Value co-creation with customers through design toolkits: the importance of preference fit and psychological ownership

The information technologies increasingly enable companies to set up websites for customers to design and purchase their own individualized products. Although customer co-design offer benefits for both suppliers and customers, how to manage the co-design process, especially the central interface features of design toolkit have emerged as a contentious issue among researchers and practitioners. This paper focuses on the effects of both utilitarian and psychological customer-design product value (i.e., perceived preference fit and psychological ownership) on customers’ purchase decision. Based on the self-determination theory, we propose that the effectiveness of the value increment mechanisms is influenced by three leading toolkit characteristics – the reusability of the peer-generated design solutions, design autonomy, and peer feedback, which represent three important stages in the design process, i.e., idea generation, configuration, and outcome evaluation. Laboratory experiment will be carried out to test the hypotheses. This study attempts to extend the self-determination theory to the online co-design context and to explore the value of customer-designed product through psychological ownership. It also intends to suggest pragmatic strategies for companies to improve co-design process and promote their product sale.