International Journal of Market Research Vol.

56 Issue 6

Influences of co-creation on brand

experience
The role of brand engagement

Herbjørn Nysveen
Norwegian School of Economics (NHH)
Per Egil Pedersen
Buskerud and Vestfold University College/Norwegian School of Economics (NHH)

The purpose of this article is to study the influence of customer co-creation

participation on customers’ brand experience, brand satisfaction and brand
loyalty. We apply a service logic approach in which co-creation participation refers
to co-creation of customer value together with the brand, co-creation of new value
with the brand and co-creation of value together with other customers within
the context of the brand. The reasoning applied is that customers’ co-creation
with a brand – stimulating their engagement with the brand – influences brand
experience, and through that, brand satisfaction and loyalty. A study among bank
customers shows that co-creation participation positively influences sensory,
affective, cognitive, behavioural and relational dimensions of a brand experience.
However, influences of brand experience dimensions on satisfaction and loyalty
are revealed to be complex as some of the dimensions influence satisfaction
positively, while others have a negative influence. Furthermore, we show that
the satisfaction and loyalty effects of co-creation participation are partially
mediated by brand experience. Thus, there are both indirect and direct effects on
satisfaction and loyalty from customers’ co-creation participation. Implications
point to the importance of carefully managing co-creation participation in order
to gain competitive advantages. Companies should be careful about how brand
experience is stimulated through co-creation because of the potential risk of
negative effects on satisfaction and loyalty.

Introduction
We are moving from a company-centric value creation to a more
customer-centric value creation where customers interact with the company

Received (in revised form): 14 February 2013

© 2014 The Market Research Society 807

DOI: 10.2501/IJMR-2014-016
Influences of co-creation on brand experience

and co-create value (Prahalad & Ramaswamy 2004a; Roberts et al. 2005;
Vargo & Lusch 2008). In this customer-centric world, value co-creation,
characterised by ‘joint creation of value by the company and the customer’
(Prahalad & Ramaswamy 2004b, p. 8), stands out as the critical mechanism
for competitive advantage. Thus, co-creation refers to co-creation of
customer value together with the brand, co-creation of new value with
the brand, and co-creation of value together with other customers within
the context of the brand. For many brands and customers the boundary
between these forms of co-creation is blurring, which suggests that an
investigation of the effects of co-creation as a more activity-orientated
concept covering co-creation participation in general may be warranted.
So far our understanding of the effects of co-creation is limited, and based
mainly on an interpretation of co-creation as co-creation of new value with
the brand. Prahalad and Ramaswamy (2004b, p. 5) claim that ‘value shifts
to experiences’ in the customer-centric world, and that ‘The experience is
the brand’ (p. 13). Consequently, the key to competitive advantage will be
to stimulate brand experiences through co-creation activities.
Customer experiences have received attention in the marketing literature
for decades (e.g. Holbrook & Hirschman 1982). A rather comprehensive
contribution to this literature is presented by Brakus et al. (2009). Their
brand experience framework includes sensory, affective, intellectual and
behavioural dimensions of brand experiences and validated scales for
measuring the strength of these experience dimensions. Although potential
influences of co-creation on experience have been discussed in the literature
(Prahalad & Ramaswamy 2004a; Verhoef et al. 2009; Chakravorti 2011),
empirical studies of such effects are scarce. Therefore, the purpose of this
article is to study the influence of customer co-creation participation on
customers’ brand experience, satisfaction and loyalty with the brand. To
deduce hypotheses about the influences of co-creation participation on
brand experience dimensions, literature on customer–brand engagement
is applied.
This article has several contributions. Articles integrating co-creation
and experience have mainly looked into the importance of stimulating
co-creation experiences (Prahalad & Ramaswamy 2004b; Füller et al.
2011). This article tries to separate the co-creation activity and the brand
experience, and investigate how customers’ participation in co-creation
with a brand may influence their brand experience, brand satisfaction
and brand loyalty. Following the tradition of experience research dividing
experience into sub-dimensions (Gentile et al. 2007; Schmitt 2008;
Brakus et al. 2009; Iglesias et al. 2011), we investigate the influence of

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co-creation on sensory, affective, cognitive, behavioural and relational

brand experience dimensions, revealing a rather detailed picture of how
co-creation can influence brand experience. A second contribution is the
application of customer–brand engagement (e.g. Hollebeek 2011a, 2011b)
as a theoretical explanation for the potential effects of co-creation on
brand experience, contributing to the understanding of how co-creation
may influence brand experience. Third, the article also gives a contribution
to the brand experience perspective taken by Brakus et al. (2009). Whereas
Brakus et al. (2009) looked at the effects of an aggregated brand experience
construct on brand satisfaction and loyalty, this article also looks into
the role of individual brand experience dimensions on satisfaction and
loyalty. As shown by Nysveen et al. (2012), this contributes to a more
distinct understanding of the effects of brand experience on satisfaction
and loyalty. Although validated by Iglesias et al. (2011) and Nysveen et al.
(2012), the framework by Brakus et al. (2009) is novel. Consequently,
a fourth contribution of this study is that it provides further empirical
validation of the Brakus et al. (2009) framework.
The article continues with a discussion of the relevant literature on
co-creation and brand experience, and a discussion of the mechanisms
for how co-creation can influence brand experience. Hypotheses are
then presented, the methodological approach described, and results from
the study presented. The article closes with a discussion of potential
implications and ideas for future research.

Theory
Figure 1 illustrates the constructs and relationships studied in the article.
The arrows in the middle of the diagram show that customers’ participation
in co-creation with a brand is proposed to stimulate customers’ engagement
with the brand and, through that, brand experience, brand satisfaction and
brand loyalty. The brand engagement concept is presented as a ‘dotted
box’ in Figure 1 as the concept is not empirically measured in this article,
but is used to theoretically derive the proposed influence of customers’
co-creation participation on customer brand experience. This proposed
influence of co-creation on customer–brand engagement corresponds
with Hoyer et al. (2010), and is in line with Brodie et al. (2011a, 2011b)
arguing that concepts such as customer participation and involvement
represent antecedents to brand engagement. The proposed influence of
customer–brand engagement on brand experience is in line with Hollebeek
(2011b) looking at brand experience, satisfaction and loyalty as potential

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Brand Brand Brand Brand

Co-creation
engagement experience satisfaction loyalty

Figure 1 Conceptual model

consequences of customer–brand engagement. In the lower line of Figure 1,

we also open up for direct effects of co-creation on both brand satisfaction
and brand loyalty in addition to the indirect effect working through brand
experience. Finally, following Brakus et al. (2009), we also propose direct
influences of brand experience on both brand satisfaction and brand
loyalty. In many ways, the model is mirroring the conceptual model
presented by Hollebeek (2011b), proposing that customer involvement
influence customer–brand engagement, that customer–brand engagement
influence relationship quality (trust, commitment and satisfaction), and
that relationship quality influence loyalty.
Customer engagement is a function of a dynamic and iterative process
of service relationships (Brodie et al. 2011b; Hollebeek 2011b). Given the
dynamic and iterative character of the causal model proposed in Figure 1,
the model should be seen as representing a specific time in a relationship,
given that customers’ brand experience, satisfaction and loyalty over
time will influence customers’ participation in co-creation and customers’
brand engagement.

Co-creation
Co-creation has been applied with slightly different meanings. Taking a
somewhat holistic perspective, Prahalad and Ramaswamy (2004b, p. 8)
point to ‘joint creation of value by the company and the customer’ as the
essential element of co-creation, including ‘joint problem definition and
problem solving’ (p. 8). Co-creation is further specified as ‘the process by
which mutual value is expanded together’ (Ramaswamy 2011, p. 195).
Adding to the holistic perspective, Vargo and Lusch (2008), focusing on
value in use, argue that companies can only provide a value proposition
to customers and that customers’ co-creation is necessary for value to be
realised. Taking a more narrow approach, and also an approach more
directly related to market research, Füller et al. (2010) discuss co-creation
as customers’ participation in product development. This means that

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customers actively participate in the generation and evaluation of ideas at

all stages of a service or product development process. This corresponds
to what we have previously termed co-creation of new value. With this
form of co-creation, market information is actively integrated in the
innovation process through customer participation. This perspective is in
line with what Roberts et al. (2005) interchangeably call co-creation and
co-development, arguing for the importance of including consumers in
innovation processes. In their discussion they also pinpoint that, from a
relational perspective, companies can learn ‘from and with consumers in
the context of contemporary consumption’ (Roberts et al. 2005, p. 411). So
co-creation is not limited to interplay between companies and consumers
in formal innovation processes, but also includes mutual development of
value in daily consumption situations. From a customer’s perspective there
is no fixed and clear boundary between these forms of co-creation.
Although we see differences in how different co-creation concepts are
used and defined, a common factor is that co-creation is considered a
collaborative or joint activity including both producers and consumers
for the purpose of creating value. In line with the perspective of Roberts
et al. (2005), we look at co-creation as the degree to which consumers
actively participate with companies in improving existing solutions or
find new solutions to create more value both for the consumer and the
company. Through the interaction and dialogue elements of co-creation,
mutual knowledge and understanding is developed, improving both the
companies’ ability to provide what the consumers want and the consumers’
ability to choose or adapt services that fit their needs.
Customer learning benefits, social integrative benefits, personal
integrative benefits and hedonic benefits are critical antecedents to make
consumers participate in virtual co-creation (Nambisan & Baron 2007,
2009). Consumers’ participation in co-creation should lead to an increased
knowledge and understanding of the products and services co-created
among the participants. Social integrative benefits are the benefits revealed
from the relationships consumers develop with other consumers and
representatives from the company through the co-creation activities.
Thus, co-creation also takes the form of co-creation of value with other
customers or consumers, but typically within the context of the brand and/
or its representatives. Personal integrative benefits refer to the benefits
individual customers can get through their participation in co-creation.
Hedonic benefits are related to the enjoyment of participation and the
‘mental or intellectual stimulation from solving product-related usage
problems’ (Nambisan & Baron 2007, p. 48). Finally, the model proposed

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by Nambisan and Baron (2007) also pinpoints the affective evaluation of

co-creation as an antecedent of future participation in co-creation. This
effect is mediated by attitude to the firm participating in the co-creation
process. Thus, we see that cognitive, affective, behavioural and relational
elements are important to stimulate in co-creation activities.

Brand experience
The idea of creating unique and valuable experiences has turned into a key
strategic focus among scholars (Holbrook & Hirschman 1982; Gentile et al.
2007; Brakus et al. 2009) and practitioners (Schmitt 2003; Pine & Gilmore
2011). Although the effect of co-creation on experiences has been discussed
in the literature (Prahalad & Ramaswamy 2004a; Verhoef et al. 2009),
empirical studies of such effects are scarce. In a consumer-centric world, it
is suggested that experiences are the relevant measure of value (Prahalad
& Ramaswamy 2004b). Also, it is proposed that ‘The experience is the
brand’ (Prahalad & Ramaswamy 2004b, p. 13). Based on this, a relevant
framework for studying the influences of co-creation on experiences is the
brand experience framework presented by Brakus et al. (2009). In contrast
to the customer experience perspective by Gentile et al. (2007) and others,
Brakus et al. (2009) relate experiences to the brand, and conceptualise
experiences as ‘subjective, internal consumer responses (sensations, feelings,
and cognitions) and behavioural responses evoked by brand related stimuli
that are part of a brand’s design and identity, packaging, communications,
and environments’ (Brakus et al. 2009, p. 53). Based on this definition,
communication and interactions as part of co-creation activities are
considered important brand-related stimuli with the potential to enhance
brand experience. Besides the above-mentioned conceptual relevance of
the Brakus et al. (2009) framework, their empirically validated brand
experience scale also stands out as highly relevant when trying to capture
empirically what a brand experience is, how it is influenced and what
effects it has on traditional brand-related concepts.
Four dimensions of brand experiences are suggested by Brakus et al.
(2009): sensory, affective, intellectual and behavioural. The sensory
dimension is about the degree to which a brand appeals to consumers’
senses and whether the brand makes strong and interesting impressions
on consumers’ senses. The affective dimension is about how strongly the
brand induces feelings and emotions among consumers. The intellectual
(or cognitive) dimension concerns the degree to which a brand stimulates
consumers’ curiosity, thinking and problem solving. Their final dimension

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of brand experience relates to how strongly the brand is able to engage

consumers in physical activities – the behavioural dimension. In addition,
a relational (Nysveen et al. 2012) or social (Dirsehan & Çelik 2011)
dimension has supplemented these four dimensions. Given the relational
character of co-creation, this seems to be a relevant additional dimension to
include when discussing the influence of co-creation on brand experience.
In addition to exploring the dimensions of brand experience, Brakus
et al. (2009) also identified positive influences of brand experience on
brand personality, brand satisfaction and brand loyalty. Their results
are further substantiated by research showing the influences of brand
experience on trust, satisfaction and loyalty (Sahin et al. 2011), whereas
Nysveen et al. (2012) revealed the influences of brand experiences on
satisfaction and loyalty to be somewhat more complex.

Customer–brand engagement
According to Kumar et al. (2010, p. 297), customer engagement refers
to ‘the creation of a deeper, more meaningful connection between the
company and the customer’. This implies that customer engagement is
targeted towards the company or brand, and not the co-creation activities.
This is further substantiated by Gambetti and Graffigna (2010) and Brodie
et al. (2011a), observing that brands are the most typical engagement
object in the business literature. Consequently, we focus on customers’
engagement with a brand, and define customer–brand engagement as ‘the
level of a customer’s cognitive, emotional and behavioural investment
in specific brand interactions’ (Hollebeek 2011a, p. 565). Following
Brodie et al. (2011b), customer involvement and participation are
considered antecedents of customer–brand engagement. In line with this,
our perspective is that co-creation participation alone is not satisfactory
for strengthening brand experiences. To influence brand experience,
co-creation participation has to stimulate an engagement with the brand
providing or representing the context of the co-creation environment, and,
through that, transform into brand experience, satisfaction and loyalty.
Corresponding to the dimensionality of brand experiences (Brakus
et al. 2009), the perspective taken by Brodie et al. (2011a, 2011b) also
highlights the multidimensionality of customer engagement (see also
Hollebeek 2011a, 2011b). According to the definition of customer–brand
engagement (Hollebeek 2011a), the concept includes a cognitive, affective
and behavioural dimension. As is also specified in the definition, customer–
brand engagement is part of a specific interaction between the brand and the

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customer, pointing to the relevance of a relational dimension as well. These

dimensions are further specified by Patterson et al. (2006, cited in Brodie
et al. 2011a). Applying perspectives from the work engagement literature,
they suggest absorption, dedication, vigour and interaction as components
of customer engagement. Absorption is about the level of concentration
a customer has on an engagement object. This includes the cognitive
dimension of engagement. Dedication reflects the consumer’s feeling of
belonging to the engagement object, reflecting both the emotional and the
relational dimension of customer engagement. Vigour and interaction are
seen as the level of energy consumers put into the dialogue and interaction
with the engagement object – assuming both a relational and a behavioural
dimension of engagement. Although Hollebeek (2011a, 2011b) shows
that a multitude of engagement dimensions have been discussed in the
literature, cognitive, affective, behavioural and relational dimensions
of engagement have been applied by several scholars and appear to
be relevant dimensions of customer–brand engagement. Consequently,
customer–brand engagement is multidimensional (e.g. Hollebeek 2011b),
and includes dimensions such as cognition, affect, behaviour and relations.
These dimensions correspond to the dimensions used to explain motives
for participation in co-creation (Nambisan & Baron 2007, 2009) with
a brand as well as the dimensions included in the brand experience
framework proposed by Brakus et al. (2009).

Hypotheses
To create positive sensory brand experiences, co-creation participation
has to stimulate consumers’ senses in interesting and preferably appealing
ways, and engage customers in the brand. Customer–brand engagement is
created in specific interactions between a customer and a brand (Hollebeek
2011a), and co-creation can be seen as one such specific interaction.
Consequently, the design of co-creation systems (Kohler et al. 2011)
provided by brands becomes important for stimulating sensory brand
experiences. The physical surroundings and/or the user interface developed
for interaction in co-creation are perceived through the customers’ senses.
As brands typically seek to activate customers’ senses during co-creation
activities, customer engagement with the brand is stimulated and, through
that, the strength of the sensory brand experience is influenced.

H1: Co-creation has a positive influence on the strength of

sensory brand experiences.

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Hedonic values such as enjoyment, fun and pleasure are important

emotional motives for co-creation (Nambisan & Baron 2007, 2009). Brand
engagement includes emotional investments in specific brand interactions
(Hollebeek 2011a). As such, emotions are realised through co-creation
activities; customers participating in co-creation will feel a higher dedication
(Patterson et al. 2006, cited in Brodie et al. 2011a) to the co-creating brand,
increase consumers’ feeling of belonging with the brand, and strengthen
customers’ affective engagement with the brand. This affective engagement
with the brand – stimulated through co-creation activities – is an important
foundation for realising affective brand experiences.

H2: Co-creation has a positive influence on the strength of

affective brand experiences.

Cognitive stimulations such as learning and understanding of product-related

solutions are important motives for co-creation participation (Nambisan &
Baron 2007, 2009). Hollebeek (2011a) pinpoints the importance of the
cognitive dimension of customer–brand engagement. Through customer
absorption, that is the level of concentration on an engagement object
(Patterson et al. 2006, cited in Brodie et al. 2011a), the cognitive challenges
of co-creation activities stimulate customers’ cognitive engagement with the
brand. Thus, cognitive customer–brand engagement – stimulated through
co-creation activities – has the potential to stimulate the cognitive brand
experiences of the co-creating participants.

H3: Co-creation has a positive influence on the strength of

cognitive brand experiences.

Co-creation is considered a joint activity among customers and a brand,

implicitly including some level of activity and behaviour. Relating to
the definition of customer–brand engagement by Hollebeek (2011a),
behavioural investment in specific brand interactions is an important
dimension of customer–brand engagement. Vigour and interaction is seen
as the level of energy consumers put into the dialogue and interaction
with the engagement object (Patterson et al. 2006, cited in Brodie et al.
2011a). Through vigour and interaction invested in co-creation activities,
behavioural engagement with the brand facilitating the co-creation
activities is stimulated. We propose that co-creation activities transform into
behavioural brand engagement that constitutes the basis for behavioural
brand experiences.

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H4: Co-creation has a positive influence on the strength of

behavioural brand experiences.

Social integrative elements are revealed as critical for consumers’

participation in co-creation (Nambisan & Baron 2007, 2009). Dedication
reflects consumers’ feeling of belonging with the engagement object
(Patterson et al. 2006, cited in Brodie et al. 2011a). Through the social
and relational elements of co-creation, customers’ dedication to the brand
increases. This strengthens customers’ relational engagement with the
co-creating brand and constitutes a fundament for consumers’ relational
experiences with the brand.

H5: Co-creation has a positive influence on the strength of

relational brand experiences.

Although the brand experience construct presented by Brakus et al. (2009)

relates to the strength of the brand experience, their investigation of the
construct showed that almost all of the respondents’ descriptions of strong
experiential brands were reported as positive. Given the positive valence
of strong experiences, it seems reasonable to argue for positive influences
of brand experience on brand satisfaction. A general theoretical argument
proposed by Brakus et al. (2009) is that brand experiences provide
value to consumers and a higher level of brand satisfaction. A positive
effect of brand experience on brand satisfaction was also confirmed
empirically by Brakus et al. (2009). Related to the effect of the sensory
brand experience dimension, Brakus et al. (2009) build on McAllister and
Pessemier (1982). They argue that consumers seek sensory stimulations,
and brands that are able to create such experiences will be valued. Oliver
(1993) underscores the importance of both cognitive and affective bases
of satisfaction, pointing to the relevance of the cognitive and affective
experiential dimensions as antecedents of brand satisfaction. Furthermore,
customers’ relationship with a brand and with other customers are revealed
to influence satisfaction positively (McAlexander et al. 2003), and an
activity such as self-customisation is found to have an impact on customers’
satisfaction (Valenzuela et al. 2009). This indicates that sensory, affective,
cognitive, relational and behavioural dimensions of experiences have
positive influences on brand satisfaction.

H6a: The brand experience dimensions have positive influences

on brand satisfaction.

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Brakus et al. (2009) argue that consumers want to repeat pleasurable

experiences, and that brand experiences therefore also influence brand
loyalty positively. In their empirical study they found support for a positive
effect of brand experience on brand loyalty. Loyalty is divided into four
phases by Oliver (1999). Cognitive loyalty is based on brand beliefs.
Affective loyalty is a function of liking or attitude to a brand. Conative and
action loyalty are both related to behavioural loyalty. Conative loyalty is a
reflection of intention to repurchase a brand, while action loyalty is about
consumers’ readiness to act and their willingness to overcome obstacles to
keep on buying a brand in the future. In addition to these cognitive, affective
and behavioural dimensions of loyalty, Oliver (1999) also discusses the
potential importance of social alliances and to be ‘one with a group’ as a
motivation to become loyal. Based on the general arguments for a positive
effect of experiences on loyalty, and the relevance of the brand experience
dimensions for the loyalty construct, we propose positive influences of all of
the brand experience dimensions on brand loyalty.

H6b: The brand experience dimensions have positive influences

on brand loyalty.

Prahalad and Ramaswamy (2004b) point out that the value of co-creation
is in the experience, and that the experience is the brand (p. 13), pointing
to the relevance of brand experience as a measure of co-creation success.
Furthermore, research has revealed effects of brand experiences on
satisfaction and loyalty (Brakus et al. 2009; Sahin et al. 2011; Nysveen
et al. 2012). The logic applied in this article is that co-creation can stimulate
customers’ brand engagement and that the brand experiences created
through customers’ engagement with the brand influence brand satisfaction
and loyalty. One of our main propositions is that co-creation activities have
to transform into brand experiences to influence brand satisfaction and
brand loyalty. Consequently, the following hypothesis is proposed:

H7: The effects of co-creation on brand satisfaction and loyalty

are fully mediated by brand experience.

In line with established literature on the relationship between brand

satisfaction and brand loyalty (Yi 1990; Dong et al. 2011), we propose a
positive effect of brand satisfaction on brand loyalty:

H8: Brand satisfaction has positive influences on brand loyalty.

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Method
To test the hypotheses, an online survey was conducted among customers
of banks serving private consumers. Banks were chosen as an empirical
context, as banks and customers often together develop (co-create) plans
for customers’ savings and investments. Advisory banking services are
characterised by inseparability and heterogeneity, and some authors have
noticed a surprisingly high number of banking services originally stemming
from user/client innovation (Oliveira & von Hippel 2011). Thus, banking
services represent a context of relevance to the investigation of co-creation.
The study was conducted in the period between 22 March and 4 April
2011. Data collection was conducted by Norstat, the largest provider of
online panel data in Norway.

Procedure
Online panel members were invited by email to participate in the survey.
Those of the invited members who wanted to participate clicked on the
link to the questionnaire and the following introduction was given:

This study is about the Norwegian consumer banking market. Examples of

services offered by banks are payment services, loans, savings and investment
services, online banking, phone banking, and consultancy services. Below you will
find a list of eight well known banks in the consumer banking market. With which
of these brands do you have a customer relationship?

The respondents then marked the bank or the banks with which they had
a customer relationship. The respondents who marked only one bank
brand were asked to relate their answers to this brand in the survey.
For respondents who marked two or more brands, one of the brands
was selected by a sampling procedure, ensuring that the distribution
of respondents relating to the individual brands of the survey reflected
the market share of these brands. Consequently, respondents related
their answers in the questionnaire to the selected brand, and all
respondents had an established customer relationship with this brand. The
questionnaire started with questions about brand experiences, followed
by questions about satisfaction and loyalty. To avoid sensitisation, items
measuring co-creation were introduced at the end of the questionnaire.
All respondents earned a reward based on the reward system offered
by Norstat.

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Sample
The Norstat panel is designed to be representative for the online
population older than 15 years in Norway (it is an online data panel).
Sampling is controlled by age, gender, household income, education and
some other consumer-related variables, to ensure that each sample reflects
this representativeness. Invitations to participate in the survey were sent to
4,534 panel members. Among the invited panel members, 1,826 (40.3%)
started to answer the questionnaire and 1,002 completed it. A completion
rate of 22.1% of the number of invitations sent out is somewhat higher
than normal with Norstat panel respondents. To minimise careless
responses, respondents with a completion time shorter than 300 seconds
were removed from the final sample. The final number of respondents
was 957. Sample characteristics are presented in Table 1, indicating no
significant differences between sample and population characteristics on
these demographic variables.

Table 1 Sample demographics

%
Gender
Male 51.8
Female 48.2
Age
15–24 10.8
25–34 14.6
35–44 17.5
45–54 19.8
55–64 19.3
64– 19.0
Education
Primary 7.3
Secondary 33.0
University/college ≤ 3 years 42.2
University/college > 3 years 17.5
Household income (in Norwegian krone)
<200,000 4.6
200,000–399,000 13.2
400,000–599,000 20.0
600,000–799,000 19.2
>800,000 28.5
No response 14.5

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Measures
Most of the measures in the study were based on previously validated
measurement scales and were pre-tested in a study of telecommunication
brands (Nysveen et al. 2012). Consumer, customer and brand experience
have been measured in various ways (e.g. Kerin et al. 1992; Maklan
& Klaus 2011). This study sought to explore the relationship between
degree of co-creation and brand experience, brand satisfaction and brand
loyalty. Experience was therefore measured based on the items used by
Brakus et al. (2009) capturing sensory, affective, cognitive and behavioural
experiences of a brand. In addition, three items were included to measure
relational brand experience. These items were ‘As a customer of Bank1 I
feel like I am part of a community’ (inspired by Gentile et al. 2007), ‘I feel
like I am part of the Bank family’ (inspired by Shim & Eastlick 1998), and
a self-developed item: ‘As a customer of Bank I never feel being left alone.’
The wording of all items is shown in Table 2.
Co-creation was measured by six items focusing the different dimensions
of consumers’ participation in co-creation of value with the brand. The
items ‘I often express my personal needs to Bank’, ‘I often suggest how
Bank can improve its services’ and ‘I participate in decisions about how
Bank offer its services’ were all inspired by Chan, Yim and Lam (2010)
to cover the participation dimension of co-creation. The fourth item, ‘I
often find solutions of my problems together with Bank’, was developed
based on the main idea of co-creation – joint creation of value by the
company and the customer (Prahalad & Ramaswamy 2004b, p. 8). The
fifth item, ‘I am actively involved when Bank develops new solutions for
me’, was inspired by how Lin et al. (2010) and Zhang and Chen (2008)
measure co-creation, and by items measuring customer participation
used by Chan et al. (2010). This item was specifically chosen to reflect
the dimension of co-creation and participation as co-creation of new
value – the ‘co-innovation with the brand’ dimension of co-creation.
The last item, ‘Bank encourages customers to create solutions together’,
was included to make sure the dimension of customers’ co-creation
of new value with other customers was also included as part of the
multidimensional co-creation construct.
Brand satisfaction was measured by the three constructs: ‘Overall, I am
satisfied with Bank’ (e.g. Fornell 1992), ‘Being a customer of Bank has been
a good choice for me’ (e.g. Oliver 1980), and ‘Bank has lived up to my

1
The term ‘Bank’ is used here as a generic term that was replaced by the proper name of the bank chosen by the
respondents as the focal brand of the study.

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Table 2 Item wording and standardised factor loading, Cronbach´s alpha, construct
reliability (CR) and average variance extracted (AVE) from the confirmatory factor
analysis

Dimension Items Loadings a CR AVE

Sensory Bank makes a strong impression on my senses 0.94 0.98 0.98 0.93
Being a customer of Bank gives me interesting 0.97
sensory experiences
Bank appeals strongly to my senses 0.98
Affective Bank induces my feelings 0.92 0.94 0.94 0.83
I have strong emotions for Bank 0.86
Bank often strongly engages me emotionally 0.95
Cognitive I engage in a lot of thinking as a customer of Bank 0.69 0.84 0.83 0.62
Being a customer of Bank stimulates my thinking 0.81
and problem solving
Bank often challenges my way of thinking 0.86
Behavioural I often engage in action and behaviour when I use 0.78 0.83 0.82 0.60
Bank’s services
As a customer of Bank I am rarely passive 0.80
Bank activates me 0.74
Relational As customer of Bank I feel like I am part of a 0.92 0.90 0.90 0.76
community
I feel like I am part of the Bank family 0.92
As a customer of Bank I never feel being left alone 0.77
Co-creation I often express my personal needs to Bank 0.69 0.89 0.89 0.59
I often suggest how Bank can improve its services 0.64
I participate in decisions about how Bank offers its 0.73
services
I often find solutions to my problems together 0.86
with Bank
I am actively involved when Bank develops new 0.85
solutions for me
Bank encourages customers to create solutions 0.81
together
Brand Overall, I am satisfied with Bank 0.94 0.92 0.93 0.81
satisfaction Being a customer of Bank has been a good choice 0.94
for me
Bank has lived up to my expectations 0.83
Brand I intend to stay loyal to Bank in the future 0.94 0.94 0.94 0.84
loyalty I intend to stay on as a customer of Bank for the 0.92
next five years
I intend to recommend Bank to other people 0.88

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Influences of co-creation on brand experience

expectations’ (e.g. Fornell 1992). Finally, brand loyalty was also measured
by three items reflecting intended loyalty in the future (e.g. Brakus et al.
2009), intention to keep on being a customer of the Bank for the next five
years (e.g. Pedersen & Nysveen 2001), and intention of recommending the
Bank to others (e.g. Brakus et al. 2009).
Confirmatory factor analysis of the measurement model of the
independent, mediating and dependent variables showed reasonably good
fit (chi/df = 6.93, CFI = 0.93, RMSEA = 0.079), and factor loadings for
all items are shown in Table 2. Two of the standardised loading estimates
for the co-creation construct and one for the cognitive experience
construct were below 0.7, but still considerably higher than the lowest
acceptable level of 0.5 suggested by Hair et al. (2006, p. 779). Thus, the
construct validity of the measurement model was considered acceptable.
This is further supported by the acceptable levels on Cronbach’s alpha
(a) and construct reliability (CR) shown in Table 2 for all constructs,
as well as the positive difference between construct reliability (CR) and
average variance extracted (AVE) for all constructs. Further analysis of
the measurement model showed acceptable discriminant validity for all
constructs except the behavioural and affective dimensions of the brand
experience construct. For this construct the average correlation between
items and construct was the same as the correlation between behavioural
and emotional dimensions of brand experience. Similar findings were
made on the sensory and emotional dimensions by Brakus et al. (2009),
but to avoid loss of fit they retained the four-factor structure of their
construct. For the same reason and to ensure comparability with
previous studies, we also chose to retain the behavioural and emotional
dimensions as separate constructs in the measurement model. All items
were measured using 7-point Likert scales indicating agreement with
the item statements. We applied one of the principles for investigating
common method bias suggested by Podsakoff et al. (2003) and found
no single factor accounting for more than 50% of the variance (Harmon
test).

Results
Hypotheses were tested with structural equations modelling using AMOS
19. We estimated a structural model investigating the relationship between
co-creation and the five brand experience dimensions. The model also
included relationships between all brand experience dimensions and brand

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Sensory 0.11

0.45**

–0.11
Affective
0.48** Satisfaction

0.82**
–0.35** –0.04
0.41** 0.11*
Co-creation Cognitive
0.02
Loyalty
0.69** 0.10**
0.45**
–0.06

Relational
0.57**
0.09

Behavioural

Notes: N = 957; χ2/df = 6.99; CFI = 0.93; RMSEA = 0.08

Figure 2 Empirical results

satisfaction and loyalty. Figure 2 shows the results of this analysis along
with a model fit summary.
As expected from the measurement model fit results, the structural
model also showed good fit (χ2/df = 6.99, CFI = 0.93, NFI = 0.92 and
RMSEA = 0.079). As can be seen from Figure 2, co-creation has
a significant positive influence on all of the five brand experience
dimensions, supporting H1–H5, and indicating that co-creation stimulates
strong experiences along all five dimensions. However, interesting and
somewhat surprising results appear when we look at the influences of the
brand experience dimensions on brand satisfaction. The relational brand
experience dimension has a positive influence on brand satisfaction as
postulated in H6a. However, the cognitive experiential dimension has a
significant negative influence on brand satisfaction. This result is in the
opposite direction of what was postulated in H6a and shows the complexity
of managing brand experiences. No influence was revealed for sensory,
affective or behavioural experience on brand satisfaction. Consequently,
we cannot conclude with support for H6a. The affective and relational
experiential dimensions have a positive influence on brand loyalty while no

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Influences of co-creation on brand experience

influence was revealed for the three other experience dimensions on brand
loyalty. This means we can conclude with only partial support for H6b.
The model in Figure 2 is based on the assumption that H7, suggesting
that brand experience fully mediates the effects of co-creation on brand
satisfaction and loyalty, is supported. To test this hypothesis, the model in
Figure 2 was compared to a model including direct effects of co-creation
on brand satisfaction and loyalty. According to Holmbeck (1997) and
Baron and Kenny (1986), full mediation would imply that the addition
of the direct paths between co-creation and brand satisfaction and loyalty
would be insignificant and that this model would not show significantly
improved fit. The model including direct and indirect effects is shown in
Figure 3, including a summary of fit statistics. This model shows better
fit than the model in Figure 2 (χ2/df = 6.94, CFI = 0.93, NFI = 0.92
and RMSEA = 0.079), as the difference in fit between the two models
(χ2diff = 31.4, d.f. = 2) is significant. In addition, the results show
direct positive influences of co-creation on both satisfaction and loyalty.
This indicates that H7 must be rejected, and suggests that the effects of
co-creation are only partially mediated by brand experience. Applying
the principles of Holmbeck (1997) and Baron and Kenny (1986) to
further investigate partial mediation versus no mediation, we found
that eliminating the mediating effect of co-creation through brand
experience significantly worsens the fit of the model (χ2diff = 328.9,
d.f. = 5). From this we conclude that we must retain the partially
mediating model as the best model and reject H7 on full mediation. We
also see that the mediating paths in Figure 3 differ from those of Figure
2 in that the sensory dimension has a positive influence on satisfaction
while the affective dimension is revealed to have a negative influence on
satisfaction. Also, the affective dimension does not significantly influence
loyalty in this model.
To conclude, there are direct influences of co-creation on both
satisfaction and loyalty that are not mediated through the brand experience
dimensions. There are also indirect influences of co-creation on satisfaction
and loyalty through the brand experience dimensions, but these influences
are only significant through a few of the brand experience dimensions.
The partial mediation model is also further substantiated by the fact that
co-creation, although it significantly influences all five brand experience
dimensions, explains only between 17 and 32% of the variance in the
experience dimensions.
Finally, the influence of brand satisfaction on brand loyalty was strongly
significant, supporting H8.

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 International Journal of Market Research Vol. 56 Issue 6

Sensory 0.13* 0.18**

0.45**

–0.15*
Affective
0.48** Satisfaction

0.81**
–0.36** –0.03
0.42** 0.09
Co-creation Cognitive
0.02
Loyalty
0.60** 0.08*
0.45**
–0.06

Relational
0.06*
0.56**
0.09

Behavioural

Notes: N = 957; χ2/df = 6.94; CFI = 0.93; RMSEA = 0.08

Figure 3 Empirical results including direct effects of co-creation on satisfaction and loyalty

Conclusions and implications

Our results show that co-creation has a positive influence on all five brand
experience dimensions. This implies that engaging in co-creation activities
with the customers strengthens the brand experience. When looking into
the individual influences of the brand experience dimensions on brand
satisfaction and brand loyalty, the implications are more complex. The
results show positive influences of sensory and relational experiences on
satisfaction, and indicate that managers should stimulate sensory and,
in particular, relational experiences through co-creation to build brand
satisfaction. However, cognitive and affective experiences have a negative
influence on brand satisfaction. This results from the fact that strong
brand experience dimensions may be both positive and negative in valence
(Brakus et al. 2009). From our results it seems that, for consumer banking
brands, cognitive and affective brand experiences typically have a negative
valence. Furthermore, our results suggest that, when such brand experiences
are generated through co-creation, they may reduce consumers’ brand

825
Influences of co-creation on brand experience

satisfaction. One interpretation of these results is that brands should be

very careful with how they stimulate cognitive and affective experiences
through co-creation. The cognitive activities of co-creation may be too
demanding for the consumers, leaving them with a high level of frustration
and a negative cognitive brand experience. Also, it seems like strong
affective experiences have a negative valence, indicating a need to attend
to participants’ emotional needs to a higher degree in co-creation activities.
Only the relational brand experience dimension influences brand loyalty
directly. We also see that the negative influence of affective and cognitive
experience on brand satisfaction is not revealed for brand loyalty. Satisfaction
is a somewhat more immediate response, while loyalty is a long-term construct.
Suh and Yi (2006) argue that satisfaction is temporary and significantly
influenced by more recent experiences. Given switching costs, it is reasonable
to assume that the loyalty construct is more stable than satisfaction, and that
the negative influence of affective and cognitive brand experience therefore
does not influence loyalty as strongly as satisfaction. One possible explanation
is that the negative influence of affective and cognitive experiences on
satisfaction is – although negative – not strong enough to make consumers
switch to a different brand. We also know that bank customer loyalty is
relatively strong compared to customer loyalty in other service sectors in
Norway. About 10% have switched bank in the last 12 months, compared to a
14% churn rate for providers of electricity, 17% for insurance providers, and
15% for telecom providers (Lavik & Schjøll 2012). Consequently, negative
experiences have to be relatively severe to make consumers leave their bank.
Based on our findings, it is important to underline the significance of the
relational brand experience dimension. It has a strong positive influence
on both brand satisfaction and brand loyalty. The relational experience
dimension was not included in the Brakus et al. (2009) framework, but
was added for the purpose of this study as co-creation by definition is a
relational construct indicating the significance of relational experiences.
The significant influences of relational experience revealed in this study
on both satisfaction and loyalty underline the importance of stimulating
relational experiences in co-creation to gain competitive advantages
through increased satisfaction and loyalty.
The results show that the best model includes both direct and
indirect influences of co-creation on satisfaction and loyalty. Thus,
the effects of co-creation are partly indirect and partly direct. This
indicates that co-creation can influence both satisfaction and loyalty
directly, in addition to the indirect effects it has in creating strong
brand experience. This is good news for service providers that engage

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in co-creating activities with their customers through social media

and other co-creation platforms. For example, banks seem to be able
to increase satisfaction and loyalty through co-creation both through
the co-creation activities themselves as well as through the brand
experiences this activity gives customers.

Future research
The concept of brand experience is interesting and seems to be important
for both brand satisfaction and brand loyalty. According to Zwass (2010,
p. 38), ‘The economic outcomes of co-creation are significant and keep
growing.’ One interesting path for future research is to combine the
model proposed by Brakus et al. (2009) with financial measures of brand
performance. The interesting element would be to see if brand experiences
transform into higher revenue or profit, and if the model proposed by
Brakus et al. (2009) – and partly used in this article – mediates potential
effects of co-creation on brand revenue and profit.
The relational brand experience dimension showed significant influence
on both brand satisfaction and brand loyalty. This illustrates the importance
of doing more work on the dimensionality of brand experience to make
sure all relevant brand experience dimensions are included in the brand
experience framework. Brakus et al. (2009) used four dimensions in their
work, while the framework applied in this study added the relational
experience dimension to the dimensions used by Brakus et al. (2009).
Looking at Gentile et al. (2006), they proposed six experiential dimensions.
One direction for future research is to dig deeper into potential dimensions
of relevance for the experience construct, and also to increase our
understanding of the relevance of each of them in various contexts and for
various customer segments.
An interesting observation is presented by Hollebeek (2011b), who
proposed that the positive influence of customer–brand engagement on loyalty
may vary across customer segments. The main argument is that a high level
of engagement may lead to customer fatigue and detachment from the brand.
The whole model applied in this article should therefore be investigated across
various customer segments for the purpose of identifying the segments where
co-creation stimulation is most relevant. We also observe that bank customers
are relatively loyal. Consequently, we may expect that co-creation has to
stimulate rather strong experiences to influence bank customers’ loyalty. This
calls for validation of the framework applied in this article also in other service
contexts with relatively lower customer loyalty levels.

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Influences of co-creation on brand experience

The scale applied in this study is measuring the strength of the brand
experiences, following the measures proposed by Brakus et al. (2009). We
do want to underscore the importance of including valence measures in
future research, as also pointed out by Brakus et al. (2009). One direction
may be to divide more clearly between measures of the strength and the
valence of the brand experience dimensions in future work. The direction
of the effects we identified for the cognitive and affective brand experience
dimensions also suggests further investigations along these lines. Whereas
the direction of the effects of the cognitive dimension of brand experience
suggests an inverted U-shaped relationship between cognitive experience
strength and valence, the findings for the affective dimensions suggest
that strength and valence may be independent elements of an affective
brand experience. Further investigations along these lines will give us a
better understanding of the connections between valence and strength
of experiences as predictors of satisfaction and loyalty in a similar way
as multi-attribute models include both the evaluation and the strength of
beliefs as antecedents of attitudes (Fishbein & Ajzen 1975).
Co-creation can take place at various stages of a relationship between
customers and brands – from ideation to usage (Füller et al. 2010; Zwass
2010). Also, Payne et al. (2008) look at co-creation as a process involving
many types of activity. This study has looked at how co-creation as a general
construct can influence brand experiences. To get a better understanding
of the effect of co-creation, it would be interesting to look into the effect
of co-creation on the brand experience dimensions at various stages of the
relationship between customers and brands.
We apply a logic where brand engagement stimulated by co-creation
influences brand experiences and, through that, brand satisfaction and
loyalty. This is a reasonable approach for customers who do not have a
strong relationship with the brand. This line of causality from co-creation
and/or engagement on attitudinal constructs such as satisfaction and/or
loyalty is also applied in existing research (Hoyer et al. 2010; Mollen &
Wilson 2010; Hollebeek 2011b). For customers with a strong relationship
with the brand, brand experiences and brand satisfaction and loyalty can
influence both co-creation activities and brand engagement (Doorn et al.
2010; Brodie et al. 2011b). This potential causal circularity is explicitly
illustrated by both Brodie et al. (2011b) and Hollebeek (2011b). The
reasoning behind the causal flow for new customers is described deeply in
this paper. On the other hand, customers with an existing and deep level of
loyalty to the brand usually have intellectual, emotional and social bonds to
the brand. They are also prone to take action to keep up their relationship

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with the brand (Oliver 1999). As a result of this, loyal customers may be
more prone to engage in co-creation with the brand for the purpose of
creating mutual value for both the brand and themselves. To improve our
understanding of the causal flow between the constructs, future studies
should use experimental designs to control and test individual causal paths
as well as their interrelationships. Brand engagement is used as a theoretical
explanatory mechanism in this article to argue for the relationship between
co-creation and brand experiences. Future research should include
measures of brand engagement as part of the empirical research model, and
test its explanatory power through both experimental and survey designs.
An interesting debate is going on about customer engagement and
its dimensions. Brodie et al. (2011a) and EConsultancy (2008, cited in
Mollen & Wilson 2010) take a multidimensional perspective including
both psychological and behavioural dimensions, while Doorn et al. (2010)
propose a behavioural perspective. Although engagement is used only as
a theoretical explanation for potential effects of co-creation in this paper,
the results may indicate interesting paths for future research in the debate
on engagement as a behavioural or psychological construct. A perspective
including psychological and behavioural dimensions of engagement reflecting
the dimensions of brand experiences would be an interesting approach for
future studies exploring brand engagement as a multidimensional construct
mediating the effect of co-creation on brand experiences, satisfaction and
loyalty. The results from this study show that co-creation influences brand
satisfaction both directly and through psychological mechanisms of brand
experience. This may indicate that psychological dimensions of brand
engagement mediate the effect of co-creation on the brand experience
dimensions, while both psychological and behavioural dimensions of
engagement may mediate effects of co-creation on satisfaction and
loyalty. This calls for further investigation of the role of customers’ brand
engagement in the nomological network of brand experience.

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About the authors

Herbjørn Nysveen is a professor in Marketing at the Department for
Strategy and Management, Norwegian School of Economics (NHH). His
research interests are adoption of services, brand experiences and research
topics related to self-service technologies.
Per Egil Pedersen is Professor of Service Innovation at Buskerud and
Vestfold University College and Adjunct Professor at Norwegian School
of Economics (NHH). His main publications are in the areas of consumer
behaviour and business models in online and mobile services, and in
service innovation. In 2012, Pedersen established the Center for Service
Innovation (csi.nhh.no) at NHH. His ongoing research projects focus on
innovation in service systems.
Address correspondence to: Herbjørn Nysveen, Norwegian School of
Economics, Department for Strategy and Management, Helleveien 30,
5045 Bergen, Norway.
Email: herbjorn.nysveen@nhh.no

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