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.

Luonnonsuojelu arjessa : Maanomistajien näkemyksiä ja kokemuksia yksityismaiden tilapäisestä luonnonsuojelusta ja sen uudistumisen prosessista

Nature conservation in everyday life: Private landowners perceptions of and experiences on temporary nature conservation and its renewing process This study explores the legitimacy of official nature conservation of private lands. It describes how temporary nature conservation became a part of Finnish nature conservation policy and how forest owners perceived this tool and its usage. In addition, the study analyses forest owners' attitudes on official nature conservation. The study combines individual and official perspectives, and presents a nature conservation politics of everyday life. The theoretical background of the study is learning processes of environmentally responsible participation, and especially empowerment. Main methods in gathering the material for the study have been interviews and a survey. In the 1990 s, Finnish landowners opposed the implementation of nature conservation, especially conservation of shores and the establishment of the European-wide network of conservation areas (Natura 2000). After negative experiences on these conservation efforts, some private landowners were disempowered and some even rejected conservation completely. The Nature Conservation Act of 1996 launched an option to conserve nature officially for fixed time-periods. Use of such a policy tool did not immediately become a widely-used and appreciated conservation practice. During the following decade, however, it attracted remarkable attention within Finnish nature conservation policy discussions. The perspective of landowners began to be emphasised when local and regional organisations for nature conservation and forestry together defined the ideas of natural values trading. Later, the national governance process of the committee defining the Forest Biodiversity Programme for Southern Finland (METSO) institutionalised these ideas in one of its pilot projects. Landowners participated in the project of natural values trading by offering their forests for conservation, which reflects the increased acceptance and legitimacy of nature conservation on private forests. The central elements producing the legitimacy of natural values trading have been voluntariness, temporariness, and dialogue between nature conservation and forestry. Natural values trading analysed in the study is an example of new environmental policy instruments and its creation process represents governance in the implementation of nature conservation. It has increased the legitimacy of nature conservation policy of private forests in Finland. The results reveal the importance of participation and learning processes in the implementation of nature conservation policy, and the need to also pay attention to these processes in the future.

Essays on Managing Knowledge and Work Related Wellbeing

This study explores the relationship between Intellectual Capital and Maintenance of Work Ability. Intellectual Capital is the central framework for analysing the increasing knowledge-intensiveness of business life. It is characteristic of Intellectual Capital that the intersection of human capital, internal structures and external structures is essential. Maintenance of Work Ability, on the other hand, has been the leading paradigm for Finnish occupational health and safety activities since the late 1980s. It is also a holistic approach that emphasises the interdependence of competence, work community, work environment and health as the key to work-related wellbeing. This thesis consists of five essays that scrutinise the focal phenomena both theoretically and empirically. The conceptual model that results from the first research essay provides a general framework for the whole thesis. The case study in the second essay supports a division of intangible assets into generative and commercially exploitable intangibles introduced in the first essay and further into the primary and secondary dimension of generative intangibles. Further scrutiny of the interaction of generative intangible assets in essay three reveals that employees’ wellbeing enhances the readiness to contribute to the knowledge creation process. The fourth essay shows that the MWA framework could benefit knowledge-intensive work but this would require a different approach than has been commonly adopted in Finland. In essay five, deeper analysis of the MWA framework shows that its potential results from comprehensive support of the functioning of an organisation. The general conclusion of this thesis is that organisations must take care of their employees’ wellbeing in order to secure innovativeness that is the key to surviving in today’s competitive business environment.

A Model for Creating Strategic Alliances. A Study of Inter-firm Cooperation in the North European ICT Sector

In this study, it is argued that the view on alliance creation presented in the current academic literature is limited, and that using a learning approach helps to explain the dynamic nature of alliance creation. The cases in this study suggest that a wealth of inefficiency elements can be found in alliance creation. These elements can further be divided into categories, which help explain the dynamics of alliance creation. The categories –combined with two models brought forward by the study– suggest that inefficiency can be avoided through learning during the creation process. Some elements are especially central to this argumentation. First, the elements related to the clarity and acceptance of the strategy of the company, the potential lack of an alliance strategy and the elements related to changes in the strategic context. Second, the elements related to the length of the alliance creation processes and the problems a long process entails. It is further suggested that the different inefficiency elements may create a situation, where the alliance creation process is –sequentially and successfully– followed to the end, but where the different inefficiencies create a situation where the results are not aligned with the strategic intent. The proposed solution is to monitor and assess the risk for inefficiency elements during the alliance creation process. The learning, which occurs during the alliance creation process as a result of the monitoring, can then lead to realignments in the process. This study proposes a model to mitigate the risk related to the inefficiencies. The model emphasizes creating an understanding of the other alliance partner’s business, creating a shared vision, using pilot cooperation and building trust within the process. An analytical approach to assessing the benefits of trust is also central in this view. The alliance creation approach suggested by this study, which emphasizes trust and pilot cooperation, is further critically reviewed against contracting as a way to create alliances.

Time and Location as Customer Perceived Value Drivers

Since the emergence of service marketing, the focus of service research has evolved. Currently the focus of research is shifting towards value co-created by the customer. Consequently, value creation is increasingly less fixed to a specific time or location controlled by the service provider. However, present service management models, although acknowledging customer participation and accessibility, have not considered the role of the empowered customer who may perform the service at various locations and time frames. The present study expands this scope and provides a framework for exploring customer perceived value from a temporal and spatial perspective. The framework is used to understand and analyse customer perceived value and to explore customer value profiles. It is proposed that customer perceived value can be conceptualised as a function of technical, functional, temporal and spatial value dimensions. These dimensions are suggested to have value-increasing and value-decreasing facets. This conceptualisation is empirically explored in an online banking context and it is shown that time and location are more important value dimensions relative to the technical and functional dimensions. The findings demonstrate that time and location are important not only in terms of having the possibility to choose when and where the service is performed. Customers also value an efficient and optimised use of time and a private and customised service location. The study demonstrates that time and location are not external elements that form the service context, but service value dimensions, in addition to the technical and functional dimensions. This thesis contributes to existing service management research through its framework for understanding temporal and spatial dimensions of perceived value. Practical implications of the study are that time and location need to be considered as service design elements in order to differentiate the service from other services and create additional value for customers. Also, because of increased customer control and the importance of time and location, it is increasingly relevant for service providers to provide a facilitating arena for customers to create value, rather than trying to control the value creation process. Kristina Heinonen is associated with CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration

Changes in Beer Labels and their Meaning : A Holistic Approach to the Semiosic Process

The purpose of this study is to find a framework for a holistic approach to, and form a conceptual toolbox for, investigating changes in signs and in their interpretation. Charles S. Peirce s theory of signs in a communicative perspective is taken as a basis for the framework. The concern directing the study is the problem of a missing framework in analysing signs of visual artefacts from a holistic perspective as well as that of the missing conceptual tools. To discover the possibility of such a holistic approach to semiosic processes and to form a conceptual toolbox the following issues are discussed: i) how the many Objects with two aspects involved in Peirce s definition of sign-action, promote multiple semiosis arising from the same sign by the same Interpretant depending on the domination of the Objects; ii) in which way can the relation of the individual and society or group be made more apparent in the construction of the self since this construction is intertwined with the process of meaning-creation and interpretation; iii) how to account for the fundamental role of emotions in semiosis, and the relation of emotions with the often neglected topic of embodiment; iv) how to take into account the dynamic, mediating and processual nature of sign-action in analysing and understanding the changes in signs and in the interpretation of signs. An interdisciplinary approach is chosen for this dissertation. Concepts that developed within social psychology, developmental psychology, neurosciences and semiotics, are discussed. The common aspect of the approaches is that they in one way or another concentrate on mediation provided by signs in explaining human activity and cognition. The holistic approach and conceptual toolbox found are employed in a case study. This consists of an analysis of beer brands including a comparison of brands from two different cultures. It becomes clear that different theories and approaches have mutual affinities and do complement each other. In addition, the affinities in different disciplines somewhat provide credence to the various views. From the combined approach described, it becomes apparent that by the semiosic process, the emerging semiotic self intertwined with the Umwelt, including emotions, can be described. Seeing the interpretation and meaning-making through semiosis allows for the analysis of groups, taking into account the embodied and emotional component. It is concluded that emotions have a crucial role in all human activity, including so-called reflective thinking, and that emotions and embodiment should be consciously taken into account in analysing signs, the interpretation, and in changes of signs and interpretations from both the social and individual level. The analysis of the beer labels expresses well the intertwined nature of the relationship between signs, individual consumers and society. Many direct influences from society on the label design are found, and also some indirect attitude changes that become apparent from magazines, company reports, etc. In addition, the analysis brings up the issues of the unifying tendency of the visual artefacts of different cultures, but also demonstrates that the visual artefacts are able to hold the local signs and meanings, and sometimes are able to represent the local meanings although the signs have changed in the unifying process.

Construction of a global map of human gene expression : the process, tools and analysis

This thesis studies human gene expression space using high throughput gene expression data from DNA microarrays. In molecular biology, high throughput techniques allow numerical measurements of expression of tens of thousands of genes simultaneously. In a single study, this data is traditionally obtained from a limited number of sample types with a small number of replicates. For organism-wide analysis, this data has been largely unavailable and the global structure of human transcriptome has remained unknown. This thesis introduces a human transcriptome map of different biological entities and analysis of its general structure. The map is constructed from gene expression data from the two largest public microarray data repositories, GEO and ArrayExpress. The creation of this map contributed to the development of ArrayExpress by identifying and retrofitting the previously unusable and missing data and by improving the access to its data. It also contributed to creation of several new tools for microarray data manipulation and establishment of data exchange between GEO and ArrayExpress. The data integration for the global map required creation of a new large ontology of human cell types, disease states, organism parts and cell lines. The ontology was used in a new text mining and decision tree based method for automatic conversion of human readable free text microarray data annotations into categorised format. The data comparability and minimisation of the systematic measurement errors that are characteristic to each lab- oratory in this large cross-laboratories integrated dataset, was ensured by computation of a range of microarray data quality metrics and exclusion of incomparable data. The structure of a global map of human gene expression was then explored by principal component analysis and hierarchical clustering using heuristics and help from another purpose built sample ontology. A preface and motivation to the construction and analysis of a global map of human gene expression is given by analysis of two microarray datasets of human malignant melanoma. The analysis of these sets incorporate indirect comparison of statistical methods for finding differentially expressed genes and point to the need to study gene expression on a global level.

A Formalised Model of the Information and Materials Handling Activities in the Construction Process

A model of the information and material activities that comprise the overall construction process is presented, using the SADT activity modelling methodology. The basic model is further refined into a number of generic information handling activities such as creation of new information, information search and retrieval, information distribution and person-to-person communication. The viewpoint could be described as information logistics. This model is then combined with a more traditional building process model, consisting of phases such as design and construction. The resulting two-dimensional matrix can be used for positioning different types of generic IT-tools or construction specific applications. The model can thus provide a starting point for a discussion of the application of information and communication technology in construction and for measurements of the impacts of IT on the overall process and its related costs.

Value Creation in Professional Service Processes. Propositions for Understanding Financial Value from a Customer Perspective

Many service management studies have suggested that service providers benefit from having long-term relationships with customers, but the argument from a customer perspective has been vague. However, especially in the business-to-business context, an analysis of financial value creation seems appropriate also from a customer perspective. Hence, the aim of this study is to develop a framework for understanding monetary value creation in professional service assignments from a customer perspective. The contribution of this study is an improved insight and framework for understanding financial value creation from a customer perspective in a professional service delivery process. The sources for monetary differences between transactional and long-term service providers are identified and quantified in case settings. This study contributes to the existing literature in service and relationship management by extending the customer’s viewpoint from perceived value to measurable monetary value. The contribution to the professional services lies in the process focus as opposed to the outcome focus, which is often accentuated in the existing professional services literature. The findings from the qualitative data suggest that a customer company may benefit from having an improved understanding of the service delivery (service assignment) process and the factors affecting the monetary value creation during the process. It is suggested that long-term relationships with service providers create financial value in the case settings in the short term. The findings also indicate that by using the improved understanding, a customer company can make more informed decisions when selecting a service provider for a specific assignment. Mirel Leino is associated with CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration

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.