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Top1. Introduction
Intangible assets like reputation, status, organizational identity, brand familiarity, and goodwill are essential for organizations. They also help in generating value that can be sustained continuously (Chen et al., 2021; Haralayya, 2021). Moreover, loyalty as an intangible asset is one that a firm can boast of (Cossío-Silva et al., 2016). Organizations strive to meet the needs of both their existing and potential customers in this competitive business and marketing environment. They invest many resources into research, production, and promotion to achieve this. All the investments may likely not materialize; hence, to get a competitive edge over rival organizations, they need the loyalty of their customers, either through attitudinal or behavioral dimensions (Cossío-Silva et al., 2016).
Market research carried out posited that about 135 start-ups failed due to the circumstances that products and services were unable to satisfy the needs of the market, which represents 42 percent; on the other hand, 14 percent of the failure was attributed to ignoring customers, whereas 17 percent failed as a result of the absence of a business model (Insights, 2019).
Customers have become sophisticated, demanding, and well-informed in recent times because of their easy access to information and being spoilt with choices. Hence, they now purchase value, not product. From this backdrop, firms need to engage both potential and existing customers in value creation development because getting their customers involved in the production process makes them feel appreciated and give off their best, which ultimately brings about satisfaction and also for the survival of the organization.
Customers, however, become loyal to a firm when they are part of the creation of the output in the production process because it gives the customers the perception of a quality service received (Vega-Vázquez et al., 2014). For instance, in 2017, Forbes magazine depicted co-creation as the second most effective and efficient business model that brings about success among firms (Altman, 2017). In recent times, firms have taken advantage of co-creation to generate new product concepts from customers (Sogn-Grundvag et al., 2008; Lorenzo, 2021). This, however, enables firms to reduce the cost of new product development, promotion, and market research.
Value co-creation is the view from the organization's perspective. Still, recent studies of the concept have revealed that it can also be viewed from the customer’s and other stakeholders’ perspectives (Cossío-Silva et al., 2016; Qi & Roe, 2018). Engaging in the development of value creation gives some level of satisfaction and trust to consumers, which leads to loyalty (Yang et al., 2014). From the firm's viewpoint, the important uniqueness of this study has to do with the firm meeting its set objectives as a result of loyalty depending on customer satisfaction and trust. It has been established that in an attempt to win over a new customer to become loyal, the cost is far greater than the cost of serving an existing loyal customer (Prashar & Verma, 2020).