CONCEPTUALIZING AND MEASURING VALUE CO-CREATION FOR THE BOTTOM OF THE PYRAMID MARKET IN INDIA

Abstract

The pioneering work on Service-Dominant (S-D) logic in 2004 by Steve Vargo and Bob Lusch acted as a catalyst for visualizing marketing from the service-oriented business logic. Otago Forum organized by David Ballantyne and Robert Aitken in 2005 popularized value co-creation as a new paradigm of marketing. Since then, various organizations and institutions have embraced the S-D logic to achieve the objectives of value co-creation. The publications by Nordic school provided initial guidelines to practice value co-creation. In the contemporary era, value co-creation is seen as an important business strategy to win competition and customers. The applicability of value co-creation for the development of the largest market of world, i.e. Bottom of the Pyramid (BOP) is supported by industry and academia. Several organizations have claimed various cases of using value co-creation processes into their business models. Yet, the understanding of the value co-creation phenomenon is a challenge. This raises a question of what is the meaning of value co-creation and how it should be understood. For this purpose, several definitions of value co-creation have been proposed by various scholars throughout the world. The focus areas of these studies are mainly on developed countries. The applicability of these definitions in the developing countries is limited due to various cultural and behavioral differences. Therefore, it is necessary to conceptualize the meaning of value co-creation for the emerging markets. Various studies in the literature explored the relevance of value co-creation in the BOP market development. But, how value co-creation shall be understood in this market is inconclusive. Further, there is a need to find out the drivers and impediments of value co-creation for the BOP market. The BOP market is significant for organizations in terms of huge cumulative purchasing power, abundant natural resources and large size. This segment is interesting for value co-creation practices due to the naïve perception of consumers- a prerequisite for co-creation of value. These reasons point out a need to find out the motivating factors of BOP customer willingness to participate in value co-creation. This literature gap is also addressed in this study. The accounts were generated from detailed in-depth interviews, focus group discussions with BOP consumers, practitioners, academics. Mixed method research approach was used to carry out this research. Initially, a systematic literature review was carried out that generated 27 iv elements conceptual model of value co-creation. Qualitative research approach was adopted to conceptualize the meaning of value co-creation for the BOP. Also, 27 factors of BOP customer willingness to participate in value co-creation have been identified using thematic content analysis on the detailed in-depth interviews. The enablers and barriers of value co-creation for the BOP market were also identified using mixed method research approach to facilitate corroboration of findings with the conventional markets. Based on the existing knowledge gaps, we propose a new theory and offer lawful propositions for future research that would advance the current knowledge on value co-creation for the BOP market. We conclude that value co-creation for the BOP market is defined as, ‘a continuous and interactive process where engagement between two or more than two entities, group or communities takes place due to their intent for need fulfilment and done within a synergistic servicescape. The servicescape is created by having a prolonged engagement with the beneficiary i.e. consumer and happen within the close vicinity of the consumer’. In addition, we have proposed five factors that can significantly influence the BOP customer willingness to participate in the value co-creation process. Finally, the present study fills major gaps existing in the field of value co-creation and BOP. The present study has applied grounded theory for theory development and Fuzzy AHP technique for prioritization of enablers and barriers in the implementation of value co-creation process.