Executive Interviews: Interview with Roland T Rust on Co-Creation
March 2010 - By Dr. Nagendra V Chowdary

Roland T Rust
Distinguished University Professor and David Bruce Smith Chair in Marketing at the Robert H Smith School of Business at the University of Maryland,

• Professor, congratulations for being an accomplished academician in the field of marketing research; for being the founder and Executive Director of two research centers at Robert H Smith school of business; and other scholastic achievements. How has the discipline of marketing research changed over the last decade? Has it become highly sophisticated, with books like Buyology, bringing in the perspectives of neuroscience?
  Marketing research has becomemuch more focused on individual customers, because of available data. Where companies used to focus on brand value, now they focus on customer lifetime value. Instead of brand equity, the key concept is customer equity. Related to this, customer relationships, rather than transactions, are the focus. The key driving force behind all of this is information and communication technologies, which have advanced tremendously. You mention neuroscience. The application of neuroscience to marketing has advanced very quickly, because of new brain imaging technologies.

• Why is it that we still see many blockbuster products getting bombed? For instance Apple’s iPhone in India didn’t meet with the anticipated success. Was it the failure to read the consumers’ correctly or was it due to overconfidence?
  Why is it that we still see many blockbuster products getting bombed? For instance Apple’s iPhone in India didn’t meet with the anticipated success. Was it the failure to read the consumers’ correctly or was it due to overconfidence?

• Why is it that we still see many blockbuster products getting bombed? For instance Apple’s iPhone in India didn’t meet with the anticipated success. Was it the failure to read the consumers’ correctly or was it due to overconfidence?
  Why is it that we still see many blockbuster products getting bombed? For instance Apple’s iPhone in India didn’t meet with the anticipated success. Was it the failure to read the consumers’ correctly or was it due to overconfidence? links, which facilitate interaction. We see the same thing happening with collaborative research in business schools. For example, one paper of mine that I recently published needed some special expertise. So I contacted a professor in Belgium, who became a co-author on the paper. With the Internet, it did not matter at all that my co-authorwas fromBelgium. That wouldn’t have been true 15 years ago.

• What according to you is the difference between traditional system of value creation and co-creation as propounded by you? Can you give us few examples of those companies that have benefited from co-creating value?
  Value creation is static. The idea is to build a product, which may be either a physical good or a service, such that customers will find value in it. This typically involves marketing research on the front-end and mass selling on the back end. Co-creation is dynamic, rather than static. The idea is that give and take with the customer will be the service. For example, in the US there is a store called ‘Build-a-Bear.’ In that store children help assemble a personalized bear, making all sorts of decisions about the bear – the bear’s name, clothes, etc. This creates a much closer bond with the customer than just building a bear based on average consumer preferences and selling the same bear to everyone.

• How did the relationship between the customer and the company change over decades and what did this change mean for business practices?
  How did the relationship between the customer and the company change over decades and what did this change mean for business practices?

• What specific trends do you think are warranting the companies to look beyond the traditional value creation and embrace co-creation as the new competitive platform?
  It’s a competitive necessity. Embracing the relational co-creation viewpoint enables far more personalized service. Again, it is information and communications technology that is driving this.