Lusch et al. (2007) describe as marketing emerged in the beginning of the 20th century, it embraced the goods-dominant (G-D) logic. The concept of the Four Ps of marketing mix – product, price, place and promotion became treated as the basic model at that time. (Grönroos, 1989) Today, this paradigm is beginning to lose its position. Service marketing is one leading new approach to marketing. Four main characteristics of services defined by Kotler et al. (2009) are intangible, perishable, variability and inseparability (see Appendix A). Thus, Booms and Bitner (1982) turn services marketing into 7Ps by adding people, physical evidence and process.
According to Vargo and Lusch (2004), a paradigm shift in the marketing discipline that is service-dominant logic(S-D logic) and can be captured in eight areas (see Appendix B). They describe S-D logic is a service-centered alternative to the traditional goods-centered paradigm for understanding economic exchange and value creation. S-D logic attributes importance to the value-creating processes that involve the customer as a co-creator of value. Competitive advantage is primarily created through the co-creation value.
The author agrees this paradigm shift and S-D logic because it leverages the strengths of the firm to satisfy customer needs, achieve organizational objectives and can generate competitive advantage.
Internal Marketing (IM)
According to S-D logic, service is becoming the core competitive advantage. Meanwhile, services are delivered by people. The service employees can have an impact on image and reputation of the company. When the service employees provide the accurate service that can meet the customer's desires. Company can gain a positive reputation hence attaining the higher market share and the charge more than its competitors for service. Therefore, employees are critical to the success of any service organization. (Wilson et al., 2008) Guest (1987), Walton...