Reducing Resource Expenditure in Value Co-Creation: A Path to Market Shaping

Abstract

Although market-shaping is typically initiated by firms, its success relies on the collective efforts of multiple market actors. Consumers play a crucial role in shaping markets, by actively engaging in activities beyond merely purchasing products. For example, in the case of ride-sharing services, early adopters actively advocated for their use, educated others on how to access them, and lobbied for regulatory changes that enabled the services to operate and scale in various markets. Through these actions, consumers helped to establish the new service offering and shape the market. Despite this significant role, there is a limited understanding of how firms can motivate consumers in practical terms. This study employs a discrete choice experiment to investigate how a firm can elicit market-shaping behaviours of consumers within the context of autonomous ride-sharing services. Identifying three distinct consumer segments with unique resource expenditure preferences in the value creation process, the study sheds light on the specific activities that drive market-shaping. While some consumers prefer reducing specific key resources, others navigate trade-offs across a broader range of resources. The findings emphasise the importance of tailored value propositions in motivating consumers to engage in behaviours that support successful market-shaping.