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{{Marketing}}
'''Service-dominant''' ('''S-D''') '''logic''', in [[behavioral economics]], is an alternative theoretical [[Conceptual framework|framework]] for explaining [[value creation]], through exchange, among configurations of actors. It is a [[dominant logic]]. The underlying idea of S-D logic is that humans apply their competences to benefit others and reciprocally benefit from others' applied competences through service-for-service exchange.
Service-dominant logic has been developed by [[Stephen Vargo]] and [[Robert Lusch]]. The goal of developing S-D logic is to contribute to the understanding of human value [[co-creation]], by developing an alternative to [[Market economy|traditional logics of exchange]].
Since Vargo and Lush published the first S-D logic article, "Evolving to a New Dominant Logic for Marketing",<ref>For this work, Lusch and Vargo have been awarded the Harold H. Maynard Award by the American Marketing Association for "significant contribution to marketing theory and thought" and the Sheth Foundation Award for "long term contributions to the field of marketing."</ref>
== The core ==
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=== Axioms and foundational premises ===
The core ideas of S-D logic are formulated into foundational premises. Vargo and
{| class="wikitable"
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The first axiom (FP1) {{'}}''Service is the fundamental basis of exchange''{{'}} is based on the previously introduced definition of service as the application of operant resources (primarily knowledge and skill) for the benefit of another actor. S-D logic argues that it is always fundamentally service, rather than goods, per se, that actors exchange as they strive to become better off.
The second axiom (FP6), {{'}}''Value is cocreated by multiple actors, always including the beneficiary''{{'}}, contradicts the traditional worldview, in which firms are seen as the sole creator of value. Rather, it suggests that value is something that is always cocreated through the interaction of actors, either directly or indirectly (e.g., through goods). This axiom also enables one to see more clearly that the service-oriented view is inherently relational, because value does not arise prior to exchange transaction, but rather following it, in the use of the exchanged resources, in a particular context and in conjunction with resources provided by other service providers. This value creation is seen as unfolding, over time, with a consequence of continuing social and economic exchange, implicit contracts, and relational norms.
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In the planning phase enters what we know as: development and analysis while in the execution phase enters the design and launch.
The elements of the Services design are like a detailed blueprint that communicate customers with employees so they are aware of what is expected to be given and received. (Fitzsimmons, 2006)
== Service-dominant logic orientation ==▼
Recent research has introduced an instrument to measure the service-dominant logic orientation for service firms (Karoen, Bove, and Lukas, 2012). According to these authors firms possess certain capabilities to enact S-D logic in service exchanges and thereby co-create value. There are six service-driving capabilities which enables value co-creation which are relational interaction capability, ethical interaction capability, individuated interaction capability, empowered interaction capability, developmental interaction capability, and concerted interaction capability (Karpen, Bove, Lukas and Zyphur, 2015). The impact of S-D logic orientation on perceived value, trust and affective commitment was found to be positive. This research also showed a positive impact of S-D logic on market performance which further impacted financial performance of firms in the retail banking and automotive sectors.▼
== Applications ==
S-D logic was quickly adopted throughout the world of marketing and services research, and also many related research domains. For a complete overview of the [[dissemination]] and [[institutionalisation]] of S-D logic in research, see Ehrenthal, Gruen and Hofstetter (2021).
Within marketing, S-D logic has been applied to virtually all of its sub-disciplines. In supply chain management and logistics, scholars have started to think in terms of value networks and systems and focus on cocreation due to the influence of S-D logic (see e.g. Flint and Mentzer, 2006; Tokman and Beitelspacher, 2011, Yazdanparast, Manuj, and Swartz, 2010). S-D logic was also linked with branding and brand cocreation early on (Ballantyne and Aitken, 2007, Merz, He and Vargo, 2009) and identified as the natural ally of consumer culture theory (CCT) (Arnould, 2007). S-D logic is shown to facilitate a seamless integration of ethical accountability in marketing decision-making (Abela and Murphy, 2008) and used to guide practitioners to achieve and sustain strategic advantage (Bettencourt, Lusch, and Vargo, 2014). Recently, S-D logic has also been applied to marketing sub-disciplines such as international marketing (Akaka, Vargo, and Lusch, 2013) and social marketing (Luca, Hibbert, and McDonald, 2015; Russell-Bennett, Wood, and Previte, 2013).
The S-D logic framework has also found considerable resonance outside of marketing. S-D logic has been applied in such diverse fields as information systems (Alter, 2010), health disciplines (see e.g. Hardyman, Daunt, & Kitchener, 2015; Rehman, Dean, & Pires, 2012), arts philosophy (Boorsma, 2006), tourism management (see e.g. FitzPatrick, Davey, Muller, & Davey, 2013), public management (Osborne, Radnor, and Nasi, 2013) and innovation studies (Michel, Brown, and Gallan, 2008).
▲Recent research has introduced an instrument to measure the service-dominant logic orientation for service firms (Karoen, Bove, and Lukas, 2012). According to these authors firms possess certain capabilities to enact S-D logic in service exchanges and thereby co-create value. There are six service-driving capabilities which enables value co-creation which are relational interaction capability, ethical interaction capability, individuated interaction capability, empowered interaction capability, developmental interaction capability, and concerted interaction capability (Karpen, Bove, Lukas and Zyphur, 2015). The impact of S-D logic orientation on perceived value, trust and affective commitment was found to be positive. This research also showed a positive impact of S-D logic on market performance which further impacted financial performance of firms in the retail banking and automotive sectors.
Moreover, scholars are extending the S-D logic with applicable management tools such as the Service-Dominant Strategy Canvas ( Lüftenegger, Comuzzi and Grefen, 2015) and the [[Service-Dominant Business Model Radar]] ( Lüftenegger, 2014) .▼
▲Moreover, scholars are extending the S-D logic with applicable management tools such as the Service-Dominant Strategy Canvas ( Lüftenegger, Comuzzi and Grefen, 2015) and the [[Service-Dominant Business Model Radar]] ( Lüftenegger, 2014)
Analysing more than 1700 scientific publications using Service-dominant logic, [https://doi.org/10.1007/978-3-030-48332-6_19 Ehrenthal, Gruen and Hofstetter (2021)] identify the following basic approaches, good practices, and quality criteria for conducting (and reviewing) Service-dominant logic research:
{| class="wikitable"
|-
! Research goal
! Applying
! Extending
! Testing
|-
! Specific goal
| Applying S-D logic to some phenomenon
| Extending some theory, concept, method using S-D logic
| Testing some theory, concept, method using S-D logic
|-
! Research type
| Conceptual
| Conceptual/empirical
| Empirical
|-
! Grounding in S-D logic
| Transcend phenomenon into S-D logic, using all FPs, pronouncing FPs as needed, potentially starting with FP6
| Identify and overcome G-D boundaries by applying S-D logic, using all FPs, pronouncing FPs as needed, with special relation to FP1
| Frame the issue holistically using all FPs, pronouncing FPs as needed
|-
! Basic approach
| Contrast G-D to S-D logic in order to envision, explicate, relate, and debate the phenomenon as per the delta identified
| Contrast G-D logic to S-D logic in order to identify and overcome existing shortcomings
| Contrast G-D logic to S-D logic to derive competing, testable hypotheses to judge which leads to more accurate predictions
|-
! Terminology
| colspan="3" | Define the minimal S-D logic terminology / vocabulary necessary. <br/> Avoid linguistic G-D relapses.
|-
! Substantive impact
| colspan="3" | Explicitly state the core contribution/value of using S-D logic. <br/> What phenomena or new aspects did S-D logic uncover / explain and how? <br/> What are implications of S-D logic and to whom do they make a difference?
|-
! Conceptual impact
| colspan="3" | How is S-D logic related to/different from the existing logic? <br/> Does S-D logic lead to different predictions/outcomes and how? <br/> How are constructs changed when using S-D logic?
|-
! Methodological impact
| colspan="3" | What methodological challenges does S-D logic help overcome and how? <br/> How does S-D logic change the way that research is conducted? <br/> How does S-D logic enable generalizable methodological advances?
|-
! S-D logic impact
| colspan="3" | How does the research advance S-D logic itself? <br/> How does thought and behavior change as a result of using S-D logic?
|}
== Conferences ==
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* Arnould, E. J. (2007). Service-dominant logic and consumer culture theory: Natural allies in an emerging paradigm. In R. Belk, W. and J. Sherry Jr, F. (Eds.), Research in Consumer Behavior: Consumer Culture Theory (Vol. 11, pp. 57–78). Oxford, UK: JAI Press, Elsevier.
* Ballantyne, D., and Aitken, R. (2007). Branding in B2B markets: insights from the service-dominant logic of marketing. Journal of Business & Industrial Marketing, 22(6), 363–371.
* Bettencourt, L. A., Lusch, R. F., and Vargo, S. L. (2014). A Service Lens on Value Creation. ''California
* Boorsma, M. (2006). A strategic logic for arts marketing: Integrating customer value and artistic objectives. International Journal of Cultural Policy, 12(1), 73–92.
* Chandler, J. D., and Vargo, S. L. (2011). Contextualization and value-in-context: How context frames exchange. ''Marketing Theory'', 11(1), 35–49.
* Ehrenthal J.C.F., Gruen T.W., Hofstetter J.S. (2021). Recommendations for Conducting Service-Dominant Logic Research. In: Dornberger R. (eds) New Trends in Business Information Systems and Technology. Studies in Systems, Decision and Control, vol 294. Springer, Cham, 281–297. {{ISBN|978-3-030-48332-6}} https://doi.org/10.1007/978-3-030-48332-6_19
* FitzPatrick, M., Davey, J., Muller, L., and Davey, H. (2013). Value-creating assets in tourism management: Applying marketing's service-dominant logic in the hotel industry. Tourism Management, 36(June), 86–98.
* Flint, D. J., and Mentzer, J. T. (2006). Striving for integrated value chain management given a service-dominant logic for marketing. In R. F. Lusch and S. L. Vargo (Eds.), The service-dominant logic of marketing: Dialog, debate, and directions (pp. 139–149). Armonk, New York: ME Sharpe.
* Hardyman, W., Daunt, K. L., and Kitchener, M. (2015). Value co-creation through patient engagement in health care: a micro-level approach and research agenda. Public Management Review, 17(1),
* Karpen, I. O., Bove, L. L., & Lukas, B. A. (2012). Linking service-dominant logic and strategic business practice: A conceptual model of a service-dominant orientation. Journal of Service Research, 15(1), 21–38.
* Karpen, I. O., Bove, L. L., Lukas, B. A., & Zyphur, M. J. (2015). Service-dominant orientation: measurement and impact on performance outcomes. Journal of Retailing, 91(1),
* Layton, R. A. (2011). Towards a theory of marketing systems. ''European Journal of Marketing'', 45(1/2), 259–276.
* Luca, N. R., Hibbert, S., and McDonald, R. (2015). Towards a service-dominant approach to social marketing. Marketing Theory.
* Lüftenegger, E., Comuzzi, M., and Grefen, P. W. P. J. (2015). Designing a tool for service-dominant strategies using action design research. Service Business, 1-29. doi:10.1007/s11628-015-0297-7
* Lüftenegger, E. (2014). Service-Dominant Business Design. Eindhoven University of Technology. p. 179. {{ISBN|978-90-8891-885-8}}
* Lusch, R. and S. Vargo (2006). [http://mtq.sagepub.com/cgi/reprint/6/3/281.pdf Service Dominant Logic: Reactions, Reflections, and Refinements], ''Marketing Theory'' 6 (3), 281–288.
* Lusch, R. F., and Vargo, S. L. (2014). ''Service-dominant logic: Premises, perspectives, possibilities''. New York: Cambridge University Press.
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* Scott, W. R. (2001). ''Institutions and organizations''. Thousand Oaks: Sage.
* Tokman, M., and Beitelspacher, L. S. (2011). Supply chain networks and service-dominant logic: suggestions for future research. International Journal of Physical Distribution & Logistics Management, 41(7), 717–726.
* Vargo, S. L., and Lusch, R. F. (2004). [http://dret.net/lectures/ssme-spring07/VargoReading-Recommended.pdf 'Evolving to a New Dominant Logic for Marketing'], ''Journal of Marketing'', 68(1),
* Vargo, S. L., and Lusch, R. F. (2008). Service-dominant logic: continuing the evolution. ''Journal of the Academy of Marketing Science'', 36(1),
* Vargo, S. L., and Lusch, R. F. (2011). It's all B2B...and beyond: Toward a systems perspective of the market. ''Industrial Marketing Management'', 40(2), 181–187.
* Vargo, S. L., and Lusch, R. F. (2016). Institutions and axioms: an extension and update of service-dominant logic. ''Journal of the Academy of Marketing Science'', 44(4), 5-23.
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== Further reading ==
* Gronroos, C. (2006). [http://mtq.sagepub.com/cgi/reprint/6/3/317.pdf Adopting a Service Logic for Marketing], ''Marketing Theory'', 6 (3), 317–333.
* Gronroos, C. (2011). [http://mtq.sagepub.com/content/11/3/279.abstract Value co-creation in service logic: A critical analysis], ''Marketing Theory'', 11(3), 279–301.
* Lusch, R.F., Vargo, S.L and O'Brien, M. (2007). Competing Through Service: Insights from Service-Dominant Logic, ''Journal of Retailing'' 83(1),
* Lusch, R.F., Vargo, S.L and Wessels, G. (2008). Toward a Conceptual Foundation for Service Science: Contributions from Service-Dominant Logic," ''IBM Systems Journal'' 47(January–March),
* Lusch, R.F., Vargo, S.L and Tanniru, M. (2010). [https://web.archive.org/web/20110516004202/http://www.sdlogic.net/Lusch_Vargo_Tanniru_2010_JAMS.pdf Service, value networks and learning], ''Journal of the Academy of Marketing Science'' 38(1), 19–31.
* Lusch, R.F. (2011). Reframing Supply Chain Management: A Service-Dominant Logic Perspective, ''Journal of Supply Chain Management'', 47, 14–18.
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