Transcript "Relationship: Toward Service-Dominant Logic Transcendence

Relationship: Toward Service-Dominant
Logic Transcendence and Unification
S-D
Logic
Presentation to
Relationship Marketing Summit
December 13, 2007
Robert F. Lusch, University of Arizona
Stephen L. Vargo, University of Hawai’i at Manoa
What We Want to Accomplish
S-D
Logic
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Evidence of Goods-Dominant Logic
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Review & Update on S-D Logic
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S-D logic as a unifying framework for
relationship/marketing
Reflections of the
Goods-Dominant Model
S-D
Logic
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Goods-Dominant logic: Make and sell units of output
Latent evidence
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Marketing is:
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The “creation of utilities” (Weld)
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Concerned with value distribution
Orientations
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Production and Product
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Evidence of decoupling of thought
Alderson’s admonition:
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Evidence of problem vs. correction
Marketing Management and Consumer Behavior
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Manufacturing and distribution as value-added
Consumer Orientation
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Time, place, and possession
“production function”
“What is needed is not an interpretation of the utility created by
marketing, but a marketing interpretation of the whole process creating
utility.”
Sub-disciplinary Divergences
Relationship Marketing
Sub-disciplinary Divergences and
Convergences
S-D
Logic
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Business-to-Business Marketing
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From differences
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To emerging new principles
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From differences:
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Inseparability, heterogeneity, etc.
To emerging new principles:
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Interactivity, relationship, network theory, etc
Service(s) Marketing
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Derived demand, professional buyers, fluctuating demand, etc
Relationship, perceived quality, customer equity, etc.
Other Sub-disciplines
Other Intra-marketing initiatives
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e.g., interpretive research, Consumer culture theory, etc.
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From deterministic models to emergent properties
From products to experiences
From embedded value to individual meanings and life themes/projects
A Partial Pedigree for S-D Logic
S-D
Logic
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Services Marketing
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e.g., Shostack (1977);
Relationship Marketing
 Berry (1983); Gummesson (1994) ; Gronroos (1994); etc.
Theory of the firm
 Penrose (1959)
Core Competency Theory
 (Prahalad and Hamel (1990); Day 1994)
Resource-Advantage Theory and Resource-Management
Strategies
 Hunt (2000; 2002); Constantin and Lusch (1994)
Network Theory
 (Hakansson and Snehota 1995)
Interpretive research and Consumer Culture theory
 (Belk, Wallendorf, Sherry 1989; Wallendorf & Arnould 1991)
Co-creation, Customer, competence/experience
 (Prahalad and Ramaswamy 2000)
Evolving…Service-Dominant Logic
S-D
Logic
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Service, rather than goods, as the basis of economic and social
exchange
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i.e., Service is exchanged for service
Essential Concepts and Components
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Service: the application of competences for the benefit of another
entity
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Shifts primary focus to “operant resources” from “operand
resources”
Value always co-created
Sees goods as appliances for service delivery
Implies all economies are service economies
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Service (singular) is a process—distinct from “services”— particular
types of goods
All businesses are service businesses
Operates at paradigmatic, pre-theoretical level
S-D Radically Challenges
Core Assumptions
S-D
Logic
G-D
S-D
Customer and
Environments
as Exogenous
Customer and
Environments
as Endogenous
Firms Create
Value
Value is CoCreated
Operand
Resources are
Paramount
Operant
Resources are
Paramount
Management of
Marketing Mix
Co-Creation of
Marketing Mix
Relationships
are Repeated
Encounters
Relationships
are Embedded
Maximize
Profits
Profits are
Learning Loop
The Evolution of Marketing
S-D
Logic
To Market
(matter in motion)
Through 1950
Marketing To
(management of
customers &
markets)
1950-2010
Marketing With
(collaborate with
customers & partners
to produce &
sustain value)
Future
Revised Foundational Premises
S-D
Logic FP1
The application of specialized
Service is the fundamental basis of
skill(s) and knowledge is the
exchange.
fundamental unit of exchange.
FP2
Indirect exchange masks the
Indirect exchange masks the
fundamental unit of exchange. fundamental basis of exchange.
FP3
Goods are a distribution
mechanism for service
provision.
Goods are distribution mechanisms
for service provision.
FP4
Knowledge is the fundamental
source of competitive
advantage
Operant resources are the
FP5
All economies are services
economies.
All economies are service economies.
fundamental source of competitive
advantage
Revised Foundational Premises
S-D
Logic
FP6
The customer is always a coproducer
The customer is always a cocreator of value
FP7
The enterprise can only make
value propositions
The enterprise can not deliver
value, but only offer value
propositions
FP8
A service-centered view is
customer oriented and
relational.
A service-centered view is
inherently customer oriented and
relational.
FP9
Organizations exist to integrate All economic and social actors
and transform microspecialized are resource integrators
competencies into complex
services that are demanded in
the marketplace
FP10
Value is always uniquely and
phenomenological determined
by the beneficiary
S-D Marketing
S-D
Logic
Co-Create
Service
Offering
CUSTOMERS
&
PARTNERS
• Overcome
Internal
Resistances
Co-Create
Value
Processes &
Networks
CUSTOMERS
• Draw Upon
Internal
Resources
• Draw Upon
External
Resources
Co-Create
Value
Proposition
PARTNERS
Co-Create
Conversation
& Dialogue
• Overcome
External
Resistances
The Nature of Coproduction and Cocreation
S-D
Logic
Integration
With PublicFacing Resources
Direct
Service
Provision
Provider of
Operand &
Operant
Resources
Coproduction
Service
Provision
via Goods
Service
Beneficiary
Cocreation
Integration
With PrivateFacing Resources
Value in
Context
Service Exchange through Resource
Integration and Value Co-creation
S-D
Logic
Resource
Integrator/
Beneficiary
(“Firm”)
Resource
Integrator/
Beneficiary
(“Customer”)
Common Misconceptions
S-D
Logic
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A Theory
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A Reflection of the transition to a services era
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In S-D logic, all economies are service economies and all
businesses are service businesses
Restatement Of The Consumer Orientation
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S-D logic is a logic, an approach, a lens, but not a theory
Could be foundation for a general theory of the market and
marketing
Consumer orientation is evidence of G-D logic, not a fix to it
Consumer orientation is implied by S-D logic
Alternative To The “Exchange Paradigm”
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Problem with exchange paradigm is notion of exchange of
output, not the notion of exchange
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At issue is the “transaction,” not exchange
Exchange is a relational concept -- reciprocity
S-D logic says service (a process) is exchanged with service
Relationship Orientations
S-D
Logic
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G-D Logic
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Positive: repeated transactions (encounters)
Normative: Hug your customer and channel partners
S-D Logic
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Positive
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Relationship inherent (FP8)
Service as benefit – provided by one party, determined by the
other
Service as reciprocal
Value as co-created
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Network-with-network
Value as phenomenological: “value-in-use” and “value-incontext”
Economic (and social) actors as resource integrators
Normative: collaborate and co-create for mutual benefit
The New Geometry of Marketing?
S-D
Logic
External
Resources
RI
Resistances
Resistance Reduction
Resource
Integration
Exchange
RI
Change
Resistances
Customers
Value Co-Creation
RI
Resistances
Stakeholders
S-D
Logic
Thank You!
For More Information on S-D Logic visit:
sdlogic.net
We encourage your comments and input. Will also post:
• Working papers
• Teaching material
• Related Links
Steve Vargo: [email protected] Bob Lusch: [email protected]
Service Exchange through Resource
Integration and Value Co-creation
S-D
Logic
Resource
Integrator/
Beneficiary
(“Firm”)
Resource
Integrator/
Beneficiary
(“Customer”)
Organizations Evolving to be
Service-Dominant
S-D
Logic
Slow Thinking
Quick
Thinking &
Slow
Responding
Analyze,
Plan &
Control
Slow Acting
Fast Acting
ServiceEcosystem
Bureaucracy
Sense,
Reflect,
Realize, &
Learn
Slow
Thinking &
Quick
Responding
Fast Thinking
Source: Lusch
& Webster
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
Marketing to
Marketing with
Product orientation
Market Orientation
Service-Dominant Logic
(Consumer and relational)
20
Marketing as Resource Integration
S-D
Logic
Market
Facing
Resources
Resource
Integration
Non-Market
Facing
Private
Resources
Non-Market
Facing
Public
Resources
Breadth of Knowledge Integration
S-D
Logic
Category
Time Cited/Mentioned
Social Science Citation Index
65
Business Source Premier
105
Google Scholar
264
Google.com
550
Conferences* (call for papers and presentations)
22
Marketing Courses* (subjects and reading lists)
13
Website Posts* (e.g., blogs)
172
*as of December 2006
Integration in Marketing Literature
S-D
Logic
Citations
JM
8
JPPM
6
JSR
4
JBM
IJSIM
2
0
IMR
EJM
MS
IMM
JR
JBR
Numbers based on Social Science Citation Index.
Journal of Marketing (7)
Journal of Service Research (7)
International Journal of Service
Industry Management (7)
European Journal of Marketing (5)
Industrial Marketing Management (5)
Journal of Business Research (4)
Journal of Retailing (3)
Marketing Science (3)
International Marketing Review (2)
Journal of Business-to-Business
Marketing (2)
Journal of Public Policy & Marketing (2)
Main Sub-themes of Integration
S-D
Logic
Three main sub-themes underlying the knowledge
integration focus on core concepts of S-D logic:
Theory
Management
20
15
10
5
0
Institutions
Exchange
Commodoties
Macro
SDL meaning of service
Resource-based
perspective
Process of value cocreation
C.B.
The categorization is adapted from marketing schools of thought presented by Shaw and Jones (2005). The
numbers represent selected citations relating to or elaborating upon S-D logic (Vargo and Lusch 2004).
Service-Dominant Logic:
Toward the Unification of Marketing
S-D
Logic
Presented by:
Robert F. Lusch, University of Arizona
Stephen L. Vargo, University of Hawaii
Presented to: Relationship Marketing Summit
Buenos Aires, Argentina
December 13, 2007
THANK YOU
S-D
Logic
For more information on S-D logic visit:
sdlogic.net
For permission to use any information in
these slides please e-mail:
[email protected] or
[email protected]