Journal of Retailing 83 (1, 2007) 5–18
Competing through service: Insights from service-dominant logic Robert F. Lusch a,∗ , Stephen L. Vargo b,1 , Matthew O’Brien c,2 a
Eller College of Management, University of Arizona, 320 McClelland Hall, 1130 E. Helen Street, Tucson, AZ 85721, United States b College Of Business Administration, University of Hawaii at Manoa, 2402 Maile Way, Honolulu, HI 96822, United States c Foster College of Business Administration, Bradley University, 1501 West Bradley Avenue, Peoria, IL 61625, United States
Service-dominant logic (S-D logic) is contrasted with goods-dominant (G-D) logic to provide a framework for thinking more clearly about the concept of service and its role in exchange and competition. Then, relying upon the nine foundational premises of S-D logic [Vargo, Stephen L. and Robert F. Lusch (2004). “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, 68 (January) 1–17; Lusch, Robert F. and Stephen L. Vargo (2006), “Service-Dominant Logic as a Foundation for Building a General Theory,” in The Service-Dominant Logic of Marketing: Dialog, Debate and Directions. Robert F. Lusch and Stephen L. Vargo (eds.), Armonk, NY: M.E. Sharpe, 406–420] nine derivative propositions are developed that inform marketers on how to compete through service. © 2006 New York University. Published by Elsevier Inc. All rights reserved. Keywords: Service-dominant logic; Goods-dominant logic; Derivative propositions
Business scholars and practitioners are aware that competitive advantage can be enhanced through service (Karmarkar 2004). It is also clear that there is a link between competitive advantage and superior performance (Barney 1991; Coyne
1985; Day and Wensley 1988; Hunt and Morgan 1995; Porter
1985). Yet, by almost any definition or measure, there is little evidence of significantly increasing service. In fact, it is often argued that service is actually on decline (Oliva and
Sterman 2001), at least in the U.S. marketplace. Paradoxically, managers, though motivated to perform and aware of the links among service, competitive advantage, and firm
performance, often fail to execute on that knowledge (cf.
Bharadwaj et al. 1993). Additionally, academics, though
aware of these links, have not sufficiently informed normative theory to adequately assist in that execution.
We submit the problem is that there is not a full and adequate understanding of the concept of “service” and its role ∗
Corresponding author. Tel.: +1 520 621 7480.
E-mail addresses: email@example.com (R.F. Lusch),
firstname.lastname@example.org (S.L. Vargo), email@example.com (M. O’Brien). 1 Tel.: +1 808 956 8167.
2 Tel.: +1 309 677 3482.
in exchange and competition. Accordingly, our purpose is
to advance this understanding by exploring a relatively new
conceptual lens (service-dominant logic) through which we
can view exchange, markets, enterprises – including, but not limited to retailers – and competing through service.
We argue that competing through service is about more
than adding value to products. Importantly, it is also more
than the collective roles of marketing, strategic business,
human resource, information-systems, financial, and operations management to produce and distribute better products. We argue that effective competing through service has to do
with the entire organization viewing and approaching both
itself and the market with a service-dominant (S-D) logic
(Vargo and Lusch 2004).
S-D logic is based on an understanding of the interwoven fabric of individuals and organizations, brought together into networks and societies, specializing in and exchanging
the application of their competences for the applied competences they need for their own well being. It is a logic that is philosophically grounded in a commitment to collaborative
processes with customers, partners, and employees; a logic
that challenges management at all levels to be of...
References: Achrol, Ravi S. (1991). “Evolution of the Marketing Organization: New
Frontiers for Turbulent Environments,” Journal of Marketing, 55 (October) 77–93.
Achrol, Ravi S. and Philip Kotler (1999). “Marketing in the Network Economy,” Journal of Marketing, 63 (Special Issue) 146–163.
Alba, Joseph W., John Lynch, Barton Weitz, Chris Janiszewski, Richard
Lutz, Alan Sawyer and Stacy Wood (1997)
Barksdale, Hiram C. and Bill Darden (1971). “Marketers’ Attitude Toward
the Marketing Concept,” Journal of Marketing, 35 (October) 29–
Barney, Jay B. (1991). “Firm Resources and Sustained Competitive Advantage,” Journal of Management, 17 (March) 99–120.
Bastiat, Frederic (1848). in Selected Essays on Political Economy (S. Cain,
Bendapudi, Neeli and Robert P. Leone (2003). “Psychological Implications
of Customer Participation in Co-production,” Journal of Marketing, 67
Bharadwaj, Sundar G., Rajan P. Varadarajan and John Fahy (1993). “Sustainable Competitive Advantage in Service Industries: A Conceptual Model
and Research Propositions,” Journal of Marketing, 57 (October) 83–99.
Booms, Bernard H. and Mary Jo Bitner (1981). “Marketing Strategies and
Organisation Structures for Service Firms,” in Marketing of Services,
Cargill (2005), “Corporate Brochure” (accessed December 21, 2005), [available at http://www.cargill.com/about/index.htm].
Christensen, Clayton, Michael Raynor and Matt Verlinden (2001). “Skate
to Where the Money Will Be,” Harvard Business Review, (November)
Christopher, Martin, Adrian Payne and David Ballantyne (1991). Relationship Marketing: Bringing Quality, Customer Service and Marketing
Together, Oxford, England: Butterworth-Heinemann Ltd.
Connolly, Bob (2004). “Wal-Mart Insights,” in Presentation to the Retailing
Converse, Paul D. (1921). Marketing Methods and Politics, New York, NY:
Coyne, Kevin P. (1985). “Sustainable Competitive Advantage—What It Is,
What It Isn’t”,” Business Horizons, 29 (January–February) 54–61.
Day, George S. and Robin Wensley (1988). “Assessing Advantage: A Framework for Diagnosing Competitive Superiority,” Journal of Marketing, 52
Dixon, Donald F. (1990). “Marketing as Production: The Development of
a Concept,” Journal of the Academy of Marketing Science, 18 (Fall)
Economist (2005, April 23). “Are you being served?,” The Economist, 76–78.
Fisk, Raymond P., Stephen W. Brown and Mary Jo Bitner (1993). “Tracking
the Evolution of the Services Marketing Literature,” Journal of Retailing,
Friedman, Thomas L. (2005). The World Is Flat, New York: Farrar, Straus
George, William R. and Barbara E. Gibson (1991). “Blueprinting—A
Tool for Managing Quality in Service,” in Service Quality: Multidisciplinary and Multinational Perspectives, S
Gourville, John T. and Youngme Moon (2004). “Managing Price Expectations through Product Overlap,” Journal of Retailing, 80 (1) 23–35.
Gronroos, Christian (2002). Service Management and Marketing, Chichester: Wiley.
Gummesson, Evert (1993). Quality Management in Service Organizations,
New York: International Service Quality Association.
Gummesson, Evert (1995). “Relationship Marketing: Its Role in the Service
Economy,” in Understanding Services Management, William J
Hollander, Stanley C. (1960). “The Wheel of Retailing,” Journal of Marketing, 24 (July) 37–42 (Reprinted in Marketing Management, 5 (2) 63–67,
Hunt, Shelby D. (2000). A General Theory of Competition: Resources,
Competences, Productivity, and Economic Growth, California, Thousand Oaks: Sage Publications.
Hunt, Shelby D. (2002). Foundations of Marketing Theory: Toward a General Theory of Marketing, Armonk, NY: M.E. Sharpe.
Hunt, Shelby D. and Morgan S Robert M. (1995). “The Comparative Advantage Theory of Competition,” Journal of Marketing, 59 (April) 1–15.
Karmarkar, Uday (2004). “Will You Survive the Services Revolution?,” Harvard Business Review, 82 (June) 100–108.
Kingman-Brundage, J. (1989). “The ABCs of Service System Blueprinting,”
in Designing a Winning Service Strategy: 1989 American Marketing
Kohli, Ajay K. and Bernard J. Jaworski (1990). “Market Orientation: The
Construct, Research Propositions, and Managerial Implications,” Journal of Marketing, 54 (April) 1–18.
Kotler, Philip (1972). Marketing Management, second ed. Englewood Cliffs,
NJ: Prentice Hall.
Lambert, Douglas M. and Sebastian J. Garcia-Dastugue (2006). “CrossFunctional Business Processes for the Implementation of ServiceDominant Logic,” in The Service-Dominant Logic of Marketing: Dialog,
Debate, and Directions, F
Levy, Michael, Dhruv Grewal, Robert A. Peterson and Bob Connolly
Lusch, Robert F., Stephen W. Brown and Gary J. Brunswick (1992). “A
General Framework for Explaining Internal vs
Lusch, Robert F. and Stephen L. Vargo (2006). “Service-Dominant Logic as
a Foundation for Building a General Theory,” in The Service-Dominant
Lynch, John G. and Dan Ariely (2000). “Wine Online: Search Costs Affect
Competition on Price, Quality, and Distribution,” Marketing Science, 19
Please join StudyMode to read the full document