Co-creation and Consumers' Willingness to Pay Premium: Effect of Involvement and Satisfaction with Co-creation Process

Co-creation is becoming a widespread phenomenon of high importance as it creates value for customers and companies. However, the relationship between co-creation, willingness to pay premium (WPP), satisfaction with the co-creation process, and level of involvement in the co-creation process have not been examined yet, especially in the case of the cultural creative industry. This paper examines the effect of functional and esthetic co-creation on consumers' WPP for co-created products and the mediating role of consumers' satisfaction with the co-creation process. The data were obtained from 143 Chinese consumers through the two most popular social networking service applications. The linear regression was applied to investigate the proposed relationships. Findings indicate that the degree of functional and esthetic co-creation positively affects WPP. Further, the effect of both co-creation attributes is mediated by consumers' satisfaction with the co-creation process. Additionally, the consumers' level of involvement positively moderates the mediating effect. However, the moderating effect was found as weak negative when it comes to functional co-creation. This study sheds light on how co-creation can be used to develop successful products to fulfill consumer needs and enhance their purchase intention as well as willingness to pay a premium for the co-created product. This study also contributes to the co-creation theory in the context of the cultural creative industry.