Authors: Marilia Kountouriotou, Andreas Fousteris, Eleni Didaskalou, Dimitrios Georgakellos

Title: Creation of new value-adding services through Services Dominant Logic: An overview

Abstract

The last decade, a very innovative perception of the services sector has appeared in the scientific world as Services Dominant Logic (SDL). This new concept deals with a unified understanding of services, products, organizations nature, markets, consumers and societies overall. Its basic proposition is that large organizations, markets and societies are essentially engaged with the exchange of services intended as applications of skills (knowledge and capabilities) for the benefit of a party. The fundamental statement supports that nowadays we are talking exclusively about services and not about tangible goods and considers customers as the most multifunctional resources, which have the potential to combine their skills, experiences and knowledge in the “co-creation” process for the benefit of another person or themselves. The main reason for customers’ empowerment is the advanced Internet-based technologies that have forced modern businesses to be more customer oriented. This “new example of marketing thinking” in services was introduced by Vargo and Lusch (2008) and has been the subject of much debate over the last decade. Services Dominant Logic argues that marketing moves away from a “commodity-dominated” view that focuses on tangible goods transactions, to a “dominant service” which focuses on intangible resources and on stronger seller-buyer relationships as the fundamental source of added value.

Under the SDL logic, goods are considered as distribution mechanisms for the provision of services. In addition, the value of goods is based on their value in use and is determined by the customer, which clearly exceeds the contractual value in exchange (ie, market value or price). Despite the fact that the goods are subject to service in terms of their classification and operation, goods are not inferior in terms of importance and value because customers have the ultimate power in their value. So if we consider that the focus is on value creation, the traditional distinction between goods and services is no longer relevant. In fact, goods and services provide both services. Hence, they provide something intangible that creates value for the consumer. Therefore, the utility of goods is the provision of services and not the provision of the goods themselves. Based on this view, goods and services should be treated simultaneously, as one, in order to create value.

Our study attempts to provide a closer examination at how services create value to the modern consumer, without even provide ownership over something tangible under Services Dominant Logic. In a service-oriented marketing model, consumer is the main interest and participate actively in the processes of production, exchange, pricing and consumption. As a result, what precedes and follows, as long as the company is involved, in a transaction (short or long term) with the customers, is more important than the transaction itself. As the customer-centric perspective is participatory and dynamic, service delivery is maximized through a repetitive learning process by both companies and the consumers. This view necessarily requires the existence of emerging and constantly evolving relationship between provider and receiver.