Search

Through consumer participation in the value creation process, firms can potentially offer enhanced value propositions from which consumers can extract greater value (e.g., customized services and products). Co-creation of value is a significant part of current market exchanges as consumers now participate in the process of defining and creating value by interacting with companies to augment the overall value derived from the consumption experience. While extant research discusses the new service-dominant logic and how corporations can foster co-creation, little has been done to develop measures for its conceptualization within the context of consumer product/service experiences. This study contributes to the literature by developing a new scale for measuring value co-creation. Prahalad and Ramaswamy (2004a) posit value co-creation as the new frontier of competitive advantage where connected, educated, and vocal consumers actively participate in customized design and/or delivery options. They state, "the meaning of value and the process of value creation are rapidly shifting from a product- and firmcentric view to personalized consumer experiences … the interaction between the firm and the consumer is becoming the locus of value creation and value extraction" (Prahalad and Ramaswamy 2004b, p. 5). Thus, the traditional nexus of value creation has shifted from that of the corporation imbuing their offering with value, which consumers then consume (Ramirez 1999), to encompass both the consumer and the corporation. Prahalad and Ramaswamy (2004a) propose a four-dimensional conceptualization of value co-creation that reflects the components needed to add value to a product or service experience. Their model comprises of four components -- Dialogue, Access, Risk Assessment, and Transparency (DART). To date, psychometrically valid scales for assessing value co-creation have yet to be published in the literature. Our objective in this research is to address this gap in co-creation research by employing the DART model as a conceptual foundation for developing and testing of a valid scale for value co-creation. Following various noted scale development procedures (Gerbing and Anderson 1988; Churchill 1979; DeVellis 1991; Ping 2004), a multidimensional scale was developed and validated to measure consumer co-creation of value. Our scale development followed the traditional three-step process. In the first step, we developed fifty items, submitted them for content and face validity checks, and in the process eliminated 13 of these items. In the second step, we focused on measure purification and model development through administering the 37-item scale to 327 undergraduate business students. After performing several factor analyses, we eliminated 14 items from the scale, and we subjected the remaining 23 items to a confirmatory factor analysis using AMOS 18 to purify a good fitting measurement model. After eliminating each item, we reran the analysis. A four-factor model specified to represent the four correlated factors using maximum likelihood extraction yielded an acceptable fitting model, chi-square = 543.6, df = 224 with all items loading significantly on their respective factors. The third step involved the validation of the measurement model and its reliability and construct validity. Based on our literature review and theory we tested two hypotheses: H1: Shared responsibility is positively related to co-creation of value (DART). H2: Co-creation of value (DART) is positively related to loyalty toward the provider. We administered the DART scale to 269 undergraduate students who also answered questions on service loyalty and shared responsibility. A CFA was performed with the four factors found in Study 1, chi-square = 522.1, df = 224. All items, except for one risk-assessment item .49, loaded significantly on their respective factors providing evidence for convergent validity. The model fit was acceptable with NNFI = 0.915, CFI = 0.931 and RMSEA = 0.07 and all four constructs had acceptable calculated construct reliabilities (0.83-0.84) and AVE above .50, however the AVE was slightly lower than in study 1. Again, the square of the phi coefficient for all four factors was compared to AVE and all of them were lower further suggesting discriminant validity. The structural equation model's path coefficients are used to evaluate the hypotheses. The data and structural equation model supports our first hypothesis but only partially supports our second hypothesis. In addition, we provide preliminary evidence of nomological validity by illustrating that our co-creation constructs possess distinct antecedent causes, consequential effects, or modifying conditions, and quantitative differences (Iacobucci, Ostrom, and Grayson 1995). The DART scale provides an important first step in operationalizing the assessment of value co-creation as a business practice. The analysis supports the structural veracity of the measure but also suggests that additional exploration is necessary to fully understand the cause and effect relationships associated with value co-creation processes. Specifically, the current research does not support that co-creation has a strong and positive effect on customer loyalty. This result may reflect limitations related to the current research, or may simply suggest that further study is needed to truly understand the implications of the constructs. Alternatively, co-creation may create self-serving biases similar to those proposed by Bandapui and Leone (2003) in relation to high customer participation. Specifically, customers who are very involved in co-creation may differentially attribute greater responsibility for success to their involvement in the process and, in turn, devalue the relationship with a specific provider. Clearly, such theoretical relationships deserve greater attention and study. Future research suggestions and managerial implications are discussed. References are available upon request. [ABSTRACT FROM AUTHOR]