, 2008, Prahalad & Ramaswamy, 2004). Besides measuring actual new product performance, it is interesting to explore to which extent co-creation influences perceptions and expectations of new products. To determine whether new product concepts are likely to be successful in the market, they are evaluated on aspects such as attractiveness, innovativeness and relative advantage. Overall attractiveness relates to product appeal and the desire to use the product. Innovativeness considers the product as being the first of its kind in the market (Kleinschmidt & Cooper, 1991). Kleinschmidt and Cooper (1991) show that

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innovativeness does not directly result in a more attractive product. They argue to also take into account new product advantage, which refers to a product’s superiority relative to other available products on dimensions such as benefits and uniqueness (Kleinschmidt & Cooper, 1991). Overall appeal and attractiveness directly influence how much consumers are willing to pay to purchase the product. It is expected that consumers evaluate new products that are developed in co-creation with consumers as more favorable, as stated in the next hypotheses: H6:

Products that are co-created are evaluated more favorable than products that are not co-created

H7:

Products that are co-created are expected to be more successful than products that are not cocreated

H8:

Consumers are willing to pay more for products that are co-created than for products that are not co-created

2.2.3 Behavioural intentions It is unknown to which extent co-creation influences actual behavioural intentions of consumers toward branded products. Research shows that consumers have a more positive attitude toward a product when they themselves have co-created the product with the company (Hollebeek, 2011). Co-creation practitioners indicate that co-creation generates more buzz around new products and triggers curiosity of consumers (Van Dijk, 2011a). Product performance results also promise an overall positive effect: sales numbers for the cocreated products Lay’s Patatje Joppie and Pickwick’s Dutch blend turned out much higher than sales for similar line extensions, according to the companies’ data (Van Dijk, 2011a). However, it is unsure if and to which extent this effect is due to the co-creation aspect or to other variables. To test this, the following hypothesis is proposed: H9:

Consumers have more favorable behavioural intentions toward products that are co-created than toward products that are not co-created

2.2.4 Moderating variables Involvement and familiarity The level of product involvement is positively correlated with a consumer’s brand attitude and purchase intention (Chen & Leu, 2011). It is therefore useful to measure product category involvement and determine whether it mediates the outcomes of this study. There are many different theoretical approaches to the construct of involvement (Chen & Leu, 2011, Bloch et al. 2009). Overall, it is recognised as a function of the product, situation or communication (Bloch et al., 2009). This study focuses on enduring involvement, which reflects a long term general concern with the product class across all purchase situations (Bloch & Richens, 1983, Havitz & Mannell, 2005, Zaichkowsky, 1985: in Bloch et al., 2009). In addition to this, brand familiarity is expected to be a mediator in this study. Brand familiarity is an important aspect of consumer decision making for three main reasons. Firstly, brands which are not highly familiar also do not have highly-developed brand associations in consumers' memory (Low & Lamb, 2000).

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Secondly, brand familiarity will increase the likelihood that the brand is part of the consumers’ consideration set (Keller, 1993). Lastly, research shows that in case of low product involvement consumers often adopt a decision rule to buy only familiar, well-established brands (Keller, 1993). H10:

Higher involvement, more frequent usage, and higher familiarity with products/brands leads to more positive overall evaluations

Aaker (1996) questions whether brand personality is sensitive to change. In case brand personality is stable it may be difficult to detect changes in sincerity traits for established and familiar brands. In this case, cocreation might not (immediately) influence brand personality perceptions. When consumers are unfamiliar with a brand, they make brand personality inferences based on all the information that is provided to them. Therefore the following hypothesis is constructed: H11:

There are stronger co-creation effects if the brand is unfamiliar

Fit between the brand and the co-creation aspect Drawing on co-branding literature, it shows it is important for consumers to perceive a fit between two collaborating partners. In this study the brand partners are the original brand on the one hand, and the cocreative consumers on the other hand. When the partnership is perceived as inconsistent or conflicting, the collaboration will be judged as inappropriate, according to co-branding studies (Simonin & Ruth, 1998). It is therefore expected that the extent in which the co-creation collaboration is evaluated as positive, depends on the perceived fit between the brand and the co-creative consumers. Hence the hypothesis: H12: Partnership fit is positively related to overall perceptions and intentions

Elaboration of the message Another variable that is expected to influence overall effects of co-creation is the construction of the cocreation message. In advertising products there is a focus on keeping the message short and simple (Darley & Smith, 1993). However, co-creation practitioners underline the importance of providing tangible evidence when communicating about co-creation (Van Dijk, 2011a). The optimal evidence for co-creation is conduct: demonstrating to have integrated co-creation into product development processes and providing transparent information and access to co-creation platforms (Van Dijk, 2011a). However, when co-creation is a new element in the brand’s behaviour, consumers will search for proof to support or invalidate the co-creation claim (Van Dijk, 2011). This proof can become more tangible if the brand offers information about the cocreation process in the product/ advertising message. Darley and Smith (1993) show that tangible messages are more credible and effective then impressionistic, intangible messages. H13: Providing additional ‘proof’ in the co-creation message results in a stronger effect on perceptions than providing only a description

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2.3.

Conceptual model

The conceptual research model for this study is depicted in (Figure 6). The model start with the experiment treatment ‘co-creation’, which influences consumer perceptions of a branded product and intentions toward this product. Consumer perceptions consist of two main dimensions: brand evaluations and product evaluations. The effect on perceptions as a result of co-creation is expected to be moderated by the consumer’s level of involvement with the brand and the product category. The perceived fit of co-creation between the brand and the consumers is also likely to moderate the influence of co-creation. Lastly, the manner is which the co-creation message is presented is also expected to moderate the co-creation effect. The formulated hypotheses are summarised in Table 3.

Brand and product involvement (H10) (H11)

Brand evaluations: Sincerity (H1) Relationship strength (H2) Brand partner quality (H3) Consumer perceptions of a branded product

Co-creation

Partnership fit (H12) Co-creation message (H13)

Product evaluations: Attractiveness (H6) Comparative advantage (H6) Expected success (H7)

Moderators

Intentions: Willingness to pay (H8) Behaviour (H9)

Influencers

Outcome

Figure 6: Conceptual research model and hypotheses

Table 3: Summary of all hypotheses and the direction of the expected effect

Specific effects effects

Overall effects

Expected +effect

Hypothesis Dependent variable

In dependant variable

H1 H2

Sincere personality Brand relationship strength

Co-creation (vs. no co-creation) Co-creation (vs. no co-creation)

H3

Brand partner quality

Co-creation (vs. no co-creation)

+

H4

Brand partner quality

Sincere personality

+

H5

Brand partner quality

Brand relationship strength

+

H6

Product evaluation

Co-creation (vs. no co-creation)

+

H7

Expected success

Co-creation (vs. no co-creation)

+

H8

Willingness to pay

Co-creation (vs. no co-creation)

+

H9

Behavioural intentions

Co-creation (vs. no co-creation)

+

H10

Overall evaluations

Product/ brand involvement, usage, familiarity

+

H11

Co-creation effect

Brand familiarity

-

H12

Overall perceptions

Partnership fit

+

H13

Overall perceptions

Co-creation level (‘simple’ versus ‘extra’)

+

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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III Methods 3.1

Design

This study was done according to an experimental post-test-only control group design. The experiment had a multi-factorial 3x2 design (Table 4). The manipulated variables were the co-creation level (A/B/C) and the branded product (X/Y). Product X was a new home-cooked food concept for from an existing and well-known Dutch brand (Honig); product Y was the same product only with a fictitious label (Samo) to replace the wellknown brand name. The treatments (A/B/C) differed in the way the product development is described; either as exclusively producer-created (A) or as co-created with consumers (B and C). Treatment C differed from treatment B as it contains additional information and two extra visuals. To detect brand effects, half of the respondents evaluated the same product under the fictitious brand name Samo (brand Y). The branded product was presented by means of a concept board that contained a description and a visual. Respondents were led to believe that the purpose of the study was to get their opinions about this new product concept. This was done to avoid a focal bias on the aspect of co-creation, and to prevent cueing the respondents about the real goal of the experiment. The product that was used in the study is an actual new concept developed by Honig and not (yet) on the market. The product concept is believable and attractive and could not already be familiar to the respondents. Table 4: Treatments within the 3x2 design

Product brand

Co-creation level

X (Honig) Y (Samo)

A A

B B

C C

The experiment had a between-subjects design: every respondent was randomly exposed to one product and one co-creation level (Table 5). Six groups were needed to measure the effects of the two treatments. The benefit of such a design is that the subject could not be cued to the objectives of the different treatments in the experiment, which enhances internal validity. Furthermore, this design diminished the risk of fatigue because the experiment took less time and effort than a within-subject design would have. Also practice effects were avoided that could occur if respondents are exposed to more than one treatment, which is the case in a within-subject design. Table 5: Experimental set-up of the between-subjects design

Cell

Branded product

1 2 3 4 5 6

Joyce van Dijk

X X X Y Y Y

Co-creation level A B C A B C

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A weakness of the between-subjects design is that it can result in a higher error variance as a result of confounding variables, due to individual differences between respondents. This can lower the statistical power of the experiment. Furthermore, in a between-subjects design there is a higher risk of a type 2 error: not finding an effect when there actually is one. These weaknesses were diminished by ensuring a large sample size, randomizing respondents to treatments and limiting variability between groups of respondents by weighting groups. To ensure high internal validity, great attention was paid to the selection of measurement items. The items were based on established constructs within academic research or drawn from the work of established researchers. Also, the concept boards for each treatment were carefully designed in order to ensure similar lay-outs, wording and amount of information. The same attention was paid to the questionnaire, e.g.: when questions consisted of multiple items/statements, the order of these items was randomised per respondent to avoid order effects.

3.2

Measures

This study tests for a variety of co-creation effects and draws on different theory and research. In order to create a questionnaire that is still practical in use and that prevents fatigue effects, the author aimed to use measures with a reduced number of items. The structure of the questionnaire is summarised in Table 6, and shows the order in which the measures appeared in the questionnaire. The question number (Q) in the first column matches with the questionnaire. A full (English) description of how the measurement items are developed and formulated can be found in Appendix IV. As the final questionnaire is in Dutch, the items that were drawn from English constructs were translated by the author and checked via back translation by the market research company Insites NV (see Appendix V for more information about Insites NV). Table 6: Measure descriptions in order of appearance in the questionnaire

Q

Measure

Source

Items

Answer category

Introduction 3

Product usage

Esch et al. (2006)

1

5 answer categories

4

Category involvement

Zaichkowsky (1985)

3

7 point Likert scale (1= completely disagree, 7= completely agree)

5

Brand familiarity

Low and Lamb (2000)

1

7 point response scale (1=completely unfamiliar, 7=completely familiar)

6

Brand usage

Esch et al. (2006)

1

5 answer categories

Product effects 8

Overall appeal

Insites NV

1

(1=totally not attractive, 7= totally attractive)

9

Product advantage

Song and Parry (1996)

1

7-point Likert scale (1=completely disagree, 7=completely agree).

10

Product innovativeness

Song and Xie (2000)

1

11

Product uniqueness

Bruner et al. (2005, p. 618)

1

7-point response scale (1=completely not innovative and different, 7=very innovative and different) 7-point response scale (1=No unique features at all, 7=many unique features)

12

Behavioural intentions

Bruner et al. (2005, p.444, p. 641)

4

7-point Likert scale (1=completely disagree, 7=completely agree).

13

Expected success

Insites NV

1

7-point response scale (1=completely not successful, 7=very successful)

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14,15

Acceptable price

Gabor and Granger (1966)

2

Price range from €0,50 to €3,50, with 31 price steps of €0,10

Brand effects 16

Sincere brand personality

Aaker (1999)

11

7-point response scale (1=completely not applicable, 7=completely applicable)

17: 1,2

Brand relationship: commitment

Smit et al. (2007)

2

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 3,4,5

Brand relationship: intimacy

Smit et al. (2007)

3

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 6

Brand relationship: satisfaction

Esch et al. (2006)

1

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 7,8

Brand relationship: self-connection

Smit et al. (2007)

2

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 9,10

Trust

Esch et al. (2006)

2

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 11,12

Brand partner quality

Smit et al. (2007)

2

7-point Likert scale (1=completely disagree, 7=completely agree)

17: 13

Accessibility

Onkenhout and Vlek (2010)

1

7-point Likert scale (1=completely disagree, 7=completely agree)

1

Three single-response answers categories

4

7-point Likert scale (1=completely disagree, 7=completely agree)

Closing questions 18

Control question

19

Co-creation partnership fit

Leunis (2007)

(moderator) Personality and characteristics 20: 1

Personal innovativeness

Yi et al. (2006)

1

7-point Likert scale (1=completely disagree, 7=completely agree).

20: 2,3,4

Opinion leadership

Bruner and Kumar (2007)

3

7-point Likert scale (1=completely disagree, 7=completely agree).

Co-creation familiarity Co-creation statements

1

Open question 7-point Likert scale (1=completely disagree, 7=completely agree).

23

Co-creation suitability for different sectors

10

3.3

Sample

(moderator) Co-creation attitude 21 22

6

7-point response scale (1=completely not suitable, 7=completely suitable).

The main experiment was conducted within a large and representative random sample drawn from the online Dutch consumer panel ‘TalkToChange’. This panel is owned by Insites NV, who sponsor this study by facilitating this panel service to the author (see Appendix V for more information). The TalkToChange panel consists of more than half a million active members in over 25 countries, the Dutch panel consists of about 110,000 active members. All panel members have agreed to the privacy-policy of Insites NV and with the method of data collection and usage. The author did not have access to profile information of individuals that identify or could identify the panel members. Quota were set to the data collection with respect to the composition of the sample. This way it was aimed that the population sample consisted of six groups of about the same size, that each contain 50% male and 50% female respondents. The age distribution of the respondents was aimed to be between 18 and 65 years old in each group. Respondents who claimed they would never consider purchasing the product type

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used in the experiment, were excluded from the sample. Furthermore, respondents who are not responsible for grocery purchases were excluded as well. This was done to ensure respondents have experience with product choice and price levels.

3.4

Data collection

Pilot Survey A pilot survey, in the form of a printed questionnaire, was conducted to make sure the co-creation concept presentations were clear and understandable to respondents. There were two different versions of the questionnaire: one version tested the concept under the co-creation treatment, and the other version tested the concept under the ‘control’ treatment. Appendix VI contains the pilot survey results. The respondents were 20 randomly selected students who were approached in the Forum building of Wageningen University. The students had no prior knowledge about the research and are unknown to the author. They were asked to indicate by whom they thought the product -shown in the concept presentation- is developed: a) by solely experts of the brand, b) by solely consumers, or c) by experts of the brand and consumers together. They were also asked to indicate whether or not this information became clear from the product concept presentation. The results of the manipulation checks show that the co-creation concept was very clear and effective. The ‘control’ version of the concept was not completely clear, as the term ‘expert’ seemed to confuse some of the students. Accordingly, the concept text was adapted to avoid this confusion in the main experiment. Main Experiment The final questionnaire was programmed by Insites NV. The programming and the routings were checked by Insites NV and by the author. To gather data, potential respondents were approached by an email invitation with a short description of the research. As an incentive, respondents had a chance to win a €300.- prize; this prize was randomly allocated to one of the respondents. Also, the respondents supported charity goals because for every completed questionnaire, Insites NV donates a certain amount of money to Unicef. The e-mail invitation was opened by 1,630 panel members and 868 of these also completed the questionnaire (see Appendix VII). After the first day, the collected data was analysed and checked to ensure that the online questionnaire was programmed correctly and functioning well. Throughout the period in which the questionnaire was online and accessible to the invited panel members, Insites NV periodically checked response rates and quota. When panel members did not respond to the email invitation, they received another invitation after 48 hours. When the invited panel members did not complete a sufficient number of questionnaires, additional invitations were sent to a new randomly drawn set of panel members.

3.5

Data analysis

3.5.1. Data inspection and demographics Respondents who completed the questionnaire very quickly were removed from the dataset of 868 respondents. This led to the removal of 20 respondents, who finished the questionnaire within 4 minutes. From the remaining 848 respondents, 84% spent more than 7 minutes to finish, 6% spent 6-7 minutes, 6% spent 5-6 minutes and 4% spent 4-5 minutes. The respondents who answered the control question (q18: “Drawing on the product information you just read, who do you think developed the [products]?”) incorrectly, were also removed. Throughout the data collection it showed that especially respondents in the control group answered this question wrongly, even after the answer categories were adjusted for a second time (Table 7). It remains uncertain whether or not an

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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actual co-creation treatment effect occurred with these respondents. To avoid obscuring the data analysis and to ensure reliable hypotheses testing, it was decided to leave out the 318 respondents who answered q18 incorrectly. This resulted in a selected sample of N=530. In Appendix VIII, data from the selected respondents is compared to the excluded respondents. This showed no striking differences. The excluded respondents did have a somewhat lower level of completed education compared to the selected sample. An explanation could thus be that these respondents did not completely understand the control question or the concept text, and therefore gave the wrong answer. Table 7: Percentages of answers to the control question, before and after adjustment. Cell 1= Brand X No co-creation

Control question original

Brand 39%* Co-creation 61% Consumers 0% adjusted Brand 46% Co-creation 52% Consumers 2% *Green highlighted cells indicate the correct answer

Cell 2 = Brand X Co-creation ‘simple’ 24% 76% 0% 29% 70% 1%

Cell 3= Cell 4 = Brand X Brand Y Co-creation No co-creation ‘extra’ 8% 45% 92% 55% 0% 0% 17% 51% 78% 48% 5% 1%

Cell 5= Brand Y co-creation ‘simple’ 27% 73% 0% 31% 68% 1%

Cell 6= Brand Y Co-creation ‘extra’ 16% 81% 3% 21% 79% 0%

The selected data sample (N=530) was weighted to ensure age distribution matches the national representative distribution for the Netherlands according to Eurostat data. Gender distribution was weighted to get an equal division of 50% male and 50% female. Then, a weighting was applied to ensure the data is comparable between all six cells (Table 8). This final weighting comprises the variables age, sex, brand usage and category usage. For an overview of the weighted distributions per cell see Appendix IX, for an overview of the weight factor distribution in the sample see Appendix X). Table 8: Categories before and after weighting (N=530)

Existing Brand X (Honig) Original total

Fictitious brand Y (Samo)

Gender

Male Female

43,6% 56,4%

Weighted distribution Cell1 Cell2 Cell3 50% 50% 50% 50% 50% 50%

Age category

18-24 25-34 35-44 45-54 55-65

6,4% 12,9% 20,1% 28% 32,6%

12% 22% 24% 22% 20%

12% 22% 24% 22% 20%

46,6% 53,4%

Weighted distribution Cell4 Cell5 Cell6 50% 50% 50% 50% 50% 50%

12% 22% 24% 22% 20%

4,9% 14,3% 19,5% 28,9% 32,3%

12% 22% 24% 22% 20%

12% 22% 24% 22% 20%

12% 22% 24% 22% 20%

22,2% 39,8% 17,7% 13,9% 6,4%

22,2% 39,8% 17,7% 13,9% 6,4%

22,2% 39,8% 17,7% 13,9% 6,4%

22,2% 39,8% 17,7% 13,9% 6,4%

Category usage*

1 2 3 4 5

14,8% 40,5% 18,2% 18,9% 7,6%

14,8% 40,5% 18,2% 18,9% 7,6%

14,8% 40,5% 18,2% 18,9% 7,6%

14,8% 40,5% 18,2% 18,9% 7,6%

Brand usage*

1 2 3 4 5

11,7% 37,9% 25% 17,4% 8%

11,7% 37,9% 25% 17,4% 8%

11,7% 37,9% 25% 17,4% 8%

11,7% 37,9% 25% 17,4% 8%

Original total

*Category usage is related to q3, brand usage is related to q6 (1=“Once a week or more,” 2=“Once a month or more,” 3=“Once every three months or more,” 4=“less than once every three months,” 5=“Not purchased”)

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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3.5.2 Data reduction In order to use the proposed measurement constructs in the data analyses, the scale reliability of each construct was calculated as well as the factor loadings of the individual construct components (see Appendix XI). To check scale reliability Cronbach’s alpha (a) was used: values of around 0.8 are considered reliable (Field, 2005). The Kaiser-Meyer-Olkin (KMO) measure was used to ensure distinct and reliable factors were extracted. The KMO statistic can vary between 0 and 1: a value close to 1 indicates that factor analysis yields reliable factors (Field, 2005). Separate reliability analyses were run for all subscales of the questionnaires: all constructs showed high reliability and no items had to be removed. Each construct represents the overall mean score calculated from the items that it consists of. The questions that are not included in the constructs, are used in the analyses as separate variables. The data is normally distributed, as showed by the QQ-plots of the observed and expected values on the constructs ‘overall brand evaluations’, ‘overall product evaluation’, ‘behavioural intentions’ and ‘willingness to pay’(Appendix XII). Table 9: Constructs and reliability

Questions

Construct

Items

Cronbach’s a

Product involvement 3 0.83 q8-q11, q13 Product evaluation 5 0.89 q12 Behavioural intentions 4 0.94 q16 Sincere personality 11 0.93 q17_1-q17_8 Brand relationship 8 0.93 q17_9-q17_13 Brand partner quality and trust 5 0.86 * Overall product evaluation 9 0.94 * Overall brand evaluation 13 0.95 q19 Co-creation partnership fit 4 0.90 *Consists of the variables used in constructs ‘Product benefits’ and ‘Behavioural intentions’ **Consists of the variables used in constructs ‘brand relationship’ and ‘brand trust and partner’

q4

Joyce van Dijk

KMO 0.69 0.85 0.76 0.94 0.90 0.81 0.90 0.94 0.81

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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IV Results This chapter is constructed according to the sections in the theoretical framework, and discusses results per hypothesis. Firstly, brand effects will be discussed, followed by product effects, effects on behavioural intentions, and remaining effects. In analysing the treatment effects, the following steps are taken: Step 1: Factorial ANOVA The first step in analysing whether there is a treatment effect on each construct is conducting a 2x3 two-way independent factorial ANOVA. This method breaks the total variance of all scores down into variance explained by both treatments, variance explained solely by the first independent variable (the brand treatment), variance explained by the second independent variable (the co-creation treatment), and the interaction of these two variables (brand treatment * co-creation treatment). The effect size is reported with partial η2, which describes the strength of association between the predictors (co-creation level and brand) and the dependant variable. A partial η2 of 0.01 is a small effect, 0.09 a medium effect and 0.25 a large effect (Field, 2005). Step 2: Contrast results Co-creation effects as a result of the treatments (co-creation level and brand type) are explored by means of a number of contrasts. These contrasts compare a certain group mean (overall mean score within a cell) to another group’s mean, or a number of groups together (see Table 10). The contrasts in aspect A focus on comparing the co-creation ‘simple’ cells to the control cells. The control cells are always the cells with the treatment of ‘no co-creation’, where the branded product is presented as producer created. The overall contrasts in A aim to discover an overall effect of co-creation ‘simple’ (comparing cells 1 and 4 to cells 2 and 5), the effects for brand X in contrast 2 (comparing cell 1 to cell 2) and the effects for brand Y in contrast 3 (comparing cell 4 to cell 5). Aspect B compares the co-creation ‘extra’ cells to the control cells. This comparison is done to measure the overall effect in contrast 1, and the effect per brand in contrasts B2 and B3. Aspect C compares the average effect of co-creation by taking the average scores of the co-creation cells ‘simple’ and ‘extra’, and comparing these to the control cells. This is done for both brands together in contrast 1, and for the brands separately in contrast C2 and C3. In section 4.7 the co-creation cells are also compared to each other, to explore whether co-creation ‘extra’ yields higher scores than co-creation ‘simple’. Table 10: Contrasts used to detect treatment effects

Aspect A

B

C

Co-creation ‘simple’ vs. control

Co-creation ‘extra’ vs. control

Co-creation average vs. control

Joyce van Dijk

Contrast

Control cells

Test cells

1: Overall

1+4

2+5

2: Brand X (Honig)

1

2

3: Brand Y (Samo)

4

5

1: Overall

1+4

3+6

2: Brand X (Honig)

1

3

3: Brand Y (Samo)

4

6

1: Overall

1+4

2+3+5+6

2: Brand X (Honig)

1

2,3

3: Brand Y (Samo)

4

5,6

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Step 3: Separate item analysis Since the contrast analysis comprises only the group means, it does not take into account the individual contribution of each item within a construct. Therefore, the same contrast are run for the separate construct items, to detect which items especially influence the treatment effects.

4.1

Brand effects

4.1.1 Brand personality

7 6 5

4.2

4

4.6

4.8

4.5

4.5

3.8

3 2 1 No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

brand Y

Figure 7: Mean scores per cell on the construct brand personality

Figure 7 shows the mean scores and the standard error of the mean (SEM) per cell on the construct brand personality. The factorial ANOVA model shows a medium effect of co-creation level and brand on the level in which a brand is considered as ‘sincere’: F(5,534)=9,38, p<0,01, partial η2=0,08 (Table 11). This means that 8% of the variance between these groups on the aspect of sincere brand personality is explained by the treatment conditions co-creation and brand (controlling for other predictors). There is a main effect of the co-creation on the extent in which a brand personality is perceived as sincere: F(2,534)=17.32, p<0.01, partial η2=0.06. There is also a main effect of brand on sincere personality perceptions: F(1,534)=7.44, p<0.01, partial η2=0.01. As Figure 7 shows, brand X scores higher than brand Y in all three co-creation levels. There is no interaction effect of brand*co-creation level: F(2,534)=0.84, p=0.43, partial η2<0.01. Table 11: Tests of between-subjects effects on brand personality Dependent Variable: Brand Personality Source Corrected Model Intercept Brand Co-creation Brand*Co-creation

Type III Sum of

df

Mean Square

P-value

Partial η2

Squares 49.38a

5

9.88

9.38

.00

.08

15547.78

1

15547.78

14767.97

.00

.97

7.83

1

7.83

7.44

.01

.01

36.46

2

18.23

17.32

.00

.06

.84

.43

.00

1.76

2

.88

Error

562.20

534

1.05

Total

16209.09

540

611.57

539

Corrected Total

F

a. R Squared = .08 (Adjusted R Squared = .07)

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Overall contrast results Table 12 shows the contrast results of the co-creation treatment. Since there is no significant interaction effect, it is not meaningful to analyse the contrasts on brand level. Contrast C shows co-creation leads to a more sincere personality perception, with an overall mean difference of 0.59 point between the control cells and the co-creation cells (t-value=6.07, p<0.01). Overall means of the ‘simple’ co-creation cells results in an average mean difference of 0.54 point (contrast A: t-value=4.98, p<0.01). The co-creation ‘extra’ cells differ with 0.64 point from the control cells (contrast B: t-value=5.78, p<0.01). Table 12: Contrasts showing treatment effects on brand personality (no equal variances assumed)

A B C

Value of

Focus

Contrast

Std. Error

Contrast

1

‘simple’ vs. control

1

‘extra’ vs. control

1

average vs. control

Overall Overall Overall

.54

.11

.64

.11

.59

.10

T

Df

P-value. (1tailed)

4.98

340.78

.00

5.78

360.35

.00

6.08

327.52

.00

Analyses of separate personality traits Analyses of separate brand personality traits that make up the construct of brand personality, shows that all contrasts yield significant effects. This means that co-creation yields a more positive sincere personality perception on all individual traits. However, for brand X (Honig) 3 out of 11 items did not score significantly better in the co-creation ‘simple’ compared to the control cell (contrast A, a=0.1) on the aspect: ‘small-town’, ‘real/authentic’, and ‘original’. Comparing the co-creation ‘extra’ cell to the control cells did yield significant higher scores on all the latter items (contrast B, a=0.05). H1:

Brands that co-create are perceived to have more sincere personalities than brands that do not co-create (SUPPORTED)

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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4.1.2 Brand relationship 7 6 5 4

4.4

4.2

3.8

3.4

3.1

2.6

3 2 1

No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

Brand Y

Figure 8: Mean scores per cell on the construct brand relationship

The mean scores (and SEM) per cell on the construct of brand relationship are displayed in Figure 8. The factorial ANOVA shows a medium effect of the treatments on the aspects of brand relationship: F(5,534)=13.01, p<0.01, partial η2=0.1 (Table 13). There is a significant main effect of co-creation level on the strength of brand relationship: F(2,534)=10.24, p<0.01, partial η2=0.04. There is also a main effect of brand on the level of brand relationship strength: F(1,534)=35.93, p<0.01, partial η2=0.06. As Figure 8 shows, brand X scores higher on brand relationship strength than brand Y, on all co-creation levels. There is no significant interaction of brand * co-creation level: F(2,534)=2.15, p=0.12, partial η2<0.01. Table 13: Tests of between-subjects effects on brand relationship Dependent Variable: Brand Relationship Source

Type III Sum of

df

Mean Square

F

P-value

Partial η2

Squares Corrected Model

114.53

a

5

22.91

13.01

.00

.11

Intercept

5957.57

1

5957.57

3384.31

.00

.86

Brand

63.25

1

63.25

35.93

.00

.06

Co-creation

36.05

2

18.03

10.24

.00

.04

7.55

2

3.78

2.15

.12

.01

Error

940.03

534

1.76

Total

7027.92

540

Corrected Total

1054.56

539

Brand *Co-creation

a. R Squared = .11 (Adjusted R Squared = .10)

Overall contrast results It clearly shows that co-creation positively affects brand relationship strength (Table 14, next page). Taking the co-creation cells together and comparing them to the control cell, yields an average higher mean score of 0.61 points for co-creative brands (contrast C: t-value=5.05, p<0.01). Contrast A shows that the co-creation ‘simple’ treatment scores on average 0.62 point higher than the control cells on this construct (t-value=4.37, p<0.01). Contrast B shows that co-creation ‘extra’ scores 0.59 point higher than the control cells (t-value=4.29, p<0.01).

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Table 14: Contrasts showing treatment effects on brand relationship (equal variances assumed) Value of

Focus

Contrast

Std. Error

Contrast

A

1

‘simple’ vs. control

Overall

B

1

‘extra’ vs. control

Overall

C

1

average vs. control

Overall

T

P-value

Df

.62

.14

4.37

524

(1-tailed) .00

.59

.14

4.29

524

.00

.61

.12

5.05

524

.00

Analyses of separate items All items shows a significant difference on the contrast values, except for two items. For brand X the item describing ‘self-connection’ (item 8) shows no significant higher scores on the co-creation ‘simple’ treatment compared to the control cell (contrast A, at a=0.1), but does show a significant higher score in the co-creation ‘extra’ cell compared to the control cell (contrast B, at a=0.05). For brand Y, only the item ‘closeness’ shows no significant higher value when comparing co-creation ‘extra’ to the control cell (contrast B, at a=0.05), but does show a higher score for co-creation ‘simple’ versus the control cell (contrast A, at a=0.05). H2:

Consumers feel more related to brands that co-create, than with brands that do not co-create (SUPPORTED)

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MSc thesis ‘The effects of co-creation on brand and product perceptions’

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4.1.3 Brand partner quality and trust 7 6 5 4

4.6

4.4

3.9

3.9

3.8

3.1

3 2 1 No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

Brand Y

Figure 9: Mean scores per cell on the construct brand partner quality

Figure 9 displays the overall means (and SEM) of the construct brand partner quality per cell. The factorial ANOVA for the construct of brand partner quality yields an overall partial η2 of 0.14, which is a medium to large effect (Field, 2005). There is a significant main effect of co-creation on the level in which respondents consider brands a good partner and trust them: F(2,534)=13.84, p<0.01, partial η2=0.05 (Table 15). There is also a main effect of brand on the evaluation of the brand partner quality: F(1,534)=52.46, p<0.01, partial η2=0.09. Again, brand X yields higher mean scores than brand Y in all co-creation treatment cells. The interaction effect of brand*co-creation is not significant: F(2,534)=0.46, p=0.63, partial η2<0.01. Table 15: Tests of between-subjects effects on brand partner quality Dependent Variable: Brand partner quality and trust Source

Type III Sum of

Df

Mean Square

F

P-value

Partial η2

Squares Corrected Model

123.14

a

5

24.63

17.44

.00

.14

Intercept

8398.10

1

8398.11

5946.86

.00

.92

Brand

74.08

1

74.08

52.46

.00

.09

Co-creation

39.10

2

19.55

13.84

.00

.05

1.30

2

.65

.46

.63

.00

Error

754.11

534

1.41

Total

9290.75

540

877.25

539

Brand * Co-creation

Corrected Total

a. R Squared = .14 (Adjusted R Squared = .13)

Overall co-creation effects The average effect of co-creation on brand partner perceptions is positive, and results show that co-creative brands are perceived as better partners than non co-creative brands (Table 16, next page). Contrast C shows an average mean difference of 0.62 point (t-value=5.78, p<0.01). The co-creation ‘simple’ treatments score on average 0.56 point higher than the control cells (contrast A: t-value=4.47, p<0.01). Comparing the co-creation ‘extra’ cells to the control cells, shows the a mean difference of 0.69 point (contrast B: t-value=5.50, p<0.01).

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Table 16: Contrasts showing treatment effects on brand partner quality (no equal variances assumed) Value of

Focus

Contrast

Std. Error

Contrast

A

1

‘simple’ vs. control

Overall

B

1

‘extra’ vs. control

Overall

C

1

average vs. control

Overall

T

Df

P-value

.55

.12

4.47

331.05

(1-tailed) .00

.69

.13

5.50

351.57

.00

.62

.11

5.78

357.70

.00

Analyses of separate items All brand partner quality items shows significant results when on the contrasts. On the item ‘accessible’ (item 13) brand X does not show a significant effect when comparing co-creation ‘simple’ to the control cell (contrast A, at a=0.1), but does show a significant difference when comparing co-creation ‘extra’ to the control cell (contrast B, at a=0.05).

H3:

Consumers have more trust in brands that co-create, and consider them better partners than brands that do not co-create (SUPPORTED)

Relationship between trust and brand personality Analysis of the correlation between the construct of brand personality and brand partner quality yields a positive and highly significant result (Pearson’s r=0.7, p<0.01). It is expected that sincere personality traits generate a higher level of brand trust and partner quality inferences. Note that the direction of the relation cannot be proven here, theoretically it could be that trust influences brand personality. H4:

Brand partner quality is positively related to sincerity (brand personality) (SUPPORTED)

Relationship between trust and brand relation The constructs of brand trust (and partner quality) also show a strong correlation with brand relationship (Pearson’s r=0.85, p<0.01). H5:

Brand partner quality is positively related to brand relationship strength (SUPPORTED)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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4.2

Product perceptions

4.2.1 Product evaluation

7 6 4.5

5

4.8

4.3

5.0

4.8

4.7

4 3 2 1 No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

Brand Y

Figure 10: Mean scores per cell on the construct product evaluation

Figure 10 displays the mean scores per cell (and SEM) on the construct of product evaluation. The factorial ANOVA shows the treatments indeed influence product evaluation F(5,534)=3.07 (p<0.05, partial η2= 0.03 (Table 17). There is only a main effect of the co-creation treatment, F(2,534)=5.36, p<0.01, partial η2=0.02. There is no main effect of brand on product evaluation, F(1,534)=2.73, p=0.1, partial η2=0.01. There is also no interaction effect of brand*co-creation, F=(2,534)=0.62, p=0.54, partial η2<0.01.

Table 17: Tests of between-subjects effects on product evaluation Dependent Variable: Product evaluation Source Corrected Model

Type III Sum of

Df

Mean Square

F

P-value

Partial η2

Squares a 17.63

5

3.53

3.07

.01

.03

11728.21

1

11728.21

10215.03

.00

.95

3.14

1

3.14

2.73

.10

.01

12.30

2

6.15

5.36

.01

.02

.62

.54

.00

Intercept Brand Co-creation Brand* Co-creation

1.43

2

.72

Error

613.10

534

1.15

Total

12416.88

540

630.73

539

Corrected Total

a. R Squared = .03 (Adjusted R Squared = .02)

Overall co-creation effects Co-creation positively affects product evaluation (Table 18, next page). Results show that on average the cocreation cells score 0.43 point higher than the control cells (contrast A: t-value=4.20, p<0.01). When comparing the results of the ‘simple’ co-creation cells to the control cells, it shows co-created products score 0.41 point higher on average (contrast B: t-value=3.44, p<0.01). The co-creation ‘extra’ cells yield a positive mean difference of 0.45 point compared to the control cells (contrast C: t-value=3.97, p<0.01).

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Table 18: Contrasts showing treatment effects on product evaluation (no equal variances assumed) Value of

Focus

Contrast

Std. Error

Contrast

A

1

‘simple’ vs. control

Overall

B

1

‘extra’ vs. control

Overall

C

1

average vs. control

Overall

T

Df

P-value

.41

.12

3.44

343.69

(1-tailed) .00

.45

.11

3.97

361.25

.00

.43

.10

4.20

340.88

.00

Analyses of separate items The contrasts are used to evaluate each separate item that make up the construct ‘product evaluation’. It shows that brand X’ product is only considered more ‘attractive’ in the co-creation ‘extra’ cell, compared to the control cell (contrast B, at a=0.05). It does not show a significant higher score on ‘attractiveness’ when comparing only the co-creation ‘simple’ cell to the control cell (contrast A, at a=0.05). Co-created product X is also only considered more ‘unique’ in the co-creation ‘extra’ cell, compared to the control cell (contrast B, at a=0.05). It does not show a significant higher mean score when comparing only the co-creation ‘simple’ cell to the control cells (contrast A, at a=0.05). For brand Y, the co-created products are not considered more innovative and different, compared to the non co-created product (contrast C, at a=0.05). H6:

Products that are co-created are evaluated more favorable than products that are not co-created (ACCEPTED)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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4.2.2 Expected product success

7 6 4.7

5

5.0

5.2

4.9

4.4

4.9

4 3 2 1 No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

Brand Y

Figure 11: Mean scores per cell on the item expected product success

The item ‘expected success’ is also evaluated separately from the construct ‘product evaluation’ to test hypothesis 7. The mean scores (and SEM) are depicted in Figure 11. The factorial ANOVA shows an overall treatment effect on the expected success of the product: F(5,534)=3.62, p<0.01, partial η2=0.03 (Table 19). There is a main effect of the co-creation treatments, F(2,534)=5.47, p<0.01, partial η2=0.02. There is also a main brand effect: products from brand X are expected to be more successful compared to products from brand Y, with F(1,534)=5.84, p<0.01, partial η2=0.01. There is no interaction effect on brand*co-creation, F(2,534)=0.06, p>0.1, partial η2<0.01. Table 19: Tests of between-subjects effects on expected product success Dependent Variable: Expected success Source

Type III Sum of

Df

Mean Square

F

P-value

Partial η2

Squares a 25.31

5

5.06

3.62

.00

.03

12611.48

1

12611.48

9023.79

.00

.94

8.16

1

8.16

5.84

.02

.01

15.30

2

7.65

5.47

.00

.02

.16

2

.08

.06

.95

.00

Error

746.31

534

1.40

Total

13435.00

540

771.62

539

Corrected Model Intercept Brand Co-creation Brand * Co-creation

Corrected Total

a. R Squared = .03 (Adjusted R Squared = .02)

Overall co-creation effects The co-created products are expected to be more successful than the non co-created products (Table 20, next page). The average overall co-creation effect (contrast C) has a contrast value of 0.54 point (t-value=4.18, p<0.01). Co-creation ‘simple’ products have a 0.44 point higher expected success compared to the control cells (contrast A: t-value=3.36, p<0.01). Comparing the co-creation ‘extra’ cells to the control cells (contrast B), shows a mean difference of 0.52 point (t-value=4.1, p<0.01).

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Table 20: Contrasts showing treatment effects on expected product success (no equal variances assumed) Value of

Focus

Contrast

Contrast

A

1

‘simple’ vs. control

Overall

B

1

‘extra’ vs. control

Overall

C

1

average vs. control

Overall

H7:

Std. Error

T

Df

P-value

.44

.13

3.36

344.26

(1-tailed) .00

.52

.13

4.11

345.34

.00

.48

.12

4.18

320.58

.00

Products that are co-created are expected to be more successful than products that are not cocreated (SUPPORTED)

4.2.3 Willingness to pay The factorial ANOVA analysis shows there is no significant overall effect of the treatments on average price respondents are willing to pay: F(5,534)=0.84, p=0.52, partial η2<0.01. This means that for all cells the average price respondents are willing to pay does not significantly differ: it is around €2 (Table 21). Appendix XIII shows the percentage of respondents who consider the price cheap/expensive at a certain price level for each brand separately. Table 21: Mean willingness to pay per cell Mean

Std. Deviation

Std. Error of Mean

Cell 1 = Brand X, no co-creation

€2.04

.46

.05

Cell 2 = Brand X, co-creation ‘simple’

€2.14

.46

.05

Cell 3= Brand X, co-creation ‘extra’

€2.09

.47

.05

Cell 4 = Brand Y, no co-creation

€2.05

.61

.06

Cell 5= Brand Y, co-creation ‘simple’

€1.99

.62

.07

Cell 6= Brand Y. co-creation ‘extra’

€2.11

.52

.06

Also, the mean scores are analysed on the separate items, being the question ‘At what price do you consider this product [...] cheap?’ and the question ‘At what price do you consider this product [...] expensive?”. It shows that on the item ‘expensive’ there are significant differences for brand X: the willingness to pay for the co-created product is higher than for the non co-created product (control cell). On average the price level at which respondents consider the co-created products too expensive is €0.14 higher: t-value=2, p<0.05. Lastly, Pearson’s correlation coefficients show that there is a small relation between overall product and brand evaluation and willingness to pay (Table 22, next page). The price level at which the product is considered as expensive, increases in accordance with a more positive overall evaluation (at a=0.05 Pearson’s r=0.15 for overall product evaluation, and Pearson’s r=0.16 for overall brand evaluation). Overall evaluations are directly affected by co-creation, this leads to the belief that willingness to pay actually shows indirect cocreation effects in real life. However, this study shows no proof for this.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

40


Table 22: Correlation coefficients between willingness to pay and overall evaluations

Level at which product is considered cheap

Pearson’s r*

Level at which product is considered expensive

Pearson’s r

Overall Product evaluation .08

Overall Brand evaluation -

.15

.16

N=530

N=530

*only displayed is significant at a=0.05

H8:

Consumers are willing to pay more for products that are co-created than for products that are not co-created (NOT SUPPORTED)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

41


4.3

Behavioural intentions

7 6 5 3.9

4

4.2

4.0

4.5

4.4

4.4

3 2 1 No co-creation

Co-creation 'simple' Brand X

Co-creation 'extra'

Brand Y

Figure 12: Mean scores per cell on the construct ‘behavioural intentions’

Figure 12 shows the mean scores (and SEM) per cell on the construct of behavioural intentions, which contains items ‘trial intention’, ‘purchase intention’, ‘word-of-mouth’, and ‘recommendation intention’. The overall factorial ANOVA shows that the treatments did not significantly influence intentions: F(5,534)=1.27, p=0.28, partial η2= 0.01. However, the co-creation treatment effects are analysed further as significant effects between co-creation levels are expected: F(2,534)=2.85, p=0.06, partial η2=0.01. Table 23: Tests of between-subjects effects on behavioural intentions Dependent Variable: Behavioural intention Source

Type III Sum of

df

Mean Square

F

P-value

Partial η2

Corrected Model

Squares 13.75a

5

2.75

1.27

.28

.01

Intercept

9586.75

1

9586.75

4413.94

.00

.89

Brand

1.06

1

1.06

.49

.49

.00

Co-creation

12.39

2

6.20

2.85

.06

.01

Brand * co-creation

.83

2

.42

.19

.83

.00

2.17

Error

1159.81

534

Total

10817.13

540

Corrected Total

1173.56

539

a. R Squared = .01 (Adjusted R Squared = .00)

Overall co-creation effects Co-creation results in more positive behavioural intentions (Table 24, next page). On average the co-creation cells score 0.42 point higher on intentions compared to the control cells (contrast C: t-value=3.1, p<0.01). Comparing the mean scores of the co-creation ‘simple’ cells to the control cells (contrast A) it shows a more positive mean score of 0.34 point (t-value=2.14, p<0.05). Comparing the co-creation ‘extra’ to the control cells, yields a higher mean score of 0.5 point (contrast B: t-value=3.21, p<0.01).

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

42


Table 24: Contrasts showing treatment effects on behavioural intentions (equal variances assumed) Value of

Focus

Contrast

Std. Error

Contrast

A

1

‘simple’ vs. control

Overall

B

1

‘extra’ vs. control

Overall

C

1

average vs. control

Overall

T

P-value (1-

Df

tailed)

.34

.16

2.14

524

.02

.50

.16

3.21

524

.00

.42

.14

3.11

524

.00

Analysis of separate items Since there is a very low co-creation treatment effect on the construct ‘behavioural intentions’, the contrast scores on the separate items are not discussed in detail. The contrast results do show that the item ‘positive word-of-mouth’ is most likely to be affected by co-creation. This item shows a positive difference of 0.52 point when comparing all co-creation cells to the control cells (contrast C: t-value=3.74, p<0.01) H9:

4.4

Consumers have more favorable behavioural intentions toward products that are co-created than toward products that are not co-created (PARTLY SUPPORTED)

Mediators of product and brand evaluation

Overall evaluations might be moderated by differences between consumers’ current product use and product category involvement, and brand use and brand familiarity. Correlation analysis shows that indeed respondents who are more involved with the product category and/or use the product type more often, are more positive in their product evaluation (product use: Pearson’s r=0.27, p<0.05; product involvement: Pearson’s r=0.38, p<0.05). The extent to which respondents are positive about in their brand evaluations, is most strongly correlated to their level of brand familiarity (Pearson’s r=0.33, p<0.05), and their level of product involvement (Pearson’s r=0.32, p<0.05). This shows that consumers’ perceptions are influenced by their level of product involvement, product/brand usage, and brand familiarity. Table 25: Correlation coefficients for mediators on product and brand evaluation

Product usage**

Product involvement

Brand usage**

Brand familiarity

Overall Product evaluation

Pearson’s r*

.27

.38

.15

.08

Overall Brand evaluation

Pearson’s r*

.09

.32

.17

.33

N

N=530

N=264

N=530

N=530

*only displayed is significant at a=0.05 ** reversed score

H10:

Higher involvement, more frequent usage, and higher familiarity with products/brands leads to more positive overall evaluations (ACCEPTED)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

43


4.5

Brand effects

In the factorial ANOVA results that were discussed in the previous sections, it already becomes clear that neither of the constructs show a significant interaction effect of brand*co-creation. This means that it cannot be proven that the co-creation effect is strengthened by the brand associations. So, co-creation probably has similar effects for familiar brands and unfamiliar brands. The following constructs do show a main effect of brand on overall outcomes of the constructs. On the following construct brand X was evaluated more positively than brand Y:  Sincere brand personality: F(1,534)=7.44, p<0.01, partial η2=0.01.  Brand relationship strength: F(1,534)=35.93, p<0.01, partial η2=0.06.  Brand partnership and trust: F(1,534)=52.46, p<0.01, partial η2=0.09.  Expected success: F(1,534)=5.84, p<0.01, partial η2=0.01 The type of brand did not significantly influence the outcomes of the following constructs:  Product evaluation: F(1,534)=2.73, p=0.1, partial η2 <.01.  Intention: (F(1,534)=0.48, p=0.49, partial η2<0.01  Willingness to pay: (F(1,534)=0.24, p=0.63, partial η2<0.01 H11:

4.6

There are stronger co-creation effects if the brand is unfamiliar (NOT SUPPORTED)

Partnership fit

To evaluate respondents attitude toward the co-creation collaboration, the construct ‘partnership fit’ is used. The items only are evaluated by the co-creation cells (cells 2,3,5 and 6, N=340). The respondents who evaluated the products from brand X are more positive on this aspect than respondents from brand Y cells. The main brand effect in the factorial ANOVA is F(1,353)=12.75, p<0.01, partial η2=0.04 (dependent variable: partnership fit, independent variable: brand). The overall mean scores (and SEM) on ‘partnership fit’ are therefore displayed per brand (Figure 13).

"I consider the collaboration between the brand and consumers....” (N=340) 7 6

5.6

5.1

5.5

5.3

5.6

5.3

5

5.3

5.0

4 3 2 1 Logical

Attractive Brand X

Suitable

Credible

Brand Y

Figure 13: Mean scores per cell on the construct co-creation partnership fit

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

44


Correlation analysis shows a positive correlation between partnership fit and overall evaluation. Respondents who are positive about the co-creation partnership, are also more positive about the brand (‘overall brand evaluation’: Pearson’s r= 0.48, p<0.01). Moreover, these respondents are also more positive about the product (‘overall product evaluation’: Pearson’s r=0.47, p<0.01) and have more positive behavioural intentions (Pearson r=0.44, p<0.01). H12: Partnership fit is positively related to overall perceptions and intentions (ACCEPTED)

4.7

Providing ‘proof’ in the co-creation message

In the previous sections the different co-creation ‘simple’ and co-creation ‘extra’ treatments were compared to the control cells. In this section it is analysed whether significant differences exist between the scores of the co-creation ‘simple’ and co-creation ‘extra’ treatments itself. This is done by means of contrasts, to detect overall effects and to look for effects on brand level. No significant results are detected on the constructs of brand personality, brand relationship, brand partner quality (and trust), product evaluation, and expected success. Further inspection is done on all separate construct items. This shows brand X is evaluated more positively on certain items in the co-creation ‘extra’ treatment (cell 3) compared to co-creation ‘simple’ (cell 2) treatment (Table 26). Significant higher results showed on sincere personality traits ‘authentic’ (contrast= 0.42, t-value= 1.98, p<0.05), ‘original’ (contrast=0.59, t-value=2.77, p<0.01) and ‘cheerful’ (contrast=0.39, tvalue=2.03, p<0.05). Also the brand partner quality aspect ‘accessible’ was evaluated more positively in the cocreation ‘extra’ cell compared to the co-creation ‘simple’ cell (contrast=0.44, t-value=2.36, p<0.05). Lastly, the product from the co-creation ‘extra’ cell was evaluated higher on the aspect of ‘uniqueness’ (contrast=0.38, tvalue=1.9, p<0.05). For brand Y, co-creation ‘extra’ scores did not differ from co-creation ‘simple’ on any of the items. Table 26: Items that score higher on co-creation ‘extra’ compared to co-creation ‘simple’ for brand X Mean scores cell 3- mean scores cell 2 (contrast)

Std. Error

T

df

P-value (1tailed)

Brand personality traits: Real/ authentic

.42

.21

1.99

165.86

.02

Original

.59

.22

2.77

150.20

.00

Cheerful

.39

.19

2.03

158.57

.02

.44

.19

2.36

167.59

.01

.38

.20

1.94

162.24

.03

Brand partner quality: Accessible Product evaluation: Uniqueness

H13: Providing additional ‘proof’ in the co-creation message positively influences overall perceptions and intentions (PARTIALLY CONFIRMED)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

45


4.8

Summary of the hypotheses outcomes

Table 27 provides a short summary of the results of the study, showing the hypotheses (H), the variables involved, the expected outcome (E), the observed outcome (O) and some additional notes. Table 27: Summary of the hypotheses’ expected (E) and observed (O) outcomes

H

Dependent variables

Independent variable

E

O

Notes (brand X)

H1

Sincere personality

Co-creation level (vs. no cocreation)

+

Yes

For brand X personality traits Items ‘small-town’,’real/authentic’,’original’ only significant with co-creation ‘extra’ compared to control cell

H2

Brand relationship strength

Co-creation (vs. no co-creation)

+

Yes

For brand X item ‘self-connection’ is only significant with co-creation ‘extra’ compared to control cell

H3

Brand partner quality

Co-creation (vs. no co-creation)

+

Yes

For brand X item ‘accessible’ is only significantly better at co-creation ‘extra’ compared to control cell.

H4

Brand partner quality

Sincere personality

+

Yes

H5

Brand partner quality

Brand relationship strength

+

Yes

H6

Product evaluation

Co-creation (vs. no co-creation)

+

Yes

H7

Expected success

Co-creation (vs. no co-creation)

+

Yes

H8

Willingness to pay

Co-creation (vs. no co-creation)

+

No

H9

Behavioural intentions

Co-creation (vs. no co-creation)

+

Partly

H10

Overall evaluations

Involvement

+

Yes

H11

Co-creation effect (interaction effect)

Brand/ product involvement, familiarity, use

-

No

H12

Overall perceptions

Partnership fit

+

Yes

H13

Overall perceptions

Co-creation level (‘simple’ versus ‘extra’)

+

Partly

Joyce van Dijk

The item ‘uniqueness’ yields only a sign. better result at co-creation ‘extra’ compared to control cells (excluding brand effect).

Only a main brand effect on: brand personality, brand relationship, brand partnership, expected success

Does show effects on the brand personality traits ‘real/authentic’, ‘original’, ‘cheerful’, brand partner quality aspect ‘accessible’ and product evaluation item ‘uniqueness’

MSc thesis ‘The effects of co-creation on brand and product perceptions’

46


Table 28 shows the effect sizes of the co-creation treatments on the different constructs. The rows are displayed in descending order by effect size. It shows that brand-related constructs are most strongly affected by co-creation, followed by product evaluations and behavioural intentions. This is in line Keller’s (1993) notion that brand actions and behaviour, in this case co-creation, affect brand associations. Table 28: Sizes of co-creation effects on the constructs

H

Construct

Co-creation effect size

H1

Sincere personality

partial η2= 0.06

H3

Brand partner quality

partial η2=0.05

H2

Brand relationship strength

partial η2=0.04

H6

Product evaluation

partial η2=0.02

H7

Expected success

partial η2=0.02

H9

Behavioural intentions

partial η2=0.01

H8

Willingness to pay

No sign. Effect

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

47


4.9

Additional findings

Interaction effects between co-creation and gender/ age It is tested whether co-creation affects product perceptions differently for men and women. Tests of betweensubjects show there is indeed an interaction effect (gender*co-creation): F(2, 534)=7.25, p<0.01, partial eta squared=0.03 (Table 29). Co-creation has a stronger positive effect for female respondents on the aspect of overall product evaluation. Women are also more positive in their overall product evaluation than men, as the main gender effect shows: F(1,534)=18, p<0.01, partial η2=0.03. It is expected that, because women are more positive about the product than men, women are also more strongly affected by the co-creation treatment. Because the product appeals to them more strongly, they are likely to be more enthousiastic about co-creating such as product themselves. This in turn can enhance co-creation effects on their product perceptions. The co-creation effect did not differ between men and women, for the aspect of overall brand evaluation. The interaction effect (gender*co-creation) is not significant: F(2,534)=0.15, p=0.86, partial η2 <0.01. However, there is a main gender effect showing that women are more positive in their overall brand evaluation than men, F(1,534)=11.5, p<0.01, partial η2=0.02. Table 29: Tests of between subjects showing interaction effect gender*co-creation Dependent Variable: overall product evaluation Source

Type III Sum

df

Mean Square

F

P-value

Partial η2

of Squares a

5

11.11

8.47

.00

.07

10748.50

1

10748.50

8197.84

.00

.94

Gender

23.61

1

23.61

18.01

.00

.03

Co-creation

14.36

2

7.18

5.48

.00

.02

Gender *co-creation

19.00

2

9.50

7.25

.00

.03

Error

700.15

534

1.31

Total

11563.06

540

755.69

539

Corrected Model Intercept

Corrected Total

55.54

a. R Squared = .07 (Adjusted R Squared = .07)

It is also tested whether co-creation affects respondents from different age categories differently in their overall evaluation of the product and the brand. Tests of between-subjects did not show a significant interaction effect (age*co-creation) on overall product evaluation: F(8,525)=1.10, p=0.36, partial η2=0.02. There is also no significant interaction effect (age*co-creation) on overall brand evaluation: F(8,525)=1.45, p=0.18, partial η2=0.02. This means that for all age categories, co-creation shows similar effects on overall evaluations.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

48


Co-creation attitude In this section the complete sample is used (N=848, cells are weighted). Since this section will no longer explore co-creation effects, the complete sample is reliable. It will be explored whether respondent characteristics such as innovativeness/opinion leadership, age, and gender influence co-creation attitude. Respondents’ general attitude toward co-creation will also be elaborated on. Correlation results from Table 30 shows that innovative and influential respondents -who score high on innovativeness and opinion leadership (Q20)- are more positive about the co-creation ‘partnership fit’ in the study. There is a medium effect with a positive correlation of Pearson’s r=0.33 (p<0.01) between these two aspects. These respondents are also more positive about co-creation in general (q22), with Pearson’s r=0.40 (p<0.01). Lastly, the more innovative and influential respondents are also more positive about the suitability of co-creation for the different products/services proposed in q23 (Pearson’s r=0.28, p<0.01). There is no correlation between age and scores on these same aspects of co-creation attitude. However, there are small gender effects showing that women are more positive than men about the cocreation partnership fit in this study (Pearson’s r=0.16, p<0.01), co-creation in general (Pearson’s r=0.18, p<0.01) and about the application of co-creation throughout different sectors (Pearson’s r=0.20, p<0.01). However it is expected that this gender effect is related to the overall more positive brand and product attitude throughout this study. Table 30: Correlation coefficients for personality and gender with co-creation attitude items

Attitude toward cocreation in general (q22) .401

Attitude toward suitability of co-creation for different products/services (q23) .279

Innovativeness and Opinion leadership

Pearson’s r*

Co-creation partnership fit .335

Gender (female)

Pearson’s r

.157

.180

.201

N=448

N=848

N=848

*only displayed if correlation is significant at a=0.05

Table 31 shows that men evaluate the product on average 0.54 point lower compared to women (t-value=6.47, p<0.01). Men also attribute lower scores to brand evaluation aspects than women (mean difference=0.53, t-value=-5.8, p<0.01). Gender is thus confounded with attitude. Table 31: Means scores of males compared to mean scores of females T

Df

P-value

Mean Difference

(1-tailed)

Std. Error Difference

Overall product evaluation

-6.470

846

.00

-.54

.08

Overall brand evaluation

-5.803

846

.00

-.53

.09

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

49


In response to q21 ‘What products or brands do you know that have been developed through cocreation?’, about 140 respondents (out of 848) commented or named products that they thought are cocreated with consumers. Only data from cell 1 (brand X, no co-creation) and cell 4 (brand Y, no co-creation) are used to further explore opinions and mean scores on the aspects of co-creation attitude (q22), and the suitability of cocreation for different sectors (q23). This way it is ensured that results are not influenced by the co-creation treatments (cell 2, 3, 5 and 6 are excluded). Figure 14 shows the mean scores (and SEM) from high to low, for the two control cells together. It shows that the respondents consider co-creation a positive development. To what extent do you agree with these statements? I think it is a good thing that companies co-create with consumers

5.7

I think co-creation can be applied to diverse product types

5.5

I think more companies should engage in co-creation

5.5

I think consumers can come up with ideas that companies would not think off

5.4

I expect that co-creation leads to products that better match my needs

5.4

I would participate in co-creation

5.1 1.0

2.0

3.0

4.0

5.0

6.0

7.0

Average scores cells 1&4 (N=400)

Figure 14: Mean scores on co-creation attitude statements (q22)

Figure 15 shows again that respondents are positive about co-creation between consumers and companies. They are especially positive about the use of co-creation to develop food products, games and entertainments, and health and social services.

To what extent do you consider the following products/services suitable for co-creation? Food products

5.8

Games and entertainment

5.6

Health and social services

5.4

Civil services (State)

5.3

Technological products

5.3

Products for garden and home (interior)

5.2

Personal care products

5.1

Clothing products

5.0

ICT or IT services

5.0

Cleaning products

4.9

Financial services

4.9

Pet products

4.9 1.0

2.0

3.0

4.0

5.0

6.0

7.0

Average scores cells 1&4 (N=400)

Figure 15: Mean scores on co-creation suitability per product type (q23)

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

50


V

Limitations

The findings of this study are a useful first step in exploring the indirect effects of co-creation on consumer perceptions. However, there are some limitations that should be taken into account before discussing the implications of the results. Firstly, the dimension of sincere brand personality was analysed in isolation from the other four personality dimensions proposed by Aaker (1997). As this study specifically focused on capturing the concept of authenticity, Aaker’s (1997) sincere personality dimension seemed quite appropriate. However, there are more current approaches to brand personality that offer a revision of the work of Aaker (1997). Criticism on Aaker’s personality scale follow three main arguments: the scale embraces other aspects besides brand personality, the scale does not allow analyses at the individual brand level, and the scale is not applicable across cultures (Geuens et al., 2009). For the purpose of getting a complete overview of brand personality, revised scales should be taken into account that approach all brand personality dimensions. It is also important to take into account that there is no established quantitative measure for ‘authenticity’, one of the focal themes of this study. This is mainly because authenticity is a multidimensional and complex concept, and there is no academic agreement on its interpretation (Beverland and Farrily, 2010). Most often an interpretive approach is used for which qualitative data is collected and analysed. This study used quantitative data analysis in order to make co-creation effects measureable and comparable across treatments. By using a predetermined set of items to measure the concept of authenticity, some meaningful interpretations of the concept might have been overlooked. Secondly, internal validity of this study was improved due to excluding data from the respondents who did not answer the control question correctly, from the analyses. It is not clear why these respondents had not interpreted the co-creation treatment correctly. In case the excluded group of respondents actually shows a certain systematic variation, it might affect external validity of this study. However, no strong indications were found that suggest this. Thirdly, the process of ‘co-creation’ can be applied for a wide set of purposes in value creation. In this study the term was used in quite a general sense: as a collaboration between consumers and a brand with the purpose of jointly developing a new product and working together as equal partners. This study might not have provided insights into the effects of single and more narrow approaches, such as co-creation in packaging design. In the latter case, the product itself could be developed by the firm, and consumer participation starts only at the final stages of product development.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

51


VI Conclusions and implications Consumers that have not been involved in the co-creation process, perceived brands and products differently based on the mere awareness that co-creation was applied. The results of this study herewith imply that cocreation changes the way a brand is experienced and the value it provides for consumers (Van Dijk 2011, 2011a). Knowing that brands collaborated with consumers in new product development, enhanced brand perceptions, relational aspects and brand partnership evaluations. Brands were considered more sincere when they collaborated with consumers, and sincerity is an important starting point for building, deepening and strengthening consumers’ relationships with the brand (Aaker, 1999, Aaker et al. 2004). The co-creation effects on sincere brand personality show that the measure is indeed sensitive to changes. Herewith Aaker’s (1996) doubts, as to whether brand personality reflects the dynamics of the market, are invalidated. Brand personalities can actually change over time. Judging by the effect sizes of the co-creation treatment, it showed that co-creation especially influences brand associations (Table 28, page 47). Evaluations with a focus on the product, showed to be less responsive to co-creation. These findings are in line with the notion that consumers make brand inferences based on the brand’s behaviour (Keller, 1993). Product inferences are probably more focused on the tangible outcome after the development process, and relative advantages of the product compared to existing products. There was no evidence to show co-creation affects established brands differently than it would unknown brands. However, results do show that the co-creation partnership was considered more suitable, logical, attractive, and credible for the established brand. This outcome is correlated to overall brand evaluations such as brand relationship and brand partner quality judgments. It implies that consumers’ attitude toward a brand influences how appropriate they consider co-creation to be. For unknown brands it might be more difficult to attain a perceived fit, as consumers have not yet developed a positive attitude toward, and a positive relationship with, these brands. It is interesting that, for the established brand, the scores on personality traits authenticity, originality, and cheerfulness, increased even more when additional proof was presented with the co-creation treatment. The established brand was also considered more accessible, when visual proof was provided. Even though this is a small effect in this study, it shows the added value of elaborating on the co-creation further than merely providing textual information. This is in accordance with literature that stresses consumers value proof and evidence to support the brand message (Van Dijk, 2011). Compared to Fuchs and Schreier’s (2011), the current study has greater external validity due to its between-subjects design. In addition to Fuchs and Schreier’s (2011) results for fictitious brands, the current study uncovered positive co-creation effects on consumer perceptions of a well-known brand. Furthermore, in line with Fuchs and Schreier’s (2011), the current study showed that a product is evaluated more positively when it is presented as ‘co-created with consumers’. It is considered more attractive, innovative, unique and better suited to needs, compared to the same product that is presented as non co-created. This implies that product evaluations are influenced by associations and beliefs, besides purely product attributes and quality. Behavioural intentions are also strengthened by co-creation, but results did not show a strong effect. However, it is known that especially co-creation participants foster word-of-mouth, as they talk about the cocreation in online and offline conversations (Bilgram et al., 2011, Piller & Ihl., 2009). It is expected that this word-of-mouth does raise curiosity of consumers from the periphery and encourages them to act.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

52


The findings in this study provided strong evidence in favor of incorporating co-creation as an element in marketing and branding strategies. However, it is noted that the main purposes of co-creation is creating more innovative and better products, and empowering consumers in value creating processes. Literature argues that these main purposes should be the key focus for companies, as authentic and sincere behaviour is considered very important by todayâ&#x20AC;&#x2122;s critical consumers. Once co-creation is incorporated in a company, the enduring consequences of marketing this fact to the mass of consumers comes into play. Brands who engage in authentic collaboration such as co-creation, are in turn valued higher by consumers. It will be challenging to find the most effective way of communicating co-creation to the mass target group of consumers. Since the concept is relatively new, it might be difficult for consumers to fully understand what co-creation comprises. In communication to consumers, it is probably useful to underline the notion of a purposive collaboration between consumers and companies in which they systematically exchange ideas and integrate resources. By explaining how and why co-creation occurs, it becomes easier for consumers to differentiate it from more narrow approaches to consumer involvement, such as polls and idea contests.

Joyce van Dijk

MSc thesis â&#x20AC;&#x2DC;The effects of co-creation on brand and product perceptionsâ&#x20AC;&#x2122;

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VII Future research Future research is needed to explore what factors influence consumer attitudes and behavioural intentions toward co-created products. What do consumers find interesting about co-creation and what stimulates them to act? These aspects are probably best explored by means of qualitative research, to find out more about consumer beliefs, expectations, and interpretations. Longitudinal studies can provide more insights into the long-term effects of co-creation on consumer perceptions. For instance, it could evaluate how consumers perceive a brand that provides claims of cocreation but no actual proof, compared to a brand that shares a lot of information about the partnership and offers room for participation. The author believes that consumers show an initial response to co-creative brands, but that this response is influenced by the brand’s behaviour over time. Exploring these interaction effects can help identify the most effective ways for brands to behave in -and communicate about- co-creation practices. It is also interesting to investigate what will happen to consumers’ evaluations when many firms start engaging in co-creation practices. As literature shows, this is an upcoming development. When more and more companies engage in co-creation it might influence people’s level of interest or attention, or the co-creation effects might even wear out. Future research is needed to explore consumers’ perceived co-creation partnership fit (between brands and consumers) across sectors and industries. As this study showed, positive product and brand perceptions are moderated by perceived partnership fit. This perceived fit depends upon how appropriate the collaboration is considered to be and this is likely to differ in accordance to the sector. For instance, a cocreation partnership in a highly technical sector is probably considered more suitable when technically advanced lead-users are involved, instead of average consumers.

Joyce van Dijk

MSc thesis ‘The effects of co-creation on brand and product perceptions’

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Appendices (available on request)

Appendix I:

Consumer roles in product development

Appendix II:

Brand associations

Appendix III:

Brand personality dimensions and traits

Appendix IV:

Measure development

Appendix V:

Insites NV and sponsorship

Appendix VI:

Pilot survey results

Appendix VII:

Field work overview

Appendix VIII:

Differences included vs. excluded respondents

Appendix IX:

Weighting of the selected sample

Appendix X:

Weight factors on variable ''NatRep"

Appendix XI:

Construct reliability and factor loadings

Appendix XII:

Normality checks

Appendix XIII:

Willingness to pay per product

Joyce van Dijk

MSc thesis â&#x20AC;&#x2DC;The effects of co-creation on brand and product perceptionsâ&#x20AC;&#x2122;

59


MSc thesis: The effects of co-creation on consumers' brand and product perceptions  

Master thesis on the effects of (claiming) co-creation on consumers'brand and product perceptions

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