International Journal of Sales & Marketing

Management Research and Development (IJSMMRD)

ISSN(P): 2249-6939; ISSN(E): 2249-8044
Vol. 4, Issue 6, Dec 2014, 49-54
TJPRC Pvt. Ltd.

SOCIAL NETWORKS AND CO-CREATION

S. MURUGAN1 & P. S. NAGARAJAN2
1
2

Research Scholar, Alagappa Institute of Management, Alagappa University, Karaikudi, Tamil Nadu, India

Assistant Professor, Alagappa Institute of Management, Alagappa University, Karaikudi, Tamil Nadu, India

ABSTRACT
This article analyzes the advent of Social Media and the phenomenon of co-creation. Companies can no longer
afford to ignore the power of the social networks and view their customers as passive recipients of products and services,
rather leverage these participatory platforms to engage with their customers, understand their pain points, use feedback and
co-create products and services.
Organizations are trying to adopt co-creation strategies as part of their product development process. This strategy
allows them to view their markets as open innovation platforms that can be leveraged by the organization with its partners,
customers and experts, to share, leverage each others skills and knowledge, and collaborate to co-create new product or
service offerings. Social Media would play a vital role in the co-creation process. In this era of millennials, social platforms
help in connecting the brand with its fans and customers. It acts as a key listening platform that provides insight in to
customer conversations, likes and dislikes and the trends that are shaping their particular industries.

KEYWORDS: Co-Creation, Social Networks, Web 2.0, Millennial, Open Innovation

INTRODUCTION
Since the dawn of the new millennium, the key disruptive technologies Mobile and Social Media has changed the
way we live and work. The emergence of Web 2.0 technologies redefined the way commerce is conducted. Social media,
an evolution based on Web 2.0 technologies has led to the creation of a new platform through which businesses can reach
out to their customers and engage them directly. The continued growth of social networks has resulted in a paradigm shift
in marketing. While it took 38 years for the Radio to get its first 50+ Million users, it took just a year for Facebook to
achieve the same.
Companies can no longer afford to ignore the power of the social networks and view their customers as passive
recipients of products and services, rather leverage these participatory platforms to engage with their customers, understand
their pain points, use feedback and co-create products and services. The development of open source software like Linux,
user generated content in YouTube, blogs by activists and citizen journalists, Wikipedia are ample examples of
co-creation.
Social networks also offer the possibility of collaborative co-creation. With the advancements in connectivity,
it allows the customer to engage in a collaborative co-creation with members of ones social network.

WHAT IS CO-CREATION?
Co-creation can be simply defined as the participation by a customer with the company to shape or refine the
product or service offering at any point during the design to production life cycle. This involves changing the way the
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S. Murugan & P. S. Nagarajan

company interacts with its customers, other stakeholders and leverage the collective creative power to transform its
economics. Doug William, Analyst and Co-creation expert with Forrester Research defines co-creation as the act of
involving consumers directly, and in some cases repeatedly, in the production creation or innovation process. Companies
engage with customers on initial product concepts and ideas and they use consumers as a resource throughout the product
development life cycle.
Venkat Ramaswamy, Professor Marketing with Ross School of Business, University of Michigan is credited
with coining the term co-creation along with Professor C.K. Prahalad. The term co-creation was introduced by them in a
Harvard Business Review article way back in 2000. They defined co-creation as an active and social process based on
collaboration between producers and users, initiated by the firm to generate value for customers. Professor Venkat
Ramaswamy is also the co-author of the book The Power of Co-creation (2010) with Francis Gouillart. According to
him, co-creation goes beyond listening and feedback. It is about redefining the process and how organizations engage with
customers, employees, suppliers, partners and stakeholders by bringing them in to the value creation process and
engaging them in it.
Professor Venkat Ramaswamy adds by saying that, harnessing the creativity of customers and employees is the
heart of co-creation. Co-creation is much larger than just engagement. It is about bringing together different ways in which
people can contribute. It is about human experience, and I believe it has the power to change our future by creating a better
world environment around us, which is badly needed in these times.
While organizations turn in to innovation to achieve a sustainable growth, the traditional process of innovation is
a sequential one. While the process takes a significant amount of time, mostly internal to the organization or with a small
set of partners, customers are most likely involved at its fag end as mere validators. Whereas, co-creation turns a sequential
process to a parallel one and engages customers directly at the start of the innovation process to gain creative ideas faster.
When this happens online through social networks, it enables the organization to reach out to large number of customers or
stakeholders across geographies in a short period of time. Since this process starts with inputs from the customers,
the chances of failure is relatively low.

GROWTH OF SOCIAL NETWORKS

In 2014, it is estimated that there will be around 1.82 billion social network users around the globe, up from 1.47
billion in 2012. As far as the social network penetration rate in 2013, North America was ranked first with a social media
penetration rate of 56 percent, followed by Western Europe with 44 percent. The global average penetration rate was 26
percent. In 2014, 67 percent of US Americans have a social network profile, representing a 20 percent growth compared to
2010.
In January 2014, it is estimated that Facebook has over 1.18 billion active users, Twitter has over 232 million
active users, Google+ has over 300 million active users, and YouTube has over a billion active users.
According to the report Social Media in India 2013 by the Internet and Mobile Association Of India (IAMAI)
and IMRB released in October 2013, the number of social media users in Urban India would reach 86 million in October
2013, and 91 million by the end of 2013. Social media users in urban India are expected to grow by 19% between June and
December 2013. The report further found that 19.8 million users use mobile phones to access social media platforms in
urban India. The report elaborated that Facebook is the leading website accessed by 96% of all social media users and it is
Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

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Social Networks and Co-Creation

most used to connect with friends, publishing content and searching contacts. The survey was conducted across 35 cities in
India and the report said that social networking through mobile phones is widely observed with 19.8 million users
accessing the websites on mobiles. "With mobile penetrations reaching very high levels and an increasing number of
individuals owning smartphones that allow Internet access, social networking is rapidly penetrating the internet user base
across length and breadth of India," the report said.

SOCIAL NETWORKS AND CO-CREATION GLOBAL EXAMPLES

In his book, Professor Venkat Ramaswamy highlights several successful co-creation initiatives that include
Starbucks MyStarbucksidea.com that was launched to tap in to customers ideas. This website has been active for over 6
years now and it encourages Starbucks customers to share ideas for products, enhancing customer experience and so on.
Customers can share their ideas, vote, view the ideas listed by others and discuss ideas submitted with Starbucks
employees who are the Idea Partners. The company also lists the ideas in action and provides the status in their website
and also lists out the customers who are most active in submitting ideas through a leaderboard. Over 150,000 ideas were
submitted in a 5 year period and out of this over 277+ ideas were selected and implemented. These innovations have
enhanced the Starbucks experience and allowed their customers to play a vital role through open collaboration.
Another example cited by Professor Ramaswamy is the Danish toy maker LEGO group that was facing
bankruptcy in 2004. The toy makers sales dropped sharply by 30% in 2003. While its customers were the key to the
creation and success of its products, they were never in the driving seat of its strategy. It all started with LEGO Factory,
where customers can download LEGOs Digital Design Software and design and build any product they can imagine.
They can upload the design to the LEGO Factory gallery and can get them produced for a fee. LEGO chooses few popular
customer designs and manufacture them. LEGO has also created an online community called My LEGO, with over 400
Million + users worldwide. While kids form the core of this online community, significant number of adult super users
does participate in this community and share and discuss product ideas. LEGOs strategy is a combination of traditional
building kits and customized products designed by customers with the help of online tools and community based
co-creation. Today, LEGO remains the most popular toy maker of our times empowering their customers and their dreams
in to reality.
In 2010, Vitamin Water was launching a new flavor and gave its users a chance to develop and name it. Over the
summer, Facebook fans were able to comment on different flavors. The top 10 most talked about flavors were put to vote
in September 2010. Though the fans were not creating flavors from scratch, they could influence the top 10 flavors and rate
them.
Once the flavor was selected, the fans were asked to design the packaging including the look and feel and the
colors used in the label. Fans could collaborate with two other Facebook friends to develop the packaging and the final
winners were chosen by a panel. In fact, Facebook fans were also asked to name the product and the team that created the
winning name was awarded USD 5000. This is another good example of how a business can leverage its fans to co-create a
product and get them involved in the process. The one million fans of Vitamin Water Facebook page would have felt a real
involvement in the product development and a potential one million customers when the product got launched.

SOCIAL NETWORKS AND CO-CREATION INDIAN EXAMPLES

In India as well there are many case studies of successful co-creation campaigns on social media. In 2012,
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S. Murugan & P. S. Nagarajan

Tanishq, a Tata group company launched its first co-creation activity My Expression. The participants were requested to
submit an idea online at http://mia.tanishq.co.in/myexpression/ for Tanishqs Mia brand the working womens line of
products. The top 10 designs were chosen after an online poll and the winners received INR 100,000 as an award and the
selected idea would be used in the next collection of Mia. In January 2014, Tanishq completed My Expression 2 and
chose the winners after 34000 votes were cast to choose from 100 shortlisted ideas. Tanishq created an interactive platform
to gather ideas, insights on their jewelry collection and engage with customers, designers and the like to co-create.
Another example of community-cocreation in India was HULs approach to rejuvenate its Sunsilk brand of
shampoos. In his book, Professor Ramaswamy quotes this example. Sunsilk is a leading hair care brand of Unilever Group
targeted at women. Though one of the leading shampoo brands in India, Sunsilk was perceived as Moms brand and
HUL wanted to target the 17 to 24 year olds and keep the brand relevant to them, as India is a huge market with significant
youth population. In 2006, HUL launched an online community called Sunsilk Gang of Girls (GoG) in India to breathe
new life in to the brand. The online community was launched to allow its target audience to express themselves. The social
networking site offered its users access to local and global experts to address hair care needs through its content, blogs and
live chat room. The site includes rich content of hair care and fashion and HUL enabled interactions between GoG
members, HUL, HUL partners and a network of hair care professionals and beauticians. And six months since the launch,
the membership of Sunsilk Gang of Girls online community grew to 614,000 in over 18 months. In 2009, Unilever
extended this and invited 7 hair care professionals to co-create offerings that addressed the various hair care concerns and
connecting these offerings with the global Sunsilk user community. HUL rolled out the products as the Sunsilk
Co-creations line. The co-creation drive spread from India to Asia and to the world finally.
In India, the Quick Service Restaurant (QSR) industry is on a roll. Caf Coffee Day (CCD) is well known brand
in the QSR industry. CCD is another brand in India that leverages social media to co-create offerings. CCD has a good
following in social media with over 4 Million fans in Facebook. CCD believes that co-creation is critical for youth-centric
brands and it provides the necessary sparks to ignite a conversation in social media and moderate only when they need to.
CCDs music playlist and most importantly the menu has been co-created with CCDs fans. In an interview with Business
Standard Magazine Mr. K Ramakrishnan, President - Marketing, Cafe Coffee Day highlighted that CCD changed the food
menu based on the feedback it received in social media. By brainstorming on ideas that were generated based on inputs
from social media, product concepts were created and voted in social media. CCD invites some of their social media fans
to test their offerings offline and then share their views online. The product gets formalized and launched in the cafes
subsequently. CCD has integrated social media and co-creation fully in to the product development process.

CONCLUSIONS
Organizations are trying to adopt co-creation strategies as part of their product development process. This strategy
allows them to view their markets as open innovation platforms that can be leveraged by the organization with its partners,
customers and experts, to share, leverage each others skills and knowledge, and collaborate to co-create new product or
service offerings. This approach differs from the passive markets of the past. While this approach is about jointly creating
products or services, it also provides value to the customers by providing personalized experiences to them.
Social Media would play a vital role in the co-creation process. In this era of millennials, social platforms help in
connecting the brand with its fans and customers. It acts as a key listening platform that provides insight in to customer
conversations, likes and dislikes and the trends that are shaping their particular industries. The social platform is a key
Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

Social Networks and Co-Creation

53

enabler in the co-creation process and would allow the brands to leverage these platforms as part of their core marketing
strategy to listen, use the customer feedback to co-create products and services.

REFERENCES
1.

Ramaswamy, Venkat & Gouillart, Francis (2010) The Power of Co-creation: Free Press

2.

Benkler, Yochai (2007) The Wealth of Networks: How Social Production Transforms Markets and Freedom :
Yale University Press

3.

Co-Creation the better-together paradigm By Katja Pantzar in Blue Wings March 2013

4.

http://www.freshminds.net/2010/01/case-study-vitamin-waters-newest-flavour-created-by-facebook-fans/

5.

http://francisgouillart.com/wordpress/?p=720

6.

http://www.mediabistro.com/alltwitter/social-media-statistics-2014_b57746

7.

http://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/

8.

http://wearesocial.net/who/

9.

http://timesofindia.indiatimes.com/tech/social/India-may-have-91-million-social-media-users-by-year-endReport/articleshow/23906601.cms

10. http://www.digitalsparkmarketing.com/innovation/my-starbucks-idea/
11. http://mystarbucksidea.force.com/
12. http://en.wikipedia.org/wiki/Sunsilk
13. http://yannigroth.com/2011/11/14/one-company-different-platforms-part-5-unilever-manages-co-creation-for-itsvarious-brands/
14. http://www.business-standard.com/article/management/to-be-a-leader-you-have-to-be-ready-to-support-failure-kramakrishnan-113012800039_1.html
15. http://en.wikipedia.org/wiki/Co-creation

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