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MIP
25,2

Customer community and

co-creation: a case study
Jennifer Rowley, Beata Kupiec-Teahan and Edward Leeming
Bangor Business School, University of Wales, Bangor, UK

136
Received December 2005
Revised November 2005,
December 2006
Accepted January 2007

Abstract
Purpose This paper aims to provide insights into the development and management of a customer
community, informing product innovation and engaging customers in co-creation of a consumption
experience.
Design/methodology/approach A review of the state of current knowledge about co-production,
co-creation and customer communities is followed by discussion of the case study methodology.
The case history of a leading player in the UK and international sportkiting market focuses on
product innovation and customer-community development. Discussion reflects in more detail on the
lessons from the case for application of the principles in practice.
Findings The case companys innovative product development strategy provides the catalyst for
co-creation of a customer experience. Its marketing actions extend beyond product development and
innovation to actively co-creating experiences with customers, fostering a sense of community among
users, facilitating communication within that community, acting on the feedback, and continuously
developing and maintaining the community relationship.
Research limitations/implications The companys marketing strategy can be summed up as
customer community leadership. This paradigm proposes a new role for businesses in sectors where
there is a potential to develop and engage communities. It provides a context for the effective
facilitation of customer knowledge management, within which marketing intelligence plays a
significant role. The findings offer scope for further research into the nature of this phenomenon and
its relevance to co-creation in other industry sectors, and into numerous aspects of the processes
and impacts associated with customer communities.
Originality/value The case contributes to the literature of co-creation, demonstrating how it has
been achieved through a marketing strategy and marketing mix in a particular customer community.
Keywords Customer relations, Innovation, Relationship marketing, Leadership
Paper type Case study

Marketing Intelligence & Planning

Vol. 25 No. 2, 2007
pp. 136-146
q Emerald Group Publishing Limited
0263-4503
DOI 10.1108/02634500710737924

Introduction
The increased complexity, globalization and knowledge-intensity of marketplaces
require all businesses to make better use of their technological, organizational and
marketing competences in order to survive. Contemporary organizations in highly
competitive and highly innovative markets must be able to build market share quickly,
by delivering fast, high quality, innovative solutions. The changing organisational
environment has driven interest in organisational learning and knowledge
management (Drucker, 1993; Prusak, 1997). Many studies have confirmed customer
knowledge as one of the most important knowledge bases for an organisation
(Bennett and Gabriel, 1999; Chase, 1997), and there is a considerable interest in the
potential of co-production and co-creation either individually or in community
contexts, to enhance innovation and business performance (Gibbert et al., 2002).
Focus on the engagement of customers in organizational learning, innovation and
knowledge processes heralds the dawn of a new paradigm of marketing intelligence in

which data and information are not simply gathered into databases and distilled to
inform management decision making, but rather marketing intelligence is embedded in
dynamic co-creation processes that involve customers as partners rather than subjects.
Through a case study analysis and critique of a leading manufacturer of kiteboarding equipment, this paper seeks to provide insights into the engagement and
management of a customer community, to inform product innovation and to engage
customers in co-creation of a sporting experience. The case contributes to the literature
of co-creation and specifically to the way in which communities can be enlisted in the
co-creation of experiences.
It begins with a literature review, outlining the state of current knowledge on
co-production and co-creation and on customer communities, followed by a description
of the case study methodology. A profile of the company, with particular reference to
its product development and community development follows leads to reflection in
detail on the contribution from this case. Finally, conclusions and recommendations
provide a summary of the issues. The concept of customer community leadership
is proposed, and agendas for further research identified.
Literature review
This section draws together current knowledge on two key themes: co-creation, or
co-production, and customer communities. Research on both of these themes fits
broadly within the paradigm or philosophy of relationship marketing. As the main
plank of a marketing strategy, relationship marketing aims to build long term,
mutually satisfying relations with customers, suppliers and distributors with the key
objective of earning and retaining their long-term preference, loyalty and business
(Foss and Stone, 2001; Peck et al., 1999; Buttle, 1996; Massey et al., 2001). In discussing
the absence of a consensus on the term relationship marketing, and on the
appropriateness of the term, other authors have suggested that a focus on interactions
and networks of interactions between businesses and their customers might be more
meaningful (Healy et al., 2001; Zoliewski, 2004). The concepts of co-production and
customer communities both focus on interactions. Communities, in particular, involve
networks of interactions.
The theme of interaction between customers and organizations in product and
service innovation is developed in the literature on co-production. Prahalad and
Ramaswamy (2000) suggest that companies have to recognise that the customer is
becoming a partner in creating value, and need to learn how to harness customer
competences. One aspect of this will be the engagement of customers in co-creating
personal experiences. The body of work on co-creation and co-production has grown in
recent years. Kristensson et al. (2004) have examined the benefits of involving users
in suggesting new product ideas, finding that ordinary users created significantly more
original and valuable ideas than professional developers, whilst professional
developers and advanced users created more easily reliable ideas. At a more modest
level of customer engagement, Salomo et al. (2003) found that customer orientation
in innovation projects (not necessarily, in this case, customer engagement) had a
positive influence on NPD success and that the impact increased with the degree of
product innovativeness. Similarly, Hsieh and Chen (2005) showed that new product
development performance can be enhanced by interacting with users, and capitalising
on user-knowledge management competences. Matthing et al. (2004) suggest that the

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value of customer involvement in new service development resides in the opportunity

to facilitate proactive learning about the customer, and to understand and anticipate
latent customer needs. Lilien et al. (2002) suggest that user contribution to the idea
generation process is optimised through the careful selection of lead users to
participate in the process.
Dahlsten (2004) discusses customer involvement in the case of a product
development project at Volvo Cars, which allowed the project management team
to acquire an understanding of the customer through customer presence. A study
comparing the sources of product and process innovation in large and small
technology-based firms found that product developers in SMEs valued customers,
co-workers, marketing and journals more highly, whilst suppliers were particularly
valued by large firms (Bommer and Jalajas, 2004).
Co-creation might be viewed as an aspect of customer-knowledge competence,
the processes that generate knowledge about specific customers (Campbell, 2003).
Gibbert et al. (2002, p. 460) describe customer knowledge management as a process in
which organisations seek to know what their customers know and define it as:
. . . the strategic process by which cutting-edge companies emancipate their customers from
passive recipients of products and services, to empowerment as knowledge partners. CKM is
about gaining, sharing, and expanding the knowledge residing in customers, to both
customer and corporate benefit.

It is thus concerned with an understanding of how to elicit and leverage knowledge

from customers. Their emphasis on interacting with customers and co-production,
extending to co-learning, lifts the focus from collecting data and information in order to
learn about customers to learn with customers. They discuss five different styles of
customer knowledge management, including prosumerism where the customer acts
as co-producer, and communities of creation in which groups of people work
together, have shared interests, and want to jointly create and share knowledge.
The focus of co-production research is often on product innovation and new
product development, with some contributions relating to service development
(Matthing et al., 2004). However, Prahalad and Ramaswamy (2003), suggest a future in
which the locus of innovation and co-production will shift from products and services
to experience environments. This suggestion aligns with other proposals that the
experience marketing era is on the horizon, and that it is becoming increasingly
important for businesses to respond to the needs of the experience consumer (Li and
Wei, 2004).
Co-creation may take place in the context of customer communities. There is a
considerable literature on customer clubs (Butscher, 2002; Gustafsson et al., 2004;
Stauss et al., 2001) and loyalty schemes (Bolton et al., 2000; Mauri, 2003; Passingham,
1998; Worthington, 2000). Only a small sub-group of such clubs and schemes can
properly be described as customer communities, however, which should at the very
least exhibit C2C interaction. To convincingly justify the use of community they
should furthermore share a culture with norms, values and identity, and mutual
interests and objectives. Fan clubs, interest clubs, and software user groups may
constitute customer communities. Butscher (2002) identifies the Kawasaki Riders Club,
The Volkswagen Club, and Swatch The Club as examples which might be described as
customer communities. On the other hand, loyalty schemes such as Tesco Clubcard,
American Express, Airmiles, and Marriot Rewards are focussed on the B2C dimension

of relationship marketing, and do little to cultivate or influence C2C interactions.

Therefore, whilst they may be able to identify a relatively stable group of users, they
have not created a community.
One context in which there has been more discussion of customer communities
is the virtual environment (Armstrong and Hagel, 1996). Some loyalty schemes use
this channel to support C2C interaction. Virtual customer communities enable
organizations to establish distributed innovation models that involve varied customer
roles in new product development (Nambisan, 2002; Pitta and Fowler, 2005). Nambisan
(2002) suggests that the design of virtual customer environments needs to consider
interaction patterns, knowledge creation, customer motivation, and integration of the
virtual customer community with the new product development team. Dholakia et al.
(2004) explore the impact of group norms and social identity on participation in
consumer communities. The wider literature on virtual communities and their role
in learning and knowledge creation is also substantial, and may have perspectives to
offer on the role of virtual communities in innovation (Hall and Graham, 2004;
Davenport and Hall, 2002; Wenger, 2000).
In conclusion, the themes of co-creation and customer communities have been
identified as important in the literature, but there remains a scope for considerable
further work, specifically relating to:
.
co-creation of experiences;
.
customer communities that exist in both physical and virtual space; and
.
the mechanisms and processes through which organizations can engage
customer communities, as opposed to individual members of those communities,
in co-creation.
Methodology
Case studies are a valuable way of looking at the world around us, and asking how
or why questions (Yin, 1994). The case study design adopted in this paper may be
described as a holistic single case design. Typically, single case designs are
appropriate when the exercise has something special to reveal that might act as a point
of departure for challenging received wisdom, prior theoretical perspectives and
untested assumptions.
A specialist in sporting kite technology was chosen as the basis for the case analysis
in this paper for four reasons in particular, as follows:
(1) The stated mission of Flexifoil International is to: provide our customers with
the ultimate Kitesports experience (www.flexifoil.com/company).
(2) Flexifoil has been consistently committed to product innovation.
(3) Flexifoil works with customers and proactively builds customer communities to
support customer engagement in co-creation of the kiting experience.
(4) The active and extensive participation of one of the authors in the kiting
community formed the basis for an in-depth understanding of the community
building and co-creation processes observed.
Company profile: Flexifoil International
Through product innovation, the company seeks to design and develop the highest
performance products, with new designs and products that support new kite-based

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sporting experiences and events. Flexifoil build both their own customer community
and the kite boarding community in general through customer service, distribution
networks, sponsorship and promotion of the sports for which their products are used.
They provide opportunities for the kite sporting community to interact, online and in
other ways. Their community is thus built through B2B, C2B and C2C relationships
and channels.

140
Product development
Until the early 1970s, a kite had for hundreds of years been a piece of fabric controlled
with one or two lines, designed to be hand-flown in windy conditions.
What is now Flexifoil International started when two English university students
effectively invented the two-line power kite by producing the first to be sold
commercially. Two larger kites with the evocative names Pro Team 8 and Super 10
established Flexifoils market position, and enabled the company to enter upon a period
of innovation and experimentation that explored a range of different potential
applications for power kites. Some of their innovations were successful, others less so,
such as three-wheeled buggies designed to be pulled by a power kite or traction kite.
The successful developments in materials and design technology by Flexifoil and
its followers allowed this basic product to support today such diverse activities as kite
boarding (water-based), snow kiting, kite land boarding, buggying, recreational power
kiting, and sportkiting (traditional kiting). The companys own product range now
comprises: power kites, recreational kites, traction kites, and water re-launchable kites;
buggies and boards; lines and control gear; and miscellaneous accessories such as
clothing.
Following the launch of a web site, with associated forums in which enthusiasts
could meet and exchange ideas, Flexifoils sales increased by around 25 per cent each
year between 1999 and 2004. Innovation continued, with the development of
water-based kiting or kitesurfing, and later kites for land boarding and snow kiting.
Over the last thirty years, the company had thus effectively created a market, and
maintained leadership in its particular niche, by means not only of product innovation
but also engagement with and cultivation of a power-boarding community.
Community development
Distribution. The community development process begins with the companys
distribution network of authorised retail outlets. Initially, those were mainly
windsurfing and surfing shops, but more recently specialised kiting shops have
entered the market. Significantly for Flexifoil, some of those have developed into
kitesports centres where customers can fly before they buy. At three Premier Kite
Sports Centres, the most comprehensive Flexifoil range is available for trial in an
environment characterised by knowledgeable staff and extensive facilities in a good
location; activity training is also on offer. A smaller range of Flexifoil kites is sold
through high street shops. The company also moves the product to market through
training schools, academies and university kite clubs, to whom equipment is available
at discounted rates or even free of charge if the outlet becomes an official Flexifoil
training centre.
In addition to these bricks-and-mortar outlets, the company transacts a significant
proportion of its retail sales through internet distributors. It also sells spare parts,

branded clothing and a selection of promotional merchandise via Flexifoildirect.com,

but restricts distribution of core products to distributors who can offer a full after-sales
service.
The objective of the companys distribution strategy is to build, support and
maintain an effective customer community.
Promotion and marketing communication. The main platform of Flexifoils
promotional programme is to communicate their commitment to after-sales support,
and their ambition to maintain good relationships with both customers and dealer
outlets. This strategy, in turn, generates positive word-of-mouth communication, and
often act as a channel for customer feedback that can inform future product innovation
and development.
In pursuit of that objective, Flexifoil make extensive use of specialised advertising
media, including every kite magazine in circulation, often running double-page
spreads. A branded display stand for Flexifoil product catalogues is distributed to
every dealer. To keep the brand at the centre of the kitesporting world, the company
sponsors a team of kite boarders who compete around the world. The promotional mix
thus embraces advertising, publicity, sales promotion and point-of-sale.
Flexifoil furthermore use their web site and its forums proactively to develop the
UK kiting community, especially pre-launch. Previews of new kites provoke discussion
in the forums, and a level of interest that builds up over months of anticipation and
typically generates high sales volumes immediately on the release of the product.
This online communication channel brings customers together to exchange
experiences, and sell equipment to each other. The company lays claim to the
largest online kiting community, of nearly 7,000 members. The variety of forums
available to its members specialise in the full range of sportkiting activities.
The clear aim of the marketing communications strategy is, like the distribution
strategy, to create a community of interest rather than one based simply on
transaction.
Discussion
This discussion will draw out two themes from the case study analysis: co-creation,
and customer communities.
The study contributes a perspective on the co-creation of experiences, which is a
central element in the emerging paradigm of experience marketing. By continuing
engagement with their customer community, the subject company has been able not
only to gather feedback on the experiences associated with the use of its products, but
also to add to them by offering opportunities, in both the real and virtual environments
for customer to enjoy interactions with others who share their interests. It monitors and
enhances the experience through the same channels. Whilst product innovation is
stepwise, the dialogue and interaction with customers on which that innovation
is based is continuous. This is not co-production in the sense that the term is used
in new product development contexts, but rather in the service context, where the term
refers to the fact that customers have a hand in the development of their own service
experience. Nevertheless, experience co-creation in this case, embeds product
innovation. The impact of this approach to co-creation is difficult to disentangle from
the impact of other business and marketing actions. The significant increase in sales
in the years since the launch of the web site could be taken as one indicator, but it

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is important to acknowledge the spiral nature of the community creation process.

This increase in sales will have expanded the community, and probably also have
intensified customers engagement with the experiences that community members
co-create with the company.
The case also contributes some insights on the nature of customer communities.
Though the company does ask customers to register their product and thereby collects
personal contact details, it does not operate a customer community, club or loyalty
scheme. Rather, the innovative and interesting products act as a catalyst for
community creation through the medium of the experiences they deliver. The
customer community comprises those who have participated in those experiences,
enjoyed them, and wish to develop the interaction. Customers work in partnership with
the company to build excitement and develop skill, and by sharing the experiences
with others, add to the totality of the customer community. The company has taken a
number of actions to facilitate this process, including working with distributors,
sponsorship, engagement in events, training courses, and an interactive web site.
Specifically, their approach to communication with their customers is sophisticated.
The common view of marketing communications as a one-way transmission is
replaced by a marketing communications strategy designed to build and reinforce the
companys position as a leader of a community. Traditional channels such as
advertising, sponsorship, and even brand building are only elements in a complex web
or network of marketing communications activities, involving C2C and B2B as well as
B2C relationships. The company communicates directly with its customers, but also
provides contexts which encourage them to talk among themselves. In addition, the
marketing communications effort is pushed through distributors, not just in terms of
the traditional advertising and branding, but also through the selection of distributors
that can offer appropriate support and advice. These actors in the system have a role in
welcoming new members into the community. They are supported in doing so by the
existing on-line community, and various company-sponsored events at which
members are encouraged to gather.
The customer community has built gradually as the business has grown.
As new products have been added to the product range to support new sports,
new sub-communities have formed around them. The process of community
development goes hand in hand with product development.
Conclusions and recommendations
The entrepreneurs behind Flexifoil International have simultaneously created a sport,
and an associated sporting community. The company is clear that its mission as not
simply to develop and distribute the best products but rather to deliver the most
exciting kiting experience. This case study has demonstrates that the entire marketing
mix is focussed not on transactions, or even relationship building, but rather on
community creation. That community includes both consumers and dealers. Product
innovation, distribution and promotion are tightly coupled with community creation.
Community building is not just about increasing membership, or even about the
engagement of members with the community, but focuses on the creation of a level of
mutuality in which there is ongoing dialogue between community members and the
company. Flexifoil has neither annexed an existing community, nor do they own one,
although they do manage a virtual space through which the community can interact.

Rather, their product innovation and the experiences that their product range provides
have the potential to act as the catalyst for the community, whilst sponsorship,
engagement in events, and the virtual space all facilitate the enhancement of the
experience for community members.
Other companies compete with Flexifoil for leadership of the power kiting
community, both rival manufacturers and others keen to enhance the sportkiting
experience. Many of these have web sites through which they seek to capture an online
community. For example, one casts itself as the kite flyers portal to the internet
offering links to kite manufacturers and kite stores in the USA and Canada, to other
power kiting web sites, to other kite flyer sites, kite teams and clubs, and to magazines
and newsgroups. Another claims to be the online community that brings flyers
together and a third promotes itself as the internet magazine for kiters. All offer
different services and benefits to their customers, but for some, their engagement with
the sport kiting community will be restricted to virtual space. Though Flexifoil has a
strong brand presence as a manufacturer, it needs to encourage members to participate
with it in co-creation if it is to deliver on its mission of providing customers with the
ultimate kite sports experience.
The approach to marketing strategy described in this case study can aptly be
described as customer community leadership. By leading the sport kiting community,
but not owning it, Flexifoil has created a community that will buy their products,
co-create kiting experiences, provide insights that can inform innovation in the
product, the experience and the community innovation, look forward to the next
product release, and mutually enhance community members experiences of the
companys products and services. Embedded in this approach to community
leadership are a number of more traditional marketing actions, such as new product
development, advertising, and commitment to after-sales support. The distribution
channels are designed to offer the support and training that is likely to enhance sport
kiting experiences, but also to build relationships with dealers, and to bring sports
kiters together. This is supplemented by opportunities for interaction in virtual space.
Community development is achieved through a network of relationship-building
actions, at the heart of which are enjoyable and shareable sports kiting experiences.
Through community leadership, the company has created a context in which
customers are thus from being passive recipients of products and services, and
empowered as knowledge partners (Gibbert et al., 2002). In other words, it has thereby
created a context that facilitates the processes of customer knowledge management.
This is an approach to marketing intelligence and decision making embedded in
dynamic co-creation processes that involve customers as partners.
It is worth noting that the term customer community leadership can have two
different meanings in practice. First, it may mean leadership of a community, in the
sense of making it work, setting its direction, and participating in the shaping of
experiences of community members. In this context, the focus is on factors such as
member engagement, culture, norms, identity and community viability, in terms of the
value delivered to all parties. Second, it can describe an avenue to market leadership, in
which the business performance of an organisation over the longer term is defined and
determined by the extent to which its leadership of a community of potential
customers, or its power and capacity to lead, is greater than that of its competitors.

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In taking the development of the concept of customer community leadership

forward, it will be important to explore the different styles and approaches that are and
can be adopted by different firms and organizations. Given that another essential of
successful leadership is followers, an important phenomenon for further study is the
nature of followership in this context.
This case study has focussed on the actions and strategies adopted by one business
to build and benefit from a customer community and to engage customers in the
co-creation of an experience. In addition, it has demonstrated how both online and
real-world communities can be enlisted to contribute to building the experience. There
is a scope for considerable further study of the processes associated with the
co-creation of the experience, and the details of how communities operate. Such
research needs both to cover a wider range of organizations and business sectors, and
to examine in more detail aspects of communities, co-creation and customer knowledge
management. Some potential areas of investigation are:
.
Perceptions and views of different stakeholders as to the impact of the
community and the contributions of different parties in the co-creation of
the experience.
.
The profile of such customer communities in terms of loyalty, retention and
customer lifetime value, including comparisons between online and real-world
communities.
.
Community processes, including models of key processes of influence,
knowledge and learning, identification and role of node members, and the
role of celebrity voices and endorsement.
.
The marketing actions that contribute to the cultivation of effective co-creation
communities.
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Zontanos, G. and Anderson, A.R. (2004), Relationships, marketing and small business:
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Corresponding author
Jennifer Rowley can be contacted at: [email protected]

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