* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Service-Dominant Logic:What It Is and What It Is Not
Youth marketing wikipedia , lookup
Guerrilla marketing wikipedia , lookup
Digital marketing wikipedia , lookup
Multi-level marketing wikipedia , lookup
Viral marketing wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Advertising campaign wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Value proposition wikipedia , lookup
Marketing plan wikipedia , lookup
Sensory branding wikipedia , lookup
Multicultural marketing wikipedia , lookup
Direct marketing wikipedia , lookup
Street marketing wikipedia , lookup
Green marketing wikipedia , lookup
Marketing strategy wikipedia , lookup
Marketing channel wikipedia , lookup
Services marketing wikipedia , lookup
S-D Logic Service-Dominant Logic: What It Is and What It Is Not Presentation to the Otago Forum on Service-Dominant Logic November 21, 2005 Stephen L. Vargo, University of Hawaii at Manoa Robert F. Lusch, University of Arizona Precursors S-D Logic Historical treatment of services Smith’s (1776) bifurcation Bastiat’s (1848) reconsideration “Services are exchanged for services…it is the beginning, the middle, and the end of economic science” Goods as distribution mechanisms for service Goods as embodied knowledge Strategic Role of Resource Management Uneasiness with Dominant Model S-D Logic What is needed is not an interpretation of utility created by marketing, but a marketing interpretation of the whole process of creating utility” (Alderson, 1957) “The historical marketing management function, based on the microeconomic maximization paradigm, must be critically examined for its relevance to marketing theory and practice.” Webster (1992) “The exchange paradigm serves the purpose of explaining value distribution (but) where consumers are involved in coproduction and have interdependent relationships, the concern for value creation is paramount…There is a need for an alternative paradigm of marketing.” Sheth and Parvatiyar (2000) “The very nature of network organization, the kinds of theories useful to its understanding, and the potential impact on the organization of consumption all suggest that a paradigm shift for marketing may not be far over the horizon.” Achrol and Kotler (1999) A Partial Pedigree S-D Logic Services and Relationship Marketing Theory of the firm (Prahald and Hamel (1990); Day 1994) Resource-Advantage Theory and ResourceManagement Strategies Penrose (1959) Core Competency Theory e.g., Shostack (1977); Berry (1983); Gummesson (1994) ; Gronroos (1994); etc. Hunt (2000; 2002); Constantine and Lusch (1994) Network Theory Service S-D Logic The application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (self-service) Shift in Focus from Operand to Operant Resources S-D Logic Operand Resources Resources upon which an operation or act is performed to produce an effect primarily physical resources, goods, etc Operant Resources Resources that produce effects e.g., primarily knowledge and skills— competences Evolution of Marketing Thought S-D Logic To Market (Matter in Motion) Market To (Management of Customers & Markets ) Through 1950 1950-2005 Market With (Collaborate with Customers & Partners to Create & Sustain Value) 2005+ Foundational Premises S-D Logic FP1. The application of specialized skill(s) and knowledge is the fundamental unit of exchange. FP2. Indirect exchange masks the fundamental unit of exchange. Service (application of skills and knowledge) is exchanged for service Micro-specialization, intermediaries, and money obscure the service-for-service nature of exchange FP3. Goods are distribution mechanisms for service provision. “Activities render service; things render service” (Gummesson 1995) : goods are appliances Foundational Premises (2) S-D Logic FP4. Knowledge is the fundamental source of competitive advantage FP5. All economies are service economies. Operant resources, especially “know-how,” are the essential component of differentiation Service only now becoming more apparent with increased specialization and outsourcing FP6. The customer is always a co-creator of value. There is no value until offering is used— experience and perception are essential to value determination Foundational Premises (3) S-D Logic FP7. The enterprise can only make value propositions. FP8. A service-centered view is inherently customer oriented and relational Since value is always determined by the customer (value-inuse)—it can not be embedded through manufacturing (value-in-exchange) Operant resources being used for the benefit of the customer places the customer in the center of value creation and implies relationship. FP 9. Organizations exist to combine specialized competences into complex service that is demanded in the marketplace. The firm is an integrator of macro and micro-specializations 10 Evolving Toward a Service-Dominant Lexicon S-D Logic G-D Focus Operand Resources Tangible Value Added Goods Products Transactional Units of Output Promotion Brand Equity Profit Maximization S-D Focus Operant Resources Intangible Co-creation of value Service Experiences Relational Processes Conversation/Dialog Customer Equity Financial Feedback Difficult Conceptual Transitions S-D Logic Goods-Dominant Concepts Transitional Concepts Service-Dominant Concepts Goods Services Service Products Offerings Experiences Feature/attribute Benefit Solution Value-added Co-production Co-creation of value Profit maximization Financial Engineering Financial feedback/learning Price Value delivery Value proposition Equilibrium systems Dynamic systems Complex adaptive systems Supply Chain Value-Chain Value-creation network/constellation Promotion Integrated Marketing Communications Dialog To Market Market to Market with Product orientation Market Orientation Service-Dominant Logic (Consumer and relational) 12 Why Service? S-D Logic Accuracy: It is precisely service that we are talking about What is exchanged is the “application of specialized knowledge and skills (competences) for the benefit of another party”—i.e., Service Thought-leadership: Service marketing concepts and insights transforming marketing thought Transaction → Relationship (Manufactured) Quality → Perceived (Service) Quality Brand Equity → Customer Equity Consumer → Prosumer (co-producer of value) 13 Why Service? S-D Logic Continuity: Does not require rejecting the exchange paradigm Just change in focus from units of outputs to processes Normatively Compelling: The purpose of economic exchange is mutual service Implies managerial, macro, and ethical standards Implications of a “ServiceExchanged-For-Service” Paradigm S-D Logic Academic Unifying—organized around the common denominator (mutual service provision) Unique Marketing Origin—internally generated, rather than inherited Resource-Centered—builds on relative resource-expanding nature of operand vs. resource-depleting nature of operant resources Value-defining—shifts focus to value-in use Logically Divisible--Allows sub-discipline of direct service provision Promotes research—provides clear links among firm, customer, society, value, etc Micro implications—Makes service-based concepts central/applicable to marketing IHIP as it applies to value creation/all of marketing Macro implications—Social role of Marketing Value–creating Resource-expanding 15 Implications of a “ServiceExchanged-For-Service” Paradigm S-D Logic Practice Managerially compelling—focuses on mission (service) Promotes social responsibility Marketing has social purpose Education Easily understandable—requires fewer “adjustments” Demands customer orientation/value-in-use Implies relationship marketing Role of operant resources Implies better customer experiences/fairer treatment Normative prescripts (e.g., customer orientation/relationship) implied by framework Inviting—increased attractiveness off discipline Society Promotes social responsibility—purpose is to: Serve individuals/society/organizations Facilitate value enhancement/resource expansion through exchange An S-D Logic Definition of Marketing S-D Logic Marketing is the process in society and organizations that facilitates voluntary exchange through collaborative relationships that create reciprocal value through the application of complementary resources. Therefore marketing can be viewed as the means by which societies are able to create value through the voluntary exchange of knowledge and skills. What S-D Logic is Not S-D Logic Reflection of the transition to a services era Justified by the Superior Customer Responsiveness of “Service” Companies Restatement Of The Consumer Orientation Alternative To The “Exchange Paradigm” Equating Service with Provision of “Functional Benefits” Suggesting that Financial Feedback equals Profit Applicable only to marketing management What S-D Logic Might be S-D Logic Foundation of a paradigm shift in marketing Basis for a General Theory of Marketing Reorientation for economic theory Foundation for theory of the firm Perspective for understanding role of markets in society—Theory of Markets S-D Logic Thank You! For More Information on S-D Logic visit: sdlogic.org We encourage your comments and input. If you would like your working papers or teaching material and/or links to your research displayed on the website, please e-mail us Steve Vargo: [email protected] Bob Lusch: [email protected] S-D Logic Can Direct Macro/Public Policy S-D Logic From goods to service(s). Tax policy to encourage firms to retain tangible goods and sell service flows? From tangible to knowledge resources. Tax policy to encourage investments in education and skill development vs. housing. From operand to operant From value in exchange to resources. value in use. Public policy to Public data collection on encourage collaboration vs. value in use and home competition. production. The Inversion S-D Logic Goods Logic Service Products (processes—applied competences) (units of output) Goods Service Logic Services Indirect (Intangible goods) (Goods--Appliances) Direct