Service Dominant logic

Service Dominant Logic (S-D Logic) is a theoretical proposal of marketing discipline that highlights a paradigm shift from goods dominant logic to service dominant logic; following foundations of networked relationships, new value co-creation processes, business interactions, resources integration, the authors attempt a new interpretation in market discipline introducing the dominance of service over products and goods, thus trying to follow an approach considered more faithful and adherent to nowadays competitive context of our Service Economy.

In S-D Logic Approach and its ten foundational premises – FP), service must be understood as an application of skills through activities, processes and performances designed to produce a benefit for themselves and for third entity, directly or indirectly related. According to this view “the goods are no longer the only transaction objects, but they appear as an appliance for services provision. Service are seen as the real protagonists of interactions and transactions"; Service no longer represents a part of an asset or the intangible side of an output product. It “is the service to be really exchanged".

Service-Dominant Logic (S-D Logic) is a mindset for a unified understanding of the purpose and nature of organizations, markets and society. The foundational proposition of S-D logic is that organizations, markets, and society are fundamentally concerned with exchange of service-the applications of competences (knowledge and skills) for the benefit of a party. That is, service is exchanged for service; all firms are service firms; all markets are centered on the exchange of service, and all economies and societies are service based. Consequently, marketing thought and practice should be grounded in service logic, principles and theories.

In line with S-D logic, it follows that instead of service marketing “breaking free" from goods marketing, as has been the pursuit of the services marketing sub-discipline for the last several decades, all of marketing needs to break free from the goods and manufacturing-based model-that is, goods-dominant (G-D) logic. S-D logic embraces concepts of the value-in-use and co-creation of value rather than the value-in-exchange and embedded-value concepts of G-D logic. Thus, instead of firms being informed to market to customers, they are instructed to market with customers, as well as other value-creation partners in the firm's value network.

Thinking Out Loud

Robert F. Lusch

Capri 2009