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Paper 1: Service Dominant LogicWhat is Service-dominant logic and compare it to the goods-dominant
logic?
Service-dominant logic
= A marketing concept that supports that all economic interactions involve services
= So they state that even products offer a certain service to the customer
= Services/intangibles are the key interest in an exchange
= It’s a customer-centric phenomenon that visualizes him/her as a value co-creator =>So
focus is on co-creation of value through interactions between customers and service
providers
= This new era in marketing will also help the consumer to develop different emotions and
experiences, making the customer journey a totally complete experience
Example: Nike
- Nike’s way of marketing could be an example of this new era of marketing
- They give the customer the opportunity to customize their products as they want so
evolving them in the designing procedure of the product as a value co-creator
- Also when a customer buys their products they are buying a complete experience not
only related to the values of the brand (like respect, passion) but also related to an
active and stimulating lifestyle
Example: Uber
- Uber customers can qualify drivers in order to give info to other customers about the
quality
- Customers can also provide opinions & comments which allows Uber to improve the
service and quality
Comparison with goods-dominant logic
With the goods-dominant logic products are the center of importance <=> With the
service-dominant logic services are the center of importance
6 differences between goods-dominant or traditional dominant logic (GDL) &
service-dominant logic or emerging dominant logic (SDL)
1. Primary unit exchange
- GDL : people exchange for goods and these goods serve as operand resources
(operand resources = those who represent tangible resources like economic
resources, products and raw materials)
- SDL: people exchange to get benefits from products such as skills and knowledge
which are operant resources (operant resources = those that produce effect by
themselves like physical (emotions), social (personal relationships) or cultural effects
(knowledge and skills)
, 2. Role of goods
- GDL: goods are end products and operand resources and marketers try to change
their form, place, time and possession
- SDL: goods are transmitters of operant resources (embedded knowledge) so they
are intermediary products that are used by other operant resources (customers) in
the process of value creation
3. Role of customer
- GDL: customers receive goods and marketers are the ones who segment, penetrate,
distribute and promote them, the customer is an operand resource
- SDL: the customer is a co-producer of service and marketing turns into a process
that carries out actions interacting with the customer, the customer is an operant
resource that sometimes occasionally works as an operand resource
4. Determination and meaning of value
- GDL: value is determined by the producer so it’s embedded in the operand resource
(goods) and is defined in terms of “exchange-value”
- SDL: value is perceived and determined by the customer based on “value in use” and
firms can only make value prepositions
5. Firm-customer interaction
- GDL: customers are operand resources and they are supposed to create
transactions with resources
- SDL: customers are primarily operant resources and they are active participants in
coproduction and relational exchanges
6. Source of economic growth
- GDL: claims that wealth consists of having control and owning operand resources
and that wealth is obtained from surplus tangible resources and goods
- SDL: wealth is obtained through application and exchange of knowledge and skills
and it represents the right to the future use of operant resources
What is many-to-many marketing? What are the three properties of a
many-to-many network?
Many-to-many marketing
= Consists of networks of consumers and suppliers interacting with each other (also
customers are interacting with each other) <> It’s not just between customer and
supplier
= Information is generated from multiple sources but also received by multiple
sources
= Relationships are what connect people or entities and these relationships involve
more than 2 subjects so it’s a network of relationships
= Everything is interconnected, the whole network can benefit as a result of an
interaction or series of interactions which distributes utility to all actors
Examples: AirBNB, eBay
2
, 3 properties of a many-to-many network
1) The network takes precedence over any individual member
2) The network cannot be reduced to the sum of individual nodes, connections and
interactions
3) The network offers opportunities but also disadvantages to individual members
and their interactions. It confers rights but also obligations.
=> These three properties are the basis on which many-to-many networks are
currently understood
Paper 2: Value co-creation and destruction in services
What are three reasons why co-creation is increasingly being used by
companies? Provide an example of how each of these factors can be
used by a company to encourage value co-creation.
Three reasons
Co-creation is increasingly being used by companies for three reasons:
1) The internet has made it easier to create channels for interaction between
companies and consumers (FE: A Facebook page of the company where people
can interact)
2) New technology such as 3D printing and Web 2.0 technology has allowed for
easier co-creation between companies and consumers (FE: Live chats with AI,
contact/call center technologies)
3) Because consumers are increasingly informed, they want to actively participate
rather than passively wait on the sidelines (FE: Companies can let them give
feedback and use it to improve their services)
(This is also why modern companies use co-creation now also as a competitive advantage
- Co-creation can create better ideas for product innovation, enhance financial
performance, build stronger relationships with customers and make more
consumer-oriented products possible
- It also makes sure the end result of a product or service is meaningful to the
consumers on an emotional, cultural or mental level which makes the consumer
feel like they are part of the creation process)
3
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