S-D Logic Marketing Research

    According to Vargo and Lusch (2004a), service is the applicable logic for marketing.  For them, service is an interactive process of “doing something for someone” that is valued. Service dominant logic emerges as a strategic marketing concept as corporations discover the significance of services.  . Vargo and Lush’s (2004) definition of what Service dominant logic is that all businesses are service businesses and cover all the economic and also social activities. They also highlight that the service is exchanged for service. It is essentially the process of using resources for the benefit of the other parties. Consequently, since the publication of their groundbreaking journal in 2004, other different marketing scholars had diverse outlooks on the emerging concept of “service dominant logic”. The following literature review attempts to demonstrate the different outlooks on “S-D logic”.

       In the article by Per Ska ̊le ́n and Bo Edvardsson (2015), transformation from the goods-dominant (G-D) to the service-dominant (S-D) logic is explained through a case study done on a bank in Sweden. The following article argues, “The studied transformation is interwoven with changes in the professional identities of employees” (Ska ̊le ́n & Edvardsson, 2015). The case study observed in the article is of a bank that changed its marketing method from good-dominant to service- dominant logic by introducing “value creation practices” in order to renew the organization. The following article supports previous research by (Lusch and Vargo, 2014), suggesting “the structural conflict between institutional logics drives transformations from a G-D to an S-D institutional logic”. The case study results also indicate that a transformation from G-D to an S-D is more of an attitude change of employees than anything else.  The author explains that it “is about changing people and their identities in a way that makes them co-create value with their customers and institutionalize new and supportive value creation practices.” (Ska ̊le ́n & Edvardsson, 2015). In my opinion the case study considered in the article is perhaps biased to the authors’ hypothesis as it ignores many aspects in the marketing chain system.

     The S-D logic is also studied in the article by authors (Shaw, Bailey, & Williams, 2009). The main issue addressed is the concept of service-dominant logic as a research paradigm in marketing management, more specifically in the hotel industry. Such ideas are developed in detail through a case study of the UK hotel industry that draws on new empirical research undertaken by the authors. The author explains that the tourism industry should be more S-D logic based since “The tourism sector is increasingly based around the customer experience and as such suppliers and consumers interact more closely together at all stages of their relationship” (Shaw, Bailey, & Williams, 2009). The following article draws on a number of case studies to illustrate the changing nature of marketing and the importance of “customer as operant”. The case study consists of 6 different groups of hotels (hotel group: A,B,C,D,E,F,) ; National Hotel Group,

Medium-Sized Enterprise, Major Hotel Chain part of International, Medium Sized Group, International Hotel Chain an international Hotel Franchise. Each sample was analyzed according to Characteristics,        Turnover Approx. GBP, 12 mths to 2008 and Key Informant and the following information was used to critically analyze the marketing concept adapted. This article introduced and developed these ideas to demonstrate the particular relevance of S-D concept for tourism management and the processes of co-creation. The article has managed to highlight a number of exciting opportunities for further research. The two main topics indicated are “how do scale, ownership, corporate structures and business strategies influence the approaches of firms to co-creation and the S-D Logic. Secondly, what are the key aspects not only of adoptive capacity but also absorptive capacity in respect to the ability of firms to both recognise and maximise the competitive advantages that can be derived from co-creation?”

       Authors (Ballantyne & Vary, 2008) published an article discussing how Vargo and Lusch managed to challenge marketing orthodoxy and will in the future support much future innovation in both theoretical and practical terms. Ballantyne and Vary explain the importance of S-D concept to the marketing world. It is emphasized in the article that when S-D concept is accepted and applied in more businesses the role of marketers will change. They explain that “The role of the marketer becomes more focused on managing communicative interactions across a variety of modalities and in facilitating key relationships”. Thus indicating that an expanding and evolving service-dominant logic of marketing is an entrepreneurial and a social challenge that cannot easily be ignored (Ballantyne & Vary, 2008). The authors advice marketers to stay in touch with the fast changing pace of how things are done in marketing to be able to cope in the marketing world. Lastly Ballantyne and Vary clarify that even with the fast changing concepts they do not expect “markets will disappear as an exchange mechanism but they are undergoing transformation already through collaborative activity at many levels of business.”