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Pricing co-created value: an integrative framework and research agenda

Author

Listed:
  • Stuart Read

    (Willamette University)

  • Stefan Michel

    (Chemin de Bellerive 23, P.O. Box 915)

  • Jan H. Schumann

    (Wirtschaftswissenschaftliche Fakultät)

  • Kumar Rakesh Ranjan

    (University of Queensland)

Abstract

Two-sided markets, free pricing, and offerings with network externalities represent exciting variations in the market. And while all embody theoretical advancements in marketing describing situations where firms and customers collaborate in the co-creation of value, heretofore they have received limited exploration in fundamental models of pricing. Seeking to fill this gap, we delve into the co-creation literature in search of conceptual building blocks. From a detailed review, we identify six distinct mechanisms underlying value created by customers but absent from existing pricing models. In the course of their co-creative interactions with firms, customers can provide knowledge, innovation, attention, effort, quality and additional revenue to firms. We proceed to construct a model of price determination which incorporates elements of co-creative value from customers and elaborate real world applications of the model. The conceptual and practical implications of incorporating co-creation into pricing are far-reaching and we offer directions for both audiences.

Suggested Citation

  • Stuart Read & Stefan Michel & Jan H. Schumann & Kumar Rakesh Ranjan, 2019. "Pricing co-created value: an integrative framework and research agenda," AMS Review, Springer;Academy of Marketing Science, vol. 9(3), pages 155-183, December.
    • Handle: RePEc:spr:amsrev:v:9:y:2019:i:3:d:10.1007_s13162-019-00144-w
    DOI: 10.1007/s13162-019-00144-w
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