The paper "Understanding Service-Dominant Logic" is an outstanding example of marketing coursework. The exchange model that applies in marketing was inherited from economics that had a wide-spread logic based on goods exchange. These goods are mostly manufactured outputs. The logic concentrated on the resources that are not touchable but are value embedded and transactions. However, there are new perceptions that have risen in the past several decades with new logic focusing on co-creation of value, relationships and the resources that cannot be touched (Palmer, 2011). They believe that many authors have regarding the new perspectives is that they are coming together to form one major logic for marketing that is based on the provision of services other than goods to the exchange in the economy.
The ultimate aim of this paper is to evaluate the foundational premises (FPs) that focus on service as the fundamental basis of exchange, goods as a distribution mechanism for service provision and lastly viewing the customer as a value co-creator (Vargo & Lusch, 2008). Understanding Service-Dominant (S-D) Logic Service-Dominant (S-D) Logic refers to the mindset for combined comprehension of the aim and nature of enterprises, markets and society.
The introductory proposition of S-D logic is that firms, marketers and society are mainly concerned with the exchange of service, which is the treatment of competence, which is characterized, by knowledge and skills for profiting a party. This means that service is exchanged by service whereby all enterprises are service firms; all markets are based on the exchange of service and all economies and societies are service-centered (Aitken, et al. , 2006). As a result, marketing thought and practice needs to be rooted in S-D logic laws and theories.
Being consistent with S-D logic means that instead of service marketing “ breaking loose” from the marketing of goods, as it has been happening in the service marketing for the past many decades, all of the marketing requires to break loose from the goods and manufacturing-centred-model – that is, goods-dominant (G-D) logic. S-D logic grips concepts of the value-in-use and co-creation of value other than the value-in-exchange and entrenched-value concepts of G-D logic (Palmer, 2011). Therefore, instead of the organizations being instructed to market to customers, they are informed to market with customers as well as with other value-creation individuals in the value network of the firm. FP1: Service is the fundamental basis of exchange Physical and mental skills are major operant resources.
They are given out to the population in a unique manner. In order for an individual to survive, his or her personal skills are not the best for their well being and survival (Lusch, Vargo & Tanniru, 2010). It is therefore important to specialize to be more effective to society and for individual achievements because of specializing in a particular skill.
Specialization help people acquire scale effect and it requires exchange. Division of labor in the ancient societies between and within tribes and clans brought out the tendering of total services by giving out gifts and other things among the members of the clan or tribe. Total service between the clan members was not only for gifts but also for all they possessed and all they could do (Palmer, 2011). This was because they had no money and that was the only means to acquire what they wanted.
They could exchange products they possessed to acquire what they did not have.
Aitken, R. et al. (2006) 'Special Issue on Service-Dominant Logic of Marketing: Insights from The Otago Forum', Marketing Theory 6(3): 275-392.
Alderson, Wroe (1957), Marketing Behavior and Executive Action: A Functionalist Approach to Marketing Theory. Homewood, IL: Richard D. Irwin.
Barabba, Vincent P. (1995), Meeting of the Minds: Creating a Market-Based Enterprise. Boston: Harvard Business School Press.
Capon, Noel and Rashi Glazer (1987), “Marketing and Technology: A Strategic Coalignment,” Journal of Marketing, 51 (July), 1–14.
Fredrick Bastiat (1860), “Marketing in the Network Economy,” Journal of Marketing, 63 (Special Issue), 146–63. (1992), “A General Framework for Explaining Internal vs.
Gummesson, Evert (1994), “Broadening and Specifying Relationship Marketing,” Asia-Australia Marketing Journal, 2 (August), 31–43.
Gutman, Jonathan (1982) “A Means–End Chain Model Based on Consumer Categorization Processes,” Journal of Marketing, 46 (Spring), 60–72
Kotler, Philip (1967), Marketing Management Analysis, Planning, and Control. Englewood Cliffs, NJ: Prentice Hall
Lusch, R. and S. Vargo (2006), "Service Dominant Logic: Reactions, Reflections, and Refinements", Marketing Theory 6 (3), 281-288.
Lusch, Robert F.; Vargo, Stephen L. & Tanniru, M. (2010) "Service, value networks and learning". Journal of the Academy of Marketing Science 38(1): 19-31.
Normann, Richard and Rafael Ramirez (1993), “From Value Chain to Value Constellation: Designing Interactive Strategy,” Harvard Business Review, 71 (July–August), 65–7
Oliver, Richard W., Roland T. Rust, and Sanjeev Varki (1998), “Real-Time Marketing,” Marketing Management, 7 (Fall), 28–37
Palmer, A. (2011) Principles of Services Marketing (6th Ed), McGraw Hill
Prahalad, C.K. and Gary Hamel (1990), “The Core Competence of the Corporation,” Harvard Business Review, 68 (May–June), 79–91
Shostack, and G.D. Upah, eds. Chicago: American Marketing Association, 25–28. Bureau of Economic Analysis, Economic Classification Policy
Smith, A. (1904), An Inquiry into the Nature and Causes of the Wealth of Nations, (1776). Reprint, London: Printed for W. Strahan and T. Cadell
Vargo & Lusch (2004, 2008) advocate Service Dominant Logic (SDL) as the basis of a new unified theory of marketing.