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The OCR Glossary

Brand Co-Creation Model

Majken Schultz & Mary Jo Hatch

Co-creation is a relatively new concept emerging simultaneously in multiple fields including branding, community, and innovation studies. Co-creation arises in the mutual relationships organizations and their stakeholders form when brand is engaged. Co-creation can involve a multiplicity of stakeholders, such as nongovernmental organizations, business partners, and consumers, but is most often defined in relation to consumers, where it is seen as a new source of value creation. Value is created when consumers move from being passive receivers to active co-creators of the brand. Outcomes of co-creation range from participation in reconstructing brand meaning to collaboration on new product and service innovations.

Co-creation has been facilitated by the spread of digital communication, which has encouraged brand co-creation by enabling companies to reach a broader range of consumers. Similarly, it enables consumers to engage in conversations with one another, which can also affect brand meaning and value. Co-creation challenges well-established brand management principles that emphasize taking corporate initiative to shape brands, and thus some regard it as a new brand logic. The rest of this entry describes the four “building blocks” that must be met for co-creation to succeed, and provides an example of a successful brand co-creation.

The Conditions for Co-Creation

C. K. Prahalad and Venkatram Ramaswamy outlined several conditions that must be met for co-creation to succeed. They called these conditions the “building blocks” of co-creation. The first building block is dialogue, as co-creation requires interactivity and a deep connection between companies and consumers. Dialogue becomes increasingly challenging as the number of consumers wanting to engage in co-creation increases. The second building block is the access to companies that allows consumers to engage in co-creation. Access requires a willingness on the part of companies to make new technologies and insights available for co-creation activities. As a consequence of the second building block, the third is transparency, which underpins co-creation when both companies and consumers agree to share ideas and competencies. Transparency may challenge attitudes toward protecting the intellectual property rights existing in many companies today. Finally, co-creation creates risks for both companies and consumers. These risks have been elaborated by Mary Jo Hatch and Majken Schultz to show that while co-creation assumes symmetrical engagement by companies and consumers, this may not always be the case. In some situations, companies are more eager to engage in co-creation and thus experience disappointment when consumers do not return their enthusiasm or misuse the information the company entrusted to them. In other situations, consumers may feel exploited when they feel that companies have taken advantage of their ideas and contributions without acknowledging the value generated by co-creation.

An Example

An example of successful co-creation between a company and its consumers is provided by LEGO Group. In the late 1990s, the company embarked on its first co-creation effort in relation to the launch of its robotics products branded as LEGO Mindstorms. Co-creation began when the company realized that it had benefited more from inviting eager users to codevelop the robotics products than by preventing their access to the new digital platforms. Moreover, the company learned that adult fans of LEGO had organized themselves into online brand communities that were serving as a platform for networking that the LEGO Group could use to recruit their participation in co-creation activities. Since then, LEGO Group has initiated a variety of activities and programs that illustrate different forms of co-creation. First, LEGO has engaged highly dedicated individuals in co-creation by inviting them to its headquarters, where they participate in product innovations in collaboration with employees and also explore new uses of the brand. This has been organized through the LEGO Ambassador program. Second, the company has used crowdsourcing to facilitate co-creation by inviting consumers to engage in online activities, suggesting and selecting new ideas for building sets and play themes. This has been enabled via the LEGO Cuusoo program. Finally, employees and consumers co-create during off-line events, where they meet and exchange ideas and opinions about the LEGO brand. These may be organized by the company, such as LEGO World, or by LEGO fans themselves, such as Brick Fest. The co-creation activities are first developed with the adult fans of LEGO, but the ideas for new products and brand developments that follow from co-creation are often relevant to all consumers of LEGO, just as consumers of all ages participate in the LEGO events.


Co-creation is a new form of brand-related collaboration that occurs between companies and consumers and is facilitated by the spread of digital communication. It can lead to value creation for both parties, provided conditions of dialogue, access, and transparency are met.

Co-creation challenges classic brand management in that managers can no longer sustain belief in their ability to control either the process or the outcomes of branding. Instead, they must learn to trust the relationship with their consumers. By the same token, consumers who engage in brand co-creation with companies face coresponsibility for the development of brand meaning. The example of the LEGO Group suggests that the biggest challenge managers face when engaging in co-creation is to learn not to take charge of the full process but listen to the ideas and criticism consumers offer and let the co-creation dialogue develop without overmanaging the processes involved.

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Hatch, M. J., & Schultz, M. (2008). Taking brand initiative: How corporations can align strategy, culture, and identity through corporate branding. San Francisco, CA: John Wiley & Sons.

Hatch, M. J., & Schultz, M. (2010). Toward a theory of brand co-creation with implications for brand governance. Journal of Brand Management, 17(8), 590–604.

Ind, N., Iglesias, O., & Schultz, M. (2013). Building brands together: Emergence and outcome of co-creation. California Management Review, 55(3), 5–29.

Merz, M. A., He, Y., & Vargo, S. L. (2009). The evolving brand logic: A service dominant logic perspective. Journal of the Academy of Marketing Science, 37, 328–344.

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Prahalad, C. K., & Ramaswamy, V. (2004). The future of competition: Co-creating unique value with customers. Boston: Harvard Business School Press.

See Also

Brand Communities; Engagement; Organizational and Corporate Image; Organizational Identity; Stakeholder Theory; Strategic Alignment

See Also

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