Measurement of Value Co-Creation: A Formative Approach

Abstract

The concept of value co-creation has attracted a lot of research in the last ten years. But the understanding of the construct is still at best equivocal, resulting in a slow progression of the field. Using evidences from the review of extant literature and an exploratory study, we conceptualize value co-creation. Subsequently, using data from two cross-sectional large sample surveys, we measure and validate an index for value co-creation.We illustrate that value co-creation is theoretically rooted in the service dominant logic and has two sub-dimensions, namely, co-production and value-in-use (ViU). Each of these sub-dimensions has three distinct facets. While co-production is comprised of interaction, ideas (knowledge sharing), and equity; value-in-use is constituted by experience, personalization, and relationship. Thus, value co-creation has been conceptualized as a third-order formative construct, for the measurement of which we develop a multi-item index. This study contributes to extant research in service dominant logic by opening up new grounds for quantitative studies related to value co-creation. There are three distinct contributions of this study. First, integrating evidence from extant literature and qualitative data, we expose the two dimensions of VCC, co-production and ViU, and describe each as composed of three distinct facets. Second, we operationalize these dimensions and facets with measures that present both face validity and construct validity. And third, we illustrate the predictive validity of our measurement index in an investigation with consumer satisfaction.