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.

Kritisk-händelse-baserad metodutveckling

Denna artikel diskuterar den metodutveckling inom marknadsföring som baseras på den allmänt och mycket frekvent använda kritisk-händelse metod som grundar sig på Flanagen (1954). Genom att forskningen inom nämnda område alltmer handlar om kundrelationer är det naturligt att även metoder som används anpassas till detta. Det finns emellertid flere frågetecken när man fokuserar på kritiska händelser och kundrelationer. Ett sådant är konsekvensen av den kritiska händelsen. Utan att kartlägga en verklig konsekvens av kritiska händelser som inträffat (verkligt beteende) är det emellertid svårt att utveckla metoder för framtida och kommande beteende. Därför diskuteras dessa frågor här i avsikt att föra utvecklingen mot en applicering av kritisk-händelse metoder i pågående kundrelationer.

Customer Relationship Dissolution - What Do We Know and What Do We Need to Know?

Our paper can be seen as a supplement to Halinen-Kaila and Tähtinen' s (2000) review of different direct research approaches on the ending of exchange relationships. Our purpose is to illuminate the borderline between research explicitly focusing on ending and research implicitly considering ending of relationships. Another purpose is to give an overview of how researchers within the Nordic School of Service Management and Nordic School of Relationship Marketing have approached customer relationship ending. A third purpose is to put forward a managerial perspective and managerial issues related to relationship ending. Finally we present some conclusions regarding further research avenues concerning relationship ending.

Customer Needing - Conceptualising Industrial Service from a Customer Perspective

Views on industrial service have conceptually progressed from the output of the provider’s production process to the result of an interaction process in which the customer also is involved. Although there are attempts to be customer-oriented, especially when the focus is on solutions, an industrial company’s offering combining goods and services is inherently seller-oriented. There is, however, a need to go beyond the current literature and company practices. We propose that what is needed is a genuinely customer-based parallel concept to offering that takes the customer’s view and put forward a new concept labelled customer needing. A needing is based on the customer’s mental model of their business and strategies which will affect priorities, decisions, and actions. A needing can be modelled as a configuration of three dimensions containing six functions that create realised value for the customer. These dimensions and functions can be used to describe needings which represent starting points for sellers’ creation of successful offerings. When offerings match needings over time the seller should have the potential to form and sustain successful buyer relationships.

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.

Exploring Marketing in Micro Firms

Purpose - The purpose of the paper is to explore the practice of marketing in micro firms. Which are the challenges micro firms encounter and how do they handle them? Methodology - The research methodology is based on the theory-in-use approach (Zaltman, Heffring & LeMasters 1982) in order to inductively explore the practice of marketing in micro firms. The empirical findings rest on ten case studies, where data has been generated through repeated interactions with each case. Findings - The empirical findings show that micro firms handle their marketing challenges in a distinctive manner, by creatively using available resources and network relations. Marketing in micro firms is largely about a long-term, gradual development of a position on the market. This process we label germinal marketing. Two key dimensions of germinal marketing were identified: “earning your position” and “being your brand”. Research limitations and implications - The findings rest on an explorative study consisting of ten cases and the general applicability of the results need to be validated by further studies. These cases are however sufficient to illuminate the need for further research into the area. Value of the paper - The value of the paper is twofold. First, it expands the theory-in-use approach, and presents a research method for successful inductive empirical studies of small firm phenomena. Secondly, the paper widens our understanding of the marketing reality and practice of micro firms, identifying new dimensions of marketing and revealing the strategic implications of ordinary business activities.

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.

From One Segment to a Segment of One - The Evolution of Market Segmentation Theory

The purpose of this study was to deepen the understanding of market segmentation theory by studying the evolution of the concept and by identifying the antecedents and consequences of the theory. The research method was influenced by content analysis and meta-analysis. The evolution of market segmentation theory was studied as a reflection of evolution of marketing theory. According to this study, the theory of market segmentation has its roots in microeconomics and it has been influenced by different disciplines, such as motivation research and buyer behaviour theory. Furthermore, this study suggests that the evolution of market segmentation theory can be divided into four major eras: the era of foundations, development and blossoming, stillness and stagnation, and the era of re-emergence. Market segmentation theory emerged in the mid-1950’s and flourished during the period between mid-1950’s and the late 1970’s. During the 1980’s the theory lost its interest in the scientific community and no significant contributions were made. Now, towards the dawn of the new millennium, new approaches have emerged and market segmentation has gained new attention.

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.

Word-of-mouth-forskning – Från ett beteendevetenskapligt perspektiv mot ett företagsperspektiv

Syftet med denna artikel är att systematisera och analysera litteratur som anknyter till word-of-mouth-kommunikation (hädanefter WOM). Med konsumentdominerad marknadskommunikation avses att konsumenterna sinsemellan oberoende av företaget söker och sprider marknadsinformation. Den enda motsvarande litteraturanalys som förefaller att finnas publicerad är fyrtio år gammal (Arndt 1967). Sedan dess har det tillkommit en ansenlig mängd företagsekonomisk forskning som tydligt avviker från Johan Arndts, vilken huvudsakligen baserade sig den beteendevetenskapliga litteraturen.

Customer Commitment and Key Account Management

What is the nature of customer commitment in business-to-business relationships and what are its antecedents? What Key Account Management practices help to build customer commitment? Commitment is an important element of Key Account Management since customer relationships are built upon a the foundation of commitment. Building long-term key account relationships occurs by enhancing and maintaining their commitment. Customer commitment has various antecedents, and managing commitment involves focusing on these antecedents. This paper explains the nature of commitment and describes its antecedents. It also suggests how to manage each of these antecedents to strengthen customer commitment.

Activityscape Mapping: Consumer Activity Systems as Service Context

Activity systems are the cognitively linked groups of activities that consumers carry out as a part of their daily life. The aim of this paper is to investigate how consumers experience value through their activities, and how services fit into the context of activity systems. A new technique for illustrating consumers’ activity systems is introduced. The technique consists of identifying a consumer’s activities through an interview, then quantitatively measuring how the consumer evaluates the identified activities on three dimensions: Experienced benefits, sacrifices and frequency. This information is used to create a graphical representation of the consumer’s activity system, an “activityscape map”. Activity systems work as infrastructure for the individual consumer’s value experience. The paper contributes to value and service literature, where there currently are no clearly described standardized techniques for visually mapping out individual consumer activity. Existing approaches are service- or relationship focused, and are mostly used to identify activities, not to understand them. The activityscape representation provides an overview of consumers’ perceptions of their activity patterns and the position of one or several services in this pattern. Comparing different consumers’ activityscapes, it shows the differences between consumers' activity structures, and provides insight into how services are used to create value within them. The paper is conceptual; an empirical illustration is used to indicate the potential in further empirical studies. The technique can be used by businesses to understand contexts for service use, which may uncover potential for business reconfiguration and customer segmentation.

The Quest for Well-being in Growth Industries: Contexts, Research Design and Methodological Development

This Working Paper reports the background to the first stage of the ongoing research project, The Quest for Well-being in Growth Industries: A Collaborative Study in Finland and Scotland, conducted under the auspices of the Academy of Finland research programme The Future of Work and Well-being (2008-2011). This collaborative project provides national and transnational data, analysis and outputs. The study is being conducted in the Department of Management and Organisation, Hanken School of Economics, Finland, in collaboration with Glasgow Caledonian University, University of East London, Heriot-Watt University and Reading University, UK. The project examines policies and practices towards the enhancement of work-related well-being in growth industries, and contradictory pressures and tensions posed in this situation. The overall aim is to evaluate the development, implementation and use of work-related well-being policies in four selected growth industries. These sectors – electronics, care, finance and accounting, and tourism – have been selected on the basis of European Union and national forecasts, and demographic and socio-economic trends in employment. In this working paper we outline the background to the research study, the initial research plan, and how the survey of employers has been constructed. The working paper concludes with a brief discussion of general ongoing research issues arising in the project.

Mentoring in an Entrepreneurial Setting - The Mentor's Perspective

This paper discusses mentoring from the mentors' point of view in an entrepreneurial setting. The aim of the paper is to present why mentoring can be considered important for entrepreneurs who are mentors and under what circumstances mentoring is valuable for the mentor. A pilot mentorprogramme was conducted among women entrepreneurs during 1998. A study was made in order to examine the mentors’ perception of the programme. Firstly mentoring and entrepreneurship in Finland are discussed briefly. Secondly the results of the study are presented. The results of the study show that mentoring can be valuable for the mentors both on a vocational and a personal level. However, it is important to choose the mentees of the programme on a rather strict basis. The results demonstrate a need to be careful in choosing mentees.

Samarbete mellan konkurrenter - en undersökning av österbottniska sm-företag

Under senare tid har förekomsten av samarbete mellan konkurrerande sm-företag ökat. Forskningen kring ämnet har dock bedrivits i mindre skala, framför allt om man beaktar finländska (nordiska) förhållanden. Syftet med denna undersökning är att kartlägga förekomsten av samarbete mellan konkurrerande sm-företag i Österbotten (Finland), samt beskriva dessa. Gällande demografiska variabler jämförs dessa företag även med sm-företag som inte samarbetar. Data insamlades genom en enkät utskickad i november 2001 till 345 sm-företag i Österbotten. Svarsprocenten var 35.1. Av de respondenter som besvarade enkäten, var 47.9 procent involverade i ett eller flera samarbeten med ett eller flera företag som var deras konkurrenter. Samarbete mellan konkurrenter är således inte ett ovanligt fenomen, utan innefattar allt från informella, operativa samarbeten till formella, strategiskt viktiga samarbeten. Samarbete inom produktion var den mest vanligt förekommande formen av samarbete. Partnern kom från Finland, även om målmarknaderna för samarbetet fanns både i Finland och i utlandet. Denna undersökning kunde inte identifiera någon större skillnad mellan de sm-företag som samarbetade med konkurrenter och de sm-företag som inte samarbetade. Det intressanta är således att det inte verkar finnas några skillnader vad gäller ålder, omsättning, omsättningsökning, underleverans- och exportverksamhet mellan de samarbetande och de icke samarbetande företagen. Skillnaderna bör således sökas i andra variabler. Den enda signifikanta skillnaden kunde upptäckas i upplevelsen av konkurrens. Tidigare forskning har identifierat att osäkerhet i konkurrensen är ett incitament till att börja samarbeta med konkurrenter. Denna undersökning förstärker detta antagande. De samarbetande företagen upplevde att konkurrensen var hårdare än de icke samarbetande företagen. Bland de samarbetande företagen var det speciellt de mindre (med en personalstyrka mellan 10 och 50 arbetstagare) som upplevde att konkurrensen var hård. Undersökningen har finansierats med stipendiemedel från Sparbanksstiftelsen i Vasa och Handlande Gustav Svanljungs fond.