How Context Frames Exchange - Coursework Example

Topic: Contextualization and value-in-context: How context frames exchange Name Unit Date Introduction The service dominant (SD) logic is a concept that emphasizes on services. The service dominant logic looks beyond use of goods in the market to a service dominated market. The main tools in the service dominant logic are skills and knowledge as opposed to the goods logic which looks at physical resources. In service dominant logic, skills and knowledge are vital for co-creation. Service dominant market involves doing something for and as well as with another4. Goods in the service dominant logic are viewed as tools and appliances in providing services to the customers. The supply chains help in supporting the customers in playing the role of value co-creating. This is through offering the goods or services. The main purpose of service dominant logic is to do something for another party and with them. The service dominant logic involves the firm being capable to provide and satisfy the customer’s needs through continuous communication between the two parties. Service dominant logic involves the firm shifting the mindset from the tangible to intangible, creating and using the dynamic operands and shifting to conversation dialogue1. The service dominant logic sees the customer as buying the service flow rather than the goods. This report will analyze critically the article by Chandler and Vargo from a theoretical perspective and look at the practical implication it has on Apples’ iPhone by looking at social media as co-creation tool. This will be supported by two articles by Lusch, Vargo & Tanniru2 and Akaka & Vargo3. Analysis Chandler and Vargo4 looks at the role of context in providing service, especially in the market co-creation. The article shifts its focus from the individual actor to the market. This is from the micro level to the macro level. According to the article, this enables to reveal the meso level which is between the two levels. The three market levels are potrayed to influence each other according to the authors. The main purpose of exchanging is obtaining value through resources with higher value4. The role of services in value creation is supported by Akaka and Vargo3. These authors explore the role that is played by value in co-creation. Technology service is influenced by human and it also influences human3. One of the technology platforms is social media. Social media is highly associated with service dominant market. Social media acts as both technology and methodology that is vital in executing service dominant logic3. Apple’s iPhone is an example of a product that is used by consumers in different ways. One of the major uses is social media access. While some of the consumers of the products may be using iPhone for games, others will be using it to read e-books and also access social sites. The applications developers use the iPhone to discover what the consumers are attracted to. This may be through monitoring downloads and through social media forums. This is a device that has the capability to offer different services to different actors. Different actors are brought together by the device and forms different contexts. This leads to value co-creation by the involved actors who are the customers and the developers. The fact that the iPhone can access social media leads to connection of different actors who are able to exchange their experiences and ideas. Once Apple releases a product, the social media reaction helps the developers to know what they should incorporate by understanding the consumers’ likes and their products flaws9. The consumers are also able to connect with others and inform about the products through reviews and forums. This is an example of value co-creation in a service dominant logic1. Value is co-created with the customer for the resources to be applied successfully to the customer. According to Lusch, Vargo & Tanniru2, value can only be determined by the customer. The article by Chandler and Vargo supports this and asserts that creation is a joint integration by various actors. Value cannot be created by a single actor which implies that there is continuous exchange being carried out by various actors. The article defines this as resources being used by one actor to benefit another actor. This process is defined as a service for a service exchange. The actors come together to exchange resources in a specific context. Analysis shows that the article tries to prove that context have a role to play in framing the context4. According to Akaka and Vargo, technology is a pillar in the service dominant market through value co creation3. This is due to that role that is played by technology in exchange of information. The article supports that change in technology have highly influenced service provision. Information technology plays a vital role in exchange of information and contributes to value co-creation at all the three market levels used by Chandler and Vargo3. Information technology helps in co-creation at the micro, meso and macro level through interaction. Social media is part of information technology and provides a very important functionality to the three market levels. This is through interaction between the levels leading to co-creation. Conversation through social media is fast and assessable to different players. According to Chandler and Vargo, context, markets and value co creation are all related. There is context role in value according to the article. The exchange between two actors is equivalent to having exchange among and within the service. This gives an insight on the manner context has the ability to frame market. Markets are constituted of exchanges that take place in different contexts4. The article argues that to prove context frames market, it can be achieved through viewing the context in a multi level perspective and basing it on the management literature, economics and social network theory. Social media helps the firms look at the way consumers are interacting about their product. This enables the firm to evaluate on how to develop new products which will help in service exchange. The service dominant perspective logic according to chandler and Vargo gives a broader definition of market perspective. The use of resources for the benefit of other actors is well depicted in the service exchange. The article looks deeply at the service dominant (SD) logic perspective. The social media involves exchange of information on goods and servicers. The social media is a service in itself which can help in co-creation. The article asserts that there is need to integrate knowledge and skill in the service dominant market ton help in co creating value. The article by Lusch, Vargo and Tanniru defines explicitly how to serve in a value network3. The article admits that all the markets are electronically connected hence global. This shows how use of information technology has a great impact on the service dominant market. The organizations have to learn how to survive in the service dominant market through responding fast to the changes in the consumer demands. This can only be achieved through use of social media. The role of social media aids in customer and firm co creation. The service dominant market has to keep a close relationship with customers and market. This is through use of platforms such as social media which acts to unify them5. The article by chandler and Vargo has been able to explain how to understand the resources in context. The authors assert that resources are owned and operated by many actors. As the actors tries to access the resources, there is interaction. This is evident in the social media5. For an instance, when the consumer joins a social site, they are able to interact with others. This leads to value co creation. As the actors’ looks for the resources, they interact with each other. The connection of the actors by the resources forms an important part in exchange. People looking for a certain product may find themselves in a social forum and exchange ideas about it. This makes social media a resource which can connect actors. The actors lack the ability to control the resource which connects them4. The article uses brand knowledge as a resource that connects the actors. The firm’s efforts in marketing their product lead to brand knowledge. The actors according to Chandler and Vargo put their efforts together in maintaining a strong brand as a resource. This is a resource that evolves depending on the efforts that are put by the actors. The ability of the involved actors to create their unique brand associated leads to the expanding the brand as a resource. The case where the actors fail to create a strong brand association leads to contracting of the brand knowledge as a resource4. According to Akaka and Vargo, just as value is created through interaction by different actors, innovation in the technology is dependent on interaction between different parties. Value co creation is fully understood when technology is fully explored. This is due to fact that technology is core to the service dominant logic. When the actors interact, they are able to contribute to social system. The authors assert that brand knowledge is a resource which is based externally. The brand knowledge is determined by the context. The main view of the article is the fact that the resources are connected within the contexts. The article by Akaka puts institutions as major and important parts of service ecosystems. The actors in the institutions cannot be restrained from interactions among themselves and others7. The technology in this article is also taken as a potential resource. This is during use of technology to integrate several institutions. The context matters where the actors want to use each other as a resource. Actors are defined to some extent by the contexts. The article shows that actors and context defines each other in some ways. As actors in the market exchange services, these services are exchanged with others leading to a dynamic change in context. As actors exchange ideas on social media, there is a change in context; actors from different contexts are involved in the online discussion. According to Lusch Vargo and Tanniru, virtual collaboration is enhanced through network. The participants are able to exchange their ideas online using the media platforms. The exchange of information is done through different contexts. The article enhances the usefulness of the social media platforms where there can be ease of exchange in documents. Virtual meetings involve actors from different contexts6. The change in context according to Chandler and Vargo is continuous. This illustrates the fluidity that exists in the market. This fluidity is caused by the context. This shows explicitly that contexts have the ability to frame the market. The use of context helps in making it possible to have interactions and exchanges. Market can exist in any geographic place and even virtually but what makes it possible to place parameters on the market is context. A resource is enhanced by the context where it’s fixed. Changing a resource from one context to another may lead to it losing value. The article supports that the joined actors in the services exchange makes a context. The actors who are joined through social media platform will constitute a new context. The context in which the actor is affects the ability to access resources within and in the immediate context. The value of the resource is thus determined by the context in which it is placed. Context is defined as a set of actors who are unique and have a unique link among them. A lot of actors and different links can form a single context. The actors may become connected through social media platform and form a certain context. The implication of technology in creating contexts and value co-creation can not be underestimated. Akaka and Vargo acknowledge the importance of technology in value co-creation which involves interaction and creation of context3. There have also been arguments that customers in the health care are capable in co-creating value. The act of co-creating values enables different actors to be linked. The health care has the capability of linking different customers who will constitute a context. The notion held by the customer is taken as active in value co-creation according to Mccoll-Kennedy-et.al8. Context is described to be heterogeneous and distinctive. The ability to accurately define a context is very vital as it enables to come up with ways on how the resource can be drawn4. The article agrees on the fact that the ability of the context to affect the market is based on the market literature and the social network analysis. This shows that social media has a part to play in the service dominant logic. The social networks are credited with their ability to advance the methodology and help the theory that is based on the social structures. A hundred of actors and a lot of links ma6 end making up one context. This is same where a lot of actors in the social platform are linked with a lot of links to constituter a single context. In each context, there are exchanges in it and beyond it. This leads to a multilevel context which has micro, meso and macro levels. The there levels influences and frames the exchange in a manner that leads to value co-creation. In the micro context, the exchange is between individual actors. The actors serve each other, in the social media platform; this can be taken as exchange between two actors6. The meso context involves exchange between dyads and triads. This level involves indirect exchanges between the actors. The macro context has the capability to frame the wexchnege that occurs among triads and ecosystem. This exchange is a complex service. According to the article, having the knowledge on the complex network is a fundamental aspect in value co-creation. The use of technology makes it possible to understand the macro context. This is due to the fact that it is possible to connect multiple actors in the exchange of services using a network enabled platform. More complex networks are found at the meta-context. The Meta context involves institutionalization of the resources. The complex resources lead to formation of a service ecosystem4. The article has been able to give details on how context frames the market. The service is able to join the actors together. In the case of social media, it is a service that is able to join different actors together. The context frames all the exchange processes in each market level. Exchange in every level is directly related to context. The perspective of each and every actor is determined from the context. It is evident from the analysis that the actor ability to co-create is a function of the context such as micro, meso or macro levels. There is need to understand the multidimensional nature of the context. This is supported by the fact that context is level specific. This leads to the fact that context is vital in value co-creation. The social media covers different context which drives value co-creation4. Conclusion From the analysis, the article has proved that context has the ability to frame the exchange. The statement has been supported by various literatures which show the different ways in which the context can frame the exchange. Through looking at the implications that the article has on service industry, I have looked at the implications it has on Apples’ iPhone using social media as a co-creation tool. I have looked this in a theoretical perspective where I have analyzed and supported the article by two other articles. This is by looking at the social media as a resource which has the capability to co-create and connect the actors. The social media context has the ability to frame the exchange as seen. As the interactions become more in the social media, more actors are joined together. This leads to creation of different contexts which have their implications on the type of exchange. The supporting articles have looked at the technology as a service logic market component. The use of technology in connecting actors plays a vital role on value co creation. The authors have explored the topic on how context frames market in a very detailed manner. Through this, it is evident that social media and the service dominant logic are related in value co-creation. The analysis on how context affects the exchange is very vital as it helps to understand the functionality of the service dominant market. There is still need for more insight on the manner in which technology is embedded in the service dominant logic through value co creation. 1. Vargo, S. L., & R.F. Lusch, ‘Service-Dominant Logic: Continuing the Evolution’, Journal of the Academy of Marketing Science, Vol.36, No. 1, 2008, pp. 1-10. 2. Lusch, R.F., & S. L. Vargo & M. Tanniru, ‘Service, value networks and learning’, Journal of the Academic Marketing Science, Vol. 38, No1, 2010, pp.19-31. 3. Akaka, M. A & S. L. Vargo. ‘Technology As an Operant Resource in Service (eco) systems,’ Information Systems and E-Business Management, 2013. 4. Jennifer D. C. & S. L. Vargo, ‘Contextualization and value-in-context: How context frames exchange’, Marketing Theory, Vol. 11, No. 1, 2011, pp. 35–49 5. Lusch, R. F, & S. L. Vargo. The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions. Armonk, N.Y: M.E. Sharpe, 2006. 6. Williams, John, & R. Aitken. ‘The Service-Dominant Logic of Marketing and Marketing Ethics,’ Journal of Business Ethics. Vol.102, No. 3, 2011, pp.439-454. 7. Akaka, M. A., S. L. Vargo, & R. F. Lusch, ‘The Complexity of Context: A Service Ecosystems Approach for International Marketing’, Journal of International Marketing, Vol. 21, No. 4, 2013, pp. 1-20. 8. McColl-Kennedy, J.R, Kasteren Y. van, S.L Vargo, T.S Dagger, & J.C Sweeney, ‘Health Care Customer Value Cocreation Practice Styles,’ Journal of Service Research. Vol.15, No.4, 2012, pp.370-389. 9. Nie, Y., K. Shirahada, and M. Kosaka. ‘Value Co-Creation Oriented Leadership for Promoting Service-Centric Business,’ Intercultural Communication Studies.Vol. 22, no. 1, 2013,pp. 216-228. References Akaka, M. A. & S. L. Vargo. ‘Technology As an Operant Resource in Service (eco) systems,’ Information Systems and E-Business Management, 2013. Akaka, M. A., S. L. Vargo, & R. F. Lusch, ‘The Complexity of Context: A Service Ecosystems Approach for International Marketing’, Journal of International Marketing, Vol. 21, No. 4, 2013, pp. 1-20. Jennifer D. C. & S. L. Vargo, ‘Contextualization and value-in-context: How context frames exchange’, Marketing Theory, Vol. 11, No. 1, 2011, pp. 35–49. Lusch, R. F. & S. L. Vargo. The Service-Dominant Logic of Marketing: Dialog, Debate, and Directions. Armonk, N.Y: M.E. Sharpe, 2006. Lusch, R.F., & S. L. Vargo & M. Tanniru, ‘Service, value networks and learning’, Journal of the Academic Marketing Science, Vol. 38, No1. 2010, pp.19-31. McColl-Kennedy, J.R, Kasteren Y. van, S.L Vargo, T.S Dagger & J.C Sweeney, ‘Health Care Customer Value Cocreation Practice Styles,’ Journal of Service Research, Vol.15, No.4 2012, pp.370-389. Nie, Y., K. Shirahada, and M. Kosaka. ‘Value Co-Creation Oriented Leadership for Promoting Service-Centric Business,’ Intercultural Communication Studies.Vol. 22, no. 1, 2013,pp. 216-228. Vargo, S. L., & R.F. Lusch, ‘Service-Dominant Logic: Continuing the Evolution’, Journal of the Academy of Marketing Science, Vol.36, No. 1, 2008, pp. 1-10. Williams, John, & R. Aitken. ‘The Service-Dominant Logic of Marketing and Marketing Ethics,’ Journal of Business Ethics. Vol.102, No. 3, 2011, pp.439-454. Read More