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Local Motors Marketing in a Digital World

by Prof. Aric Rindfleisch

Rally Fighter, image retrieved
authorized by Local Motors.

Purpose: Core Issue:
The purpose of this case study is to illustrate and apply Local Motors has used co-creation to design the Rally
the concept of customer co-creation to an actual business Fighter. Now it needs to successfully market it and find
case. a sustainable value proposition.

Background: Questions:
Local Motors is a new start-up vehicle manufacturer. It
1. What type of co-creation is Local Motors
was founded in 2007 by Jay Rogers, who came up with
the idea while he was an MBA student at Harvard
2. What do you think of the Rally Fighter? Will
Business School. The company is located in Chandler,
this new car be successful? Why or why not?
Arizona and is currently selling a variety of motorized
3. What is Local Motors’ value proposition?
vehicles, including an automobile called the “Rally
Fighter.” This vehicle has both normal driving and off-
road capabilities and sells for about $100,000. It was
created using the principle of customer co-creation and
buyers play an active role in building their own car. At
this point in time, Local Motors is manufacturing the
Rally Fighter and is eagerly seeking more customers.

while a few students really love it and think it is amazing. In addition. the submissions come in the form of physical labor. it used co- designing to obtain the basic Rally Fighter design as Image retrieved from https://localmotors. Local website. Concept Application: This is an excellent example of the concept of customer co-creation. More broadly. we typically value Motors has realized that their distinctive advantage is customers based on either their past purchasing their worldwide community of designers. well as its various accessories. Local Motors by a unemployed college student. Thus. Non-customers can also be valuable assets to a created bicycles and motorcycles. In recent years. and plans on its Pizza and the US Department of Defense. Local Motors also appears to be printed car during a Chicago manufacturing expo. Local Motors appears to employs multiple co-creation techniques. Most don’t like the Rally Fighter at all and don’t see its appeal. from a pure sales ideas from those outside the firm. and Local Motors. the Rally Fighter was quite successful in a car. terms of generating substantial attention for Jay Rogers Your contributors may not be your customers. this product has not been a success. Thus. although in this case. sharing all of its designs. by freely authorized by Local Motors. Lesson Learned: Recent Developments: 1. by Motors is exploring new digital manufacturing requiring its customers to actually engage in the car techniques and recently printed the world’s first 3D building process. it also encourages Tinkering. 4. the student reaction is quite mixed. Finally. perspective. In marketing. engaging in a form of Submitting. Domino’s money. Anything can be co-created. you can co-create just about anything. 2. Finally. This case now positioning itself as a co-creation design platform shows that individuals can provide valuable and has drawn attention from a number of large firms contributions to a firm by offer ideas instead of and government agencies including Reebok. has expanded its product line as is developing co. 2 . Local firm. For example. it is behavior or future purchase promise. including several magazine articles The design for the Rally Fighter was submitted and television interviews.1 2 Case Study Typical Student Reaction: When I teach this case. Traditional innovation practices are less than As of early January 2014. Local Motors has sold less ideal because they greatly restrict the flow of than 100 Rally Fighters. If you can co-create However. components. • 3 sxsw/) • “TWIST Rally Fighter” (https://www.000 Race Car” (http://www.Case study Resources: • “How the Internet Built a $100.