Service Dominant Logic
Service dominant logic view of marketing has changed from the traditional, foundational, goods dominant logic of exchange, in which goods were the focus of exchange and services that marketing inherited from economics a little more than 100 years ago to service as the basis of economic and social exchange. Service dominant logic has bought a paradigm shift in marketing from goods centred “value is embedded in output” dominant logic where focus was on the efficiencies in the production of tangible output. which was fundamental to the industrial revolution to service centred view that is informed by resource-advantage theory, competence, knowledge and relationship marketing where “value is defined by and co-created in concert with the consumer” (vargo and lush P14, 6).one current example is internet purchasing where customers with or without their knowledge provide the web vendor with valuable information on purchasing habits.
The comparison between goods dominant logic and service dominant logic by vargo and lusch (2007)
Goods Dominant logic
Customer and Environments as Exogenous
Firms Create Value
Operand Resources are Paramount
Management of Marketing Mix
Relationships are Repeated Encounters
Service Dominant logic
Customer and Environments as Endogenous
Value is Co-Created
Operant Resources are Paramount
Co-Creation of Marketing Mix
Relationships are Embedded
Profits are Learning Loop
Constantin and lusch (1994) define operand resources as resources on which an operation or act is performed to produce and effect e.g. Production, and they compare operand resources with operant resource which are employed on operand resources e.g. Technology.
S-D logic treats everyone in the organisation as the value creators , According to Lush and Vargo 2006”One of the distinguishing features of S-D logic, in contrast to G-D logic, is the former’s treatment of all customers,... [continues]
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