Towards Service Logic: The Unique Contribution of Value Co-Creation

The underpinning logic of value co-creation in service logic is analysed. It is observed that three of the ten foundational premises of the so-called service-dominant logic are problematic and do not support an understanding of value-co-creation and creation that is meaningful for theoretical development and decision making in business and marketing practice. Without a thorough understanding of the interaction concept, the locus and nature of value co-creation cannot be identified. Based on the analysis in the present article it is observed that a unique contribution of a service perspective on business (service logic) is not that customers always are co-creators of value, but that under certain circumstances the service provider gets opportunities to co-create value together with its customers. Finally, the three problematic premises are reformulated accordingly.

What Can A Service Logic Offer Marketing Theory

The goods-dominated marketing model has major shortcomings as a guiding marketing theory. Its marketing mix approach is mainly geared towards buying and does not include consumption as an integral part of marketing theory. Although it is during the process of consuming goods and services that value is generated for customers and the foundation for repeat purchasing and customer relationships are laid, this process is left outside the scope of marketing. The focus in service marketing is not on a product but on interactions in service encounters. Consumption has become an integral part of a holistic marketing model. Other than standardized goods-based value propositions can be better understood when taking a servicebased approach. It is concluded that marketing based on a goods logic is but a special case of marketing based on a service logic and applicable only in certain contexts with standardized products.

Towards Service Logic: The Unique Contribution of Value Co-Creation

The underpinning logic of value co-creation in service logic is analysed. It is observed that three of the ten foundational premises of the so-called service-dominant logic are problematic and do not support an understanding of value-co-creation and creation that is meaningful for theoretical development and decision making in business and marketing practice. Without a thorough understanding of the interaction concept, the locus and nature of value co-creation cannot be identified. Based on the analysis in the present article it is observed that a unique contribution of a service perspective on business (service logic) is not that customers always are co-creators of value, but that under certain circumstances the service provider gets opportunities to co-create value together with its customers. Finally, the three problematic premises are reformulated accordingly.

Making Sense of Value and Value Co-Creation in Service Logic

In order to further develop the logic of service, value creation, value co-creation and value have to be formally and rigorously defined, so that the nature, content and locus of value and the roles of service providers and customers in value creation can be unambiguously assessed. In the present article, following the underpinning logic of value-in-use, it is demonstrated that in order to achieve this, value creation is best defined as the customer’s creation of value-in-use. The analysis shows that the firm’s and customer’s processes and activities can be divided into a provider sphere, closed for the customer, and a customer sphere, closed for the firm. Value creation occurs in the customer sphere, whereas firms in the provider sphere facilitate value creation by producing resources and processes which represent potential value or expected value-in use for their customers. By getting access to the closed customer sphere, firms can create a joint value sphere and engage in customers’ value creation as co-creators of value with them. This approach establishes a theoretically sound foundation for understanding value creation in service logic, and enables meaningful managerial implications, for example as to what is required for co-creation of value, and also further theoretical elaborations.

Re-Conceptualizing Value-Creation From Industrial Business Logic to Service Business Logic

There is an urgent interest in marketing to move away from neo-classical value definitions suggesting that value creation is a process of exchanging goods for money. In the present paper, value creation is conceptualized as an integration of two distinct, yet closely coupled processes. First, actors co-create what this paper calls an underlying basis of value. This is done by interactively re-configuring resources. By relating and combining resources, activity sets, and risks across actor boundaries in novel ways actors create joint productivity gains – a concept very similar to density (Normann, 2001). Second, actors engage in a process of signification and evaluation. Signification implies co-constructing the meaning and worth of joint productivity gains co-created through interactive resource re-configuration, as well as sharing those gains through a pricing mechanism as value to involved actors. The conceptual framework highlights an all-important dynamics associated with ´value creation´ and ´value´ - a dynamics the paper claims has eluded past marketing research. The paper argues that the framework presented here is appropriate for the interactive service perspective, where value and value creation are not objectively given, but depend on the power of involved actors´ socially constructed frames to mobilize resources across actor boundaries in ways that ´enhance system well-being´ (Vargo et al., 2008). The paper contributes to research on Service Logic, Service-Dominant Logic, and Service Science.

Marketing and the Logic of Service: Value Facilitation, Value Creation and Co-creation, and Their Marketing Implications

The discussion of a service-dominant logic has made the findings of decades of service marketing research a topic of interest for marketing at large. Some fundamental aspects of the logic such as value creation and its marketing implications are more complex than they have been treated as so far and need to be further developed to serve marketing theory and practice well. Following the analysis in the present article it is argued that although customers are co-producers in service processes, according to the value-in-use notion adopted in the contemporary marketing and management literature they are fundamentally the creators of value for themselves. Furthermore, it is concluded that although by providing goods and services as input resources into customers’ consumption and value-generating processes firms are fundamentally value facilitators, interactions with customers that exist or can be created enable firms to engage themselves with their customers’ processes and thereby they become co-creators of value with their customers. As marketing implications it is observed that 1) the goal of marketing is to support customers’ value creation, 2) following a service logic and due to the existence of interactions where the firm’s and the customer’s processes merge into an integrated joint value creation process, the firm is not restricted to making value propositions only, but can directly and actively influence the customer’s value fulfilment as well and extend its marketing process to include activities during customer-firm interactions, and 3) although all goods and services are consumed as service, customers’ purchasing decisions can be expected to be dependant of whether they have the skills and interest to use a resource, such as a good, as service or want to buy extended market offerings including process-related elements. Finally, the analysis concludes with five service logic theses.

Value of Image in Service

Purpose This paper takes a customer view on corporate image and value, and discusses the value of image in service. We propose a model depicting how the customer’s corporate brand image affects the customer’s value-in-use. Methodology/approach The paper represents conceptual development on customers’ value and image construction processes. By integrating ideas and elements from the current service and branding literature a model is proposed that extends current views on how value-in-use emerges. Findings From a current service perspective it is the customer who makes value assessments when experiencing service. Similarly, if branding is a concept used to denote the service provider’s intentions and attempts to create a corporate brand, image construction is the corresponding process where the customer constructs the corporate image. This image construction process is always present both in service interactions and in communication and has an effect on the customer’s value-in-use. We argue that two interrelated concepts are needed to capture corporate image construction and dynamics and value-in-use – the image-in-use and image heritage. Research implications The model integrates two different streams of research pointing to the need to consider traditional marketing communication and service interactions as inherently related to each other from the customer’s point of view. Additionally the model gives a platform for understanding how value-in-use emerges over time. New methodological approaches and techniques to capture image-in-use and image heritage and their interplay with value-in-use are needed. Practical implications The company may not be able to control the emergence of value-in-use but may influence it, not only in interactions with the customer but also with pure communication. Branding activities should therefore be considered related to service operations and service development. Additionally, practitioners would need to apply qualitative methods to understand the customer’s view on image and value-in-use. Originality/value The paper presents a novel approach for understanding and studying that the customer’s image of a company influences emergence of value-in-use. The model implies that the customer’s corporate image has a crucial role for experienced value-in-use.

Rethinking Service Companies’ Business Logic: Do We Need a Customer-Dominant Logic as a Guideline?

Purpose –This paper explores and expands the roles of customers and companies in creating value by introducing a new a customer-based approach to service. The customer’s logic is examined as being the foundation of a customer-based marketing and business logic. Design/methodology/approach – The authors argue that both goods-dominant logics and service-dominant logics are provider-dominant. Contrasting the customer-dominant logic with provider-dominant logics, the paper examines the creation of service value from the perspectives of value-in-use, the customer’s own context, and the customer’s experience of service. Findings –Moving from a provider-dominant logic to a customer-dominant logic uncovered five major challenges to service marketers: Company involvement, company control in co-creation, visibility of value creation, locus of customer experience, and character of customer experience. Research limitations/implications – The paper is exploratory. It presents and discusses a conceptual model and suggests implications for research and practice. Practical implications –Awareness of the mechanisms of customer logic will provide businesses with new perspectives on the role of the company in their customer’s lives. We propose that understanding the customer’s logic should represent the starting-point for the marketer’s business logic. Originality/value – The paper increases the understanding of how the customer’s logic underpins the customer-dominant business logic. By exploring consequences of applying a customer-dominant logic, we suggest further directions for theoretical and empirical research.

Service Experience in an Innovation Context

Service researchers and practitioners have repeatedly claimed that customer service experiences are essential to all businesses. Therefore comprehension of how service experience is characterised in research is an essential element for its further development through research. The importance of greater in-depth understanding of the phenomenon of service experience has been acknowledged by several researchers, such as Carú and Cova and Vargo and Lusch. Furthermore, Service-Dominant (S-D) logic has integrated service experience to value by emphasising in its foundational premises that value is phenomenologically (experientially) determined. The present study analyses how the concept of service experience has been characterised in previous research. As such, it puts forward three ways to characterise it in relation to that research: 1) phenomenological service experience relates to the value discussion in S-D logic and interpretative consumer research, 2) process-based service experience relates to understanding service as a process, and 3) outcome-based service experience relates to understanding service experience as one element in models linking a number of variables or attributes to various outcomes. Focusing on the phenomenological service experience, the theoretical purpose of the study is to characterise service experience based on the phenomenological approach. In order to do so, an additional methodological purpose was formulated: to find a suitable methodology for analysing service experience based on the phenomenological approach. The study relates phenomenology to a philosophical Husserlian and social constructionist tradition studying phenomena as they appear in our experience in a social context. The study introduces Event-Based Narrative Inquiry Technique (EBNIT), which combines critical events with narratives and metaphors. EBNIT enabled the analysis of lived and imaginary service experiences as expressed in individual narratives. The study presents findings of eight case studies within service innovation of Web 2.0, mobile service, location aware service and public service in the municipal sector. Customers’ and service managers’ stories about their lived private and working lifeworld were the foundation for their ideal service experiences. In general, the thesis finds that service experiences are (1) subjective, (2) context-specific, (3) cumulative, (4) partially socially constructed, (5) both lived and imaginary, (6) temporally multiple-dimensional, and (7) iteratively related to perceived value. In addition to customer service experience, the thesis brings empirical evidence of managerial service experience of front-line managers experiencing the service they manage and develop in their working lifeworld. The study contributes to S-D logic, service innovation and service marketing and management in general by characterising service experience based on the phenomenological approach and integrating it to the value discussion. Additionally, the study offers a methodological approach for further exploration of service experiences. The study discusses managerial implications in conjunction with the case studies and discusses them in relation to service innovation.

Exploring Customer Value Formation: A Customer Dominant Logic Perspective

This paper extends current discussions about value creation and proposes a customer dominant value perspective. A customer-dominant marketing logic positions the customer in the center, rather than the service provider/producer or the interaction or the system. The focus is shifted from the company´s service processes involving the customer, to the customer´s multi-contextual value formation, involving the company. It is argued that value is not always an active process of creation; instead value is embedded and formed in the highly dynamic and multi-contextual reality and life of the customer. This leads to a need to look beyond the current line of visibility where visible customer-company interactions are focused to the invisible and mental life of the customer. From this follows a need to extend the temporal scope, from exchange and use even further to accumulated experiences in the customer´s life. The aim of this paper is to explore value formation from a customer dominant logic perspective. This is done in three steps: first, value formation is contrasted to earlier views on the company’s role in value creation by using a broad ontologically driven framework discussing what, how, when, where and who. Next, implications of the proposed characteristics of value formation compared to earlier approaches are put forward. Finally, some tentative suggestions of how this perspective would affect marketing in service companies are presented. As value formation in a CDL perspective has a different focus and scope than earlier views on value it leads to posing questions about the customer that reveals earlier hidden aspects of the role of a service for the customer. This insight might be used in service development and innovation.

Logic as the Universal Science : Bertrand Russell's Early Conception of Logic and Its Philosophical Context

Bertrand Russell (1872 1970) introduced the English-speaking philosophical world to modern, mathematical logic and foundational study of mathematics. The present study concerns the conception of logic that underlies his early logicist philosophy of mathematics, formulated in The Principles of Mathematics (1903). In 1967, Jean van Heijenoort published a paper, Logic as Language and Logic as Calculus, in which he argued that the early development of modern logic (roughly the period 1879 1930) can be understood, when considered in the light of a distinction between two essentially different perspectives on logic. According to the view of logic as language, logic constitutes the general framework for all rational discourse, or meaningful use of language, whereas the conception of logic as calculus regards logic more as a symbolism which is subject to reinterpretation. The calculus-view paves the way for systematic metatheory, where logic itself becomes a subject of mathematical study (model-theory). Several scholars have interpreted Russell s views on logic with the help of the interpretative tool introduced by van Heijenoort,. They have commonly argued that Russell s is a clear-cut case of the view of logic as language. In the present study a detailed reconstruction of the view and its implications is provided, and it is argued that the interpretation is seriously misleading as to what he really thought about logic. I argue that Russell s conception is best understood by setting it in its proper philosophical context. This is constituted by Immanuel Kant s theory of mathematics. Kant had argued that purely conceptual thought basically, the logical forms recognised in Aristotelian logic cannot capture the content of mathematical judgments and reasonings. Mathematical cognition is not grounded in logic but in space and time as the pure forms of intuition. As against this view, Russell argued that once logic is developed into a proper tool which can be applied to mathematical theories, Kant s views turn out to be completely wrong. In the present work the view is defended that Russell s logicist philosophy of mathematics, or the view that mathematics is really only logic, is based on what I term the Bolzanian account of logic . According to this conception, (i) the distinction between form and content is not explanatory in logic; (ii) the propositions of logic have genuine content; (iii) this content is conferred upon them by special entities, logical constants . The Bolzanian account, it is argued, is both historically important and throws genuine light on Russell s conception of logic.

Constructive Perspectives on Inductive Logic

Constructive (intuitionist, anti-realist) semantics has thus far been lacking an adequate concept of truth in infinity concerning factual (i.e., empirical, non-mathematical) sentences. One consequence of this problem is the difficulty of incorporating inductive reasoning in constructive semantics. It is not possible to formulate a notion for probable truth in infinity if there is no adequate notion of what truth in infinity is. One needs a notion of a constructive possible world based on sensory experience. Moreover, a constructive probability measure must be defined over these constructively possible empirical worlds. This study defines a particular kind of approach to the concept of truth in infinity for Rudolf Carnap's inductive logic. The new approach is based on truth in the consecutive finite domains of individuals. This concept will be given a constructive interpretation. What can be verifiably said about an empirical statement with respect to this concept of truth, will be explained, for which purpose a constructive notion of epistemic probability will be introduced. The aim of this study is also to improve Carnap's inductive logic. The study addresses the problem of justifying the use of an "inductivist" method in Carnap's lambda-continuum. A correction rule for adjusting the inductive method itself in the course of obtaining evidence will be introduced. Together with the constructive interpretation of probability, the correction rule yields positive prior probabilities for universal generalizations in infinite domains.

Tacit Pedagogical Knowing: At the Core of Teacher's Professionality

The purpose of this research was to examine class teachers' interactive pedagogical thinking and action, in other words their tacit pedagogical knowing. Tacit pedagogical knowing was defined as a process in interactive teaching situation, through which a teacher finds solutions to surprising and challenging situations, pedagogical moments, so that the lesson continues. Teachers are able to describe their tacit pedagogical knowing afterwards and also find some reasons for it as well. More specifically, the aim was to study, 1) how does a class teacher's tacit pedagogical knowing appear in teacher's actions, and 2) what kinds of contents include in class teacher's tacit pedagogical knowing. The research material was gathered from four class teachers by videotaping their lessons and by stimulated recall interviews. In addition to this, the researcher spent a relatively long time in the research participants' classrooms. She conducted initial interviews and orientating observations by means of participant observation in order to get to know the participants and their contexts better. A phenomenologically oriented approach, which proceeded by following abductive logic, was used in the analysis procedures of the videotaped and stimulated recall data. In addition to this, correlation examinations were used in the validation of stimulated recall data analyses. The appearance of the tacit pedagogical knowing was observed in the videotaped data. The contents of tacit pedagogical knowing were defined by the analyses of stimulated recall data. According to the research results, a class teacher's tacit pedagogical knowing appears in the maintenance of the pedagogical relation, the teacher's relation to content, and the didactical relation. The contents of class teacher's tacit pedagogical knowing were many sided. The maintenance of the pedagogical relation, the teacher's relation to content, and the didactical relation were elements of the contents as well. In addition to these, the maintenance of teacher's pedagogical authority, the maintenance of the student's role or pedagogical authority, and the awareness of the nature of the content of instruction are included in the contents of teacher's tacit pedagogical knowing. The phenomenon of tacit pedagogical knowing was observed to be clearly a process-like and relational phenomenon. Based on the research results, a model of teacher's tacit pedagogical knowing was developed. Using the model, it is possible to illustrate the factors that are at the core of teacher's professionality. This model could be used in the context of teacher education, supervision, or in-service training.