Service-Dominant Logic In 2004, Robert F Lusch and Stephen L Vargo published their ground-breaking article on the evolution of marketing theory and practice toward “service-dominant (S-D) logic,” describing the shift from a product-centered view of markets to a service-led model Now, in this keenly anticipated book, the authors present a thorough primer on the principles and applications of S-D logic They describe a clear alternative to the dominant worldview of the heavily planned, production-oriented, profit-maximizing firm, presenting a coherent, organizing framework based on ten foundational premises The foundational premises of S-D logic have much wider implications beyond marketing for the future of the firm, transcending different industries and contexts, and will provide readers with a deeper sense of why the exchange of service is the fundamental basis of all social and economic exchange This accessible book will appeal to students, as well as to researchers and practitioners ROBERT F LUSCH is the James and Pamela Muzzy Chair in Entrepreneurship, and Professor of Marketing at the Eller College of Management, University of Arizona He is past editor of the Journal of Marketing and chairperson of the American Marketing Association Professor Lusch’s research focuses on marketing strategy and theory with a major focus on the service-dominant logic of marketing He is the recipient of many awards including the 2013 AMA/Irwin Distinguished Marketing Educator Award STEPHEN L VARGO is a Shidler Distinguished Professor and Professor of Marketing at the University of Hawai’i at Manoa Prior to entering academia, he had a career in entrepreneurial business and consulted with many corporations and governmental agencies Professor Vargo’s primary areas of research are marketing theory and thought, and consumers’ evaluative reference scales He has been awarded honorary professorships and has held visiting positions at many leading universities worldwide and is the recipient of major awards for his contributions to marketing theory and thought “Lusch and Vargo’s new volume is a radical innovation in marketing thinking The volume brilliantly advances and consolidates the S-D logic initial research proposal, intriguingly suggesting an interdisciplinary scientific paradigm which will engage numerous scholars across various knowledge domains.” Sergio Barile, Full Professor of Business Management, University of Rome “La Sapienza” “In Service-Dominant Logic: Premises, Perspectives, Possibilities, Bob Lusch and Steve Vargo bring us to an elevated understanding of service as the foundation of value and exchange in modern society The book provides in one place a compendium of existing S-D logic knowledge and, at the same time, takes us to new levels of possibilities achievable through adopting a service mindset The book should be required reading for all students of business and society, old and young Bravo!” Mary Jo Bitner, Professor and Executive Director, Center for Services Leadership, W P Carey School of Business, Arizona State University; Editor of the Journal of Service Research “If you are a business practitioner or academic who has been following, either casually or carefully, the development of service-dominant (S-D) logic, you should read this book, for it pulls together the foundations, structure, and implications of S-D logic for business practice and theory If you have not been following the development of S-D logic, you should definitely read this book, for it will alert you to a transformational framework for thinking about economic activity.” Shelby D Hunt, The Jerry S Rawls and P.W Horn Professor of Marketing, Rawls College of Business Administration, Texas Tech University “This is the most seminal contribution to management and economic thinking that I have encountered during the whole of my career Lusch and Vargo offer theory and concepts that unite the exponentially growing volume of data and research fragments from our complex modern society Still, it is not the hard sell of yet another magic management bullet The book should be read by everyone in management and economic disciplines: students, practitioners and politicians.” Evert Gummesson, Emeritus Professor, Stockholm University, Sweden “Ten years ago, Lusch and Vargo turned upside down more than 200 years of economic thought, advancing the view that capabilities rather than goods are fundamental to economic exchange, and setting the stage for the emergence of a new science of service Now they have distilled their argument to its essence in a remarkable new book that is sure to become required reading for service scientists everywhere.” Paul P Maglio, Professor of Technology Management at the University of California, Merced and Editor-in-Chief, Service Science “Service-Dominant Logic: Premises, Perspectives, Possibilities draws together nearly two decades of pioneering work and thought leadership by the authors This scholarly and provocative text provides a penetrating analysis of the new discipline of service science It combines groundbreaking research, deep insight and practical models and is an essential read for both reflective practitioners and students.” Adrian Payne, Professor of Marketing, Australia School of Business, University of New South Wales “Two thirds of the world´s population still live on less than two dollars per day To start changing this, we need to understand this huge segment of society not as passive aid recipients and consumers (Goods Dominant Logic), but as innovative entrepreneurs constantly co-creating solutions to survive in their daily life (Service-Dominant Logic) The base of the pyramid is a rich, living laboratory where actor-to-actor collaboration integrating scarce resources for value co-creation in complex subsistence ecosystems is rooted and practiced every day; where people are SDL Natives This definitive book by Lusch and Vargo provides us with the ultimate platform to better understand the complexities and opportunities of a service-dominant culture.” Professor Javier Reynoso, Service Management Research Chair, EGADE Business School, Mexico “Service-dominant logic has been widely accepted as a leading theory and thinking framework for service sciences and engineering It is now entering the consciousness of business leaders and practitioners: in multiple disciplines in business research and technology development, servicedominant logic is becoming part of the standard vocabulary and its relevance to practice is even more prominent as the data- and analytics-driven economy is emerging Written by the pioneers who defined and framed the theory and applications of service-dominant logic, this monograph is a must read for researchers and practitioners alike.” Daniel Dajun Zeng, Professor in Management Information Systems, Eller College of Management, University of Arizona; Research Faculty, Chinese Academy of Sciences; Editor-in-Chief of IEEE Intelligent Systems Service-Dominant Logic Premises, Perspectives, Possibilities Robert F Lusch University of Arizona Stephen L Vargo University of Hawai’i University Printing House, Cambridge CB2 8BS, United Kingdom Published in the United States of America by Cambridge University Press, New York Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9780521124324 © Robert F Lusch and Stephen L Vargo 2014 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2014 Printed in the United Kingdom by CPI Group Ltd, Croydon CR0 4YY A catalog record for this publication is available from the British Library Library of Congress Cataloging in Publication data Lusch, Robert F Service-dominant logic : premises, perspectives, possibilities / Robert F Lusch, University of Arizona and Stephen L Vargo, University of Hawaii pages cm Includes bibliographical references and index ISBN 978-0-521-19567-6 (alk paper) Customer relations – Philosophy Customer services – Philosophy Service industries – Philsophy I Vargo, Stephen L., 1945– II Title HF5415.5.L85 2014 658.8′12–dc23 2013045870 ISBN 978-0-521-19567-6 Hardback ISBN 978-0-521-12432-4 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate To Mark and Stephen Lusch for their assistance, encouragement, and lively debates Robert F Lusch To my students, past, present, and future Stephen L Vargo Contents List of exhibits Foreword Preface Acknowledgments Part I Premises The service-dominant mindset Introduction Specialization and exchange Goods-dominant logic centricities Toward transcendence The four “axioms” of S-D logic Market-ing with S-D logic: the counterintuitive nature of S-D logic The contextual nature of value creation: the structurated world of S-D logic Outline of the book Roots and heritage Introduction Foundations of economics The impact of a goods-dominant paradigm The shift toward consumer orientation The rise and evolution of service(s) thought Divergence from the goods-dominant paradigm Convergence toward service-dominant logic Moving forward Axioms and foundational premises Introduction The lexicon of service-dominant logic Axiom and foundational premise 1: service is the fundamental basis of exchange Foundational premise 2: indirect exchange masks the fundamental basis of exchange Foundational premise 3: goods are distribution mechanisms for service provision Foundational premise 4: operant resources are the fundamental source of competitive advantage Foundational premise 5: all economies are service economies Axiom and foundational premise 6: the customer is always a cocreator of value Foundational premise 7: the enterprise cannot deliver value, but can only offer value propositions Foundational premise 8: a service-centered view is inherently customer oriented and relational Axiom and foundational premise 9: all economic and social actors are resource integrators Axiom and foundational premise 10: value is always uniquely and phenomenologically determined by the beneficiary Contrasting logics Concluding comments Service as a guiding framework Introduction Prior views of services misled A more comprehensive view of service Implications of “service” thinking Concluding comments Part II Perspectives It’s all actor-to-actor (A2A) Introduction Overthrowing divisions Generic actor-to-actor exchange Actor-centric exchange systems Concluding comments The nature, scope, and integration of resources Introduction Resources explained Resources are operand and operant Actors as resource integrators Concluding comments Collaboration Introduction Actor-to-actor collaboration Collaboration and information technology Coproduction and cocreation Enterprise boundaries Toward collaborative advantage Implications for system viability Concluding comments Service ecosystems Introduction Networks Ecosystems Micro, meso, and macro systems The service ecosystem as a system of processes From service ecosystems to ecosystems services Concluding comments Part III Possibilities Strategic thinking 10 Introduction Zooming out versus zooming in: seeing the bigger picture Service ecosystems: developing a systems view of exchange Collaboration: designing for density and relationships Value proposing: cocreating value with multiple stakeholders Designing: developing value-creating ecosystems Configuring: taking advantage of unstable environments Toward an S-D logic strategy appraisal Concluding comments Conclusions and considerations Introduction Convergence A meta-idea The bigger picture More inversions Next steps Concluding comments Appendix: Reflection and dialogue Index manufacturing jobs are the “real” jobs – the “good jobs” and service jobs are less desirable Evaluate this view Similarly, Fisher’s differentiation between primary (agriculture), secondary (manufacturing), and tertiary stages has been interpreted to mean that “services” characterize the latter and has led to the suggestion that advanced economies have entered a “new services economy.” Evaluate this notion Has service just now become important? Some have suggested that the difference between G-D logic and S-D logic is just a switch from seeing goods as most important to seeing services as most important in economic exchange Is this a correct view? If so, why? If not, why not? How might marketing thought in the twentieth century have developed differently if S-D logic had emerged as the dominant thinking following Bastiat’s insight that the beginning and end of economic science is services exchanged for services? If Adam Smith were alive today, how might he recast his Wealth of Nations treatise? In brief, is there a new Wealth of Nations? Chapter 3: Axioms and foundational premises I n Exhibit 3.1 the foundational premises (FPs) of S-D logic were classified under four central FPs or what were called axioms Can you suggest an alternative classification? Explain Do you believe the axioms and foundational premises are equally applicable for an early stage developing economy as for a more mature economy? For example, is S-D logic just as applicable in Bolivia as it would be in Sweden? Is it as applicable for explaining Europe during the fifth century BC as it is today? If you were 18 years old and had a choice between (a) receiving $2,000,000 (US dollars) and not being able to either gain additional knowledge and skills or exchange your skills and competences with other actors or (b) being able to continue your education, learning, and knowledge enhancement throughout life and exchange your skills and competences with other actors, which would you select? Discuss Can a legal economic transaction occur in a market economy without relationship? Explain your reasons List the operant resources of a business enterprise you are familiar with Which you think are the most important to developing strategic advantage? Explain the type or nature of the strategic advantage that is gained How can a business enterprise understand value from the perspective of the beneficiary of a market offering? How can a government enterprise understand value from the perspective of the citizen beneficiaries of government-provided service(s)? Who in the business firm should be responsible for making the firm’s value proposition? Explain why Would the data that a nation would need or find helpful for understanding the economy be different under G-D logic and S-D logic? If you see a need for change, what new measures would you suggest and why? 10 Brian Arthur, as mentioned in this chapter, essentially argues that resources and resource integration begets additional resources We suggested that this means that markets are unbounded Do you agree or disagree and why? Chapter 4: Service as a guiding framework Identify some of the activities or habits of an enterprise known for its service nature (e.g., airline, health care, education, finance) that characterize a G-D or output orientation Suggest ways that this enterprise could become more S-D oriented Are the IHIP characteristics of services desirable or even possible for goods? Explain your reasons Are there markets where efficiency is more paramount in importance than effectiveness? An S-D orientation begins with a focus on providing benefits to others It begins with a desire to help others in return for service or help; it begins with a service-for-service mindset Is this mindset consistent with an entrepreneurial spirit for enterprise? Why or why not? S-D logic argues that service represents the general case, or the common denominator, of the voluntary exchange process among humans and that this occurs across time and space Service is what is always exchanged Goods, when employed, are aids to the service process Critics have argued that this universal perspective goes against pluralism or a willingness to accept alternative views of the world Do you agree or disagree? Explain your position The S-D logic-informed G-D principles (see Exhibit 4.4) appear to suggest that a firm’s traditional marketing mix should be cocreated Agree or disagree and provide examples to support your answer Discuss the normative prescriptions that result from S-D logic Do these prescriptions apply in all situations or contexts? Can an enterprise make a value proposition that is compelling or appealing to all direct stakeholders? Give an example Chapter 5: It’s all actor-to-actor (A2A) If all actors are generic, what is the purpose of people in management or executive education taking part in role-playing exercises? Discuss whether the organization you work for (or have worked for in the past) is more a GD or S-D organization Generalized exchange is less common in market society than in premarket or non-market society Do you agree or disagree? Discuss Develop examples of redistribution as an exchange institution as you have experienced it in an organization Explain why this redistribution occurred How much agency you have in your life? What are the constraints on your agency? Think of some of the major actions you have taken over the past twelve months What was the trade-off or implicit exchange that occurred? Express these as opportunity costs Why actors in a high-level market economy have more access to offerings and more tangible things but also often experience frustration and a scarcity of time? Explain the following concepts in this situation: cocreating value, resource integration, density, system viability Can society change without the exchange of service(s)? Explain your position Chapter 6: The nature, scope, and integration of resources We suggest that tangible resources and natural resources are not the most important resources for human advancement Yet humans need natural resources and other tangible resources for survival Can you explain this apparent contradiction? Do you agree or disagree with us? Explain The conventional wisdom is that when people are put in prison for whatever reason, they are no longer useful and in fact are often viewed as a liability and not a resource Using the ideas presented in this chapter, how might prisoners become resources? Consider a household that is living in a community of 40,000 people and contemplating moving to a city of million people that is 1,000 miles away and in which it has no family ties With this move, what are the (a) market-facing resources, (b) public resources, and (c) private resources the household should consider? Which of these resources might be lost or foregone, and which might be gained What are the implications for the service(s) the family will be able to access? Select a firm you are familiar with and identify what you think its ten most valuable resources are and then classify them as market-facing, private, and public resources One could view the management of resources as driven by the state of the wants and needs of actors and the state of science and technology Should innovation to develop new resources be driven more by the “pull” of the state of wants and needs of actors or by the “push” of current science and technology? Do humans invent tools to become more efficient and effective but at the cost of the inefficient use of natural resources? How can the concepts and ideas of S-D logic, and especially those related to resource integration and system viability, shed light on this issue? Develop a set of ideas for increasing density with your existing resources (market and nonmarket facing) Discuss what you believe is the top idea you come up with and how it would influence the viability of your system If you were head of new product innovation for a large publicly traded firm what ideas for managing new product innovation could be derived by concepts in this chapter? Chapter 7: Collaboration Consider the organization you work for and your current job What efforts you engage in to your job that is normalizing practice? Discuss how representational practices also influence your job Can you think of examples in which you have used IT to coproduce and/or collaborate with other actors? Describe these examples and what went well and not so well Is it desirable for a firm to develop market offerings that minimize cocreation processes? Generate a few ideas for offerings that minimize cocreation processes Can you imagine an offering that has no cocreation processes? Six factors drive how much coproduction an actor engages in and these are: expertise, control, tangible capital, risk taking, psychic benefits, and economic benefits Use these to explain how much your family or household engages in home-based production activities (cooking, cleaning, home schooling, etc.) Are there limits to the division of labor in society? Elaborate and discuss If you were mayor of your city, how would you engage the citizens to be coproducers of various services? Can these activities also enhance cocreation of value for the citizens? Consider your experiences in general with children under the age of six versus adults over the age of twenty Reflect on the five key sources of collaborative advantage, and discuss whether children or adults are more inherently competent at collaboration We discussed an extended view of the enterprise Apply this thinking to your household What are the implications for system viability? Chapter 8: Service ecosystems What is the relationship between outsourcing and the concepts of markets, supply chains, and marketing channels? Four key elements define a service ecosystem: (1) relatively self-contained, (2) selfadjusting system of resource-integrating actors, (3) shared institutional logics, and (4) mutual value creation through service exchange In your opinion, which of these key elements is the most important? Explain your reasoning How can a service ecosystem become more resilient? How are the ten foundational premises of S-D logic related to service ecosystems? Take the concept of a service ecosystem and develop a graphical representation of your own personal service ecosystem Service systems in a city include governing, water, energy, waste disposal, nutrition, safety, transport, communication, education, entertainment, and health The mayor recently appointed you as the first chief innovation officer for the city Using at least one of these service systems, apply the concepts in this chapter and prior chapters to develop a list of at least three innovative service offerings Service systems mentioned in this chapter were part of a typical city Identify and discuss whether a country would entail different service systems What is the role of a leader such as a CEO in a service ecosystem? Consider your home or place of business and identify ecosystem services that could benefit you Chapter 9: Strategic thinking Consider an enterprise you have worked for and describe the service it offers For the service described above, what is the enterprise’s value proposition? Is it compelling to potential service beneficiaries (customers)? Would it also resonate with employees and customers? Why or why not? Next describe how service beneficiaries use the service How is it integrated with other resources? How does use change under different contexts? Using the situation above identify several key suppliers to the enterprise and describe the service they provide How is each service integrated with other resources? How does this change under different contexts? Enterprises also perform many service(s) within the enterprise Identify one or two of these and discuss the service and how it is provided Why is this service provided within the firm rather than via market exchange? Identify one of the enterprise’s most important resources Try to be fairly specific – for instance, if you identify human resources, you might specify the product engineering staff or the salesforce Do this for both a key resource within the enterprise and one outside (i.e., in the service ecosystem) Map the service ecosystem of either the firm or a key department such as the information systems department or the corporate social responsibility department What are the shared institutions in this service ecosystem? Develop ideas for the redesign of the service ecosystem Are shared institutions a barrier to change or they motivate change? Agriculture is one of the oldest industries Develop some innovative ideas reconfiguring for improved density Specifically consider reconfiguring around form, time, place, and ownership Chapter 10: Conclusions and considerations Do you agree that S-D logic is a meta-idea? Explain your reasons Describe how S-D logic has helped you to understand a complex service ecosystem you are familiar with S-D logic needs to be understood and adopted in its entirety Is this possible? Why or why not? Do you agree that society is a very large-scale service ecosystem, with the sole purpose of value cocreation through resource integration and service exchange? Explain why you agree or disagree The more we innovate the more the innovation frontier expands Do you agree or disagree? Give your reasons Why is entrepreneurial management aligned with S-D logic? Why is market-ing and innovation essentially the same business function? What is more superordinate, invention or innovation? Give your reasons Discuss the need to better understand institutions in order to apply S-D logic 10 Where you see the biggest needs for mid-range theory in S-D logic? Index abductive logic, 189, 196 accessness, 133, 134, 144–145, 152, 154 Achrol, Ravi, 46 actor(s) actor-to-actor (A2A), 7, 9–10, 70, 102–103, 111, 112, 113 see also networks, actor-to-actor centricity, 113 economic and social, 74–78 generic, 10, 74, 75, 114–115 Alderson, Wroe, 49, 159 Aristotle, xv, 7, 33 Arthur, Brian, xviii, 77, 215 Bain, Alexander, 138 Bastiat, Frédéric, xv, 31, 35, 36, 39, 58, 101, 214 big data, xvi bounded rationality, 56 brand, 14, 76, 112, 149, 185, 187 community, 21, 72, 124 business model, xviii, xix, 24, 37, 181 business strategy, xxii business-to-business (B2B)., xviii, 10, 104 see also marketing, business-to-business business-to-consumer (B2C), xviii, 10, 104 Callon, Michel, 18 Clark, Herbert H., xv Coase, Ronald, 59 cocreation coproduction, 145–147 of value, 9–10, 15–16, 71, 90, 94, 144–145 collaboration, 136–154, 184–186 collaborative advantage, xxii, xxiv, 28, 149, 150, 152, 154, 219 sources of, 152 competence(s), 12, 13, 152 absorptive and adaptive, 150, 154 core, xvii, 48 dynamic capabilities, 46 knowledge and skills, 12–15, 63–66, 104–105, 119–134 learning, 152 predictive, 191 resource integration, 151 see also resources, operant and operand competitive advantage, xxii, 46, 65 complexity see system(s), exchange consumer orientation see customer orientation consumer-to-consumer (C2C) See customer-to-customer (C2C) context, 23, 189 see value-in-context cooperation, xviii, 161 coordination, 4, 18, 140, 141 customer culture, 14, 25, 106, 166, 210 customer lifetime value (CLV), 73, 148, 204 customer relationship management (CRM), 124, 172 orientation, 33, 41, 43, 69, 72, 74, 112 customer-to-customer (C2C), xviii, 10 density see resource(s), density design thinking, xxii division of labor, 33, 40, 61, 104, 185 see also specialization dyads see networks-dyads and triads economic actors See actor(s), economic and social economic exchange, 4–6, 21, 33–34, 47–48, 62–63, 67, 128 economic theory, 20, 33–39, 91 evolutionary economics, xvi, 46 experimental economics, xvi neoclassical, xvi, xxii, 4, 8, 93, 94, 115, 130, 206 new institutional economics, xvi ecosystems biological/natural, 28, 161, 163, 164, 173, 174 effectiveness vs efficiency, 86, 209 effectuation theory, 26, 77, 189, 192 Elop, Stephen, 158 entrepreneurship, xix, 173, 192 enterprise boundaries, 147–149 Etgar, Michael, 146 exchange action as, 115 actor-to-actor, 106 complex, 108, 113 generalized, 107, 108 restricted, 106, 107 social, systems, 112 see also service-for-service exchange exchange institutions market exchange, 110, 111 reciprocity, 109 redistribution, 109, 110 experience see value, phenomenological experience economy, 16, 45, 202 four Ps see marketing mix Gates, Bill,, 136 Getty, Paul J.,, 126 Giddens, Anthony, 23 global village, 165 goods as appliances, 13, 15, 63–64, 70, 88, 194 as intermediaries in service delivery, 13, 58, 90 centricity, definition of, 62–64 intangible, 12, 17, 20, 84 tangible, 31, 34, 40 vs service, 43, 88–89 see also offerings goods-dominant (G-D) logic curriculum, 14 definition of, 5–8 lexicon, 204 mindset, xxii, 204 paradigm, xxiii, 9, 31, 32, 33, 35, 40, 42, 43, 45, 78 government-to-citizen (G2C), xviii Gummesson, Evert, xv, 83, 117 Hamel, Gary,, 45 Helgesson, Claes-Fredrik, 139 Hooke, Robert, xv Hunt, Shelby, xv, 45, 46 IBM, xv, xx, 48 IHIP characteristics, 19, 43, 85, 89, 216 Industrial Marketing and Purchasing Group (IMP), 46 Industrial Revolution, 33, 40, 61, 70, 129, 207 information technology, xix, xxii, 67, 141, 151 innovation, xviii, 77, 122, 125, 145, 181, 208–209 goods, 63–64 management of, 26 service, 145 venue for, 24 innovator, xv, xvii, institution(s), 23–26, 112, 143, 197, 210 see also exchange instituitons institutional logics, 3–4, 24, 169 iron cage, 113 overlapping, 167 shared, 161, 166–167 institutionalization, 18, 36, 198, 207 deinstitutionalization, 186 reinstitutionalization, 186 intangibles, 14, 32, 43, 62, 67, 89, 134 intangibility see resource(s), tangible and intangible intellectual property, 14, 210 isomorphism see service ecosystems isomorphism of science, 55 Kjellberg, Hans, 139 Kotler, Philip, xv, 46 language, 83, 120, 138–139, 166 Levitt, Theodore, xv, 6, 22 lexicon 69, 196, 202 see also goods-dominant (G-D) logic, lexicon; service-dominant (S-D) logic, lexicon liquification, 141 Löbler, Helge, 138 macro level, 170, 180, 210 structures, xxii, 25, 160, 170, 175, 181 systems, xxii, 28, 113, 169, 170, 201, 204 see also service ecosystem; specialization, macro macromarketing, xxi Maglio, Paul, xx marginal utility theory, market orientation, 18 market(s), xvii, xviii as institutionalized solutions, 25, 26, 60, 61, 113, 114, 192, 210 dynamic, 139, 142, 143 preexisting, xvii, 7, 181 marketing business-to-business (B2B), xxi, 46, 73, 106 consumer, xxi goods, xxi industrial, xxi international, xxi retail, xxi service, xxi, 32, 44, 89 social, xxi technology, xxi tourism, xxi marketing mix, 24, 26, 44, 46, 71, 90, 126, 208, 216 marketing myopia, 6, 22, 76 Maxmin, James, 46 McCarthy, Jerome, 126 McGregor, Douglas, 105 McLuhan, Marshall, xv, 139 meso level, 25, 170, 180, 210 structures, xxiv, 175 systems, xxii, 28, 169, 170, 201, 204 see also service ecosystems meta-idea, xix, 28, 202, 203, 204, 211, 220 micro level, 25, 28, 170, 180, 181, 201, 210 structures, 169 systems, xxii, 169, 170, 204 see also service ecosystem; specialization, macro mid-range theory, 26, 29, 211, 221 Mill, John Stuart, 35 modularization, 140 money as service rights, 15, 17, 21, 57, 60, 88, 148 indirect exchange, 58–62 Morse, Samuel, 138 networks, 159–160 actor-to-actor (A2A), 90, 93, 95, 103, 105, 106, 111, 112, 114, 116, 119, 168 dyads and triads, 112, 159 dynamic, 114, 181 exchange, 75, 95, 105, 127 many-to-many, 142, 154 weak ties, 160 new services economy see services economy Newton, Isaac, xv Newtonian mechanics, 8, 36, 38, 39, 40, 214 Normann, Richard, xv, 115, 133 norms see institution(s) offerings firm, 208 intangible, 187 markets, 16, 18, 22, 65, 70, 167, 213 service, xxii, 58, 77, 92, 104, 124, 139, 145, 152, 191, 197, 219 see also value proposition; goods old enterprise logic, 4, 46 outcome vs output, xvi, 44 output see goods Pasteur, Louis, xv Penrose, Edith, xv, 5, 119 performativity, 18, 19, 25, 36, 37, 105, 139, 207, 213, 214 Pisano, Gary, 46 platform, xix, 24, 140 Plato, 101, 102 practices, 24 exchange vs integrative, 140 integrative, 137, 140, 142, 153, 163, 166 normalizing, xix, 137, 139, 140, 143, 166, 167 representational, 137, 139, 218 see also performativity; structuration theory Prahalad, C K., 45, 64 producer-consumer divide, 21, 129 Ramaswamy, Venkatram, 64 resource integration, xviii, xviii, 10, 16, 75, 77–78, 130–132, 151 see also service-dominant (S-D) logic, axiom and FP9 resource integrators, 16, 128–130 resource(s) definition of, 121 density, 116, 134 human appraisal of, 121 market-facing, 6, 21, 22, 127, 131, 149, 183, 217 operant and operand, 14, 57, 123–124 private, 6, 16, 21, 22, 128 public, 127–128 rebundling, xxii, 185, 198, 220 static and dynamic, xxii, 13, 14, 47, 57, 65, 66, 93, 94, 119, 120, 123, 124, 125, 130 tangible and intangible, 120–121, 127 unbundling, 140, 185, 198 resource-advantage view of the firm, 45 resourceness, xxii, 28, 121, 122, 125, 127, 130, 133, 134, 152, 153, 154 Romer, Paul, xv, xix Rust, Roland, 141 Say, Jean, 7, 35, 36, 37 service-dominant (S-D) logic axiom 2, 15–16 service economy, 20, 45, 48, 67 service ecosystems, 158–174, 181–186, 189–195, 205, 208 definition of, 24, 183, 219 self-adjusting, 164 self-contained, 161 service providers and beneficiaries, 20–21, 88, 104, 119, 144–146, 160, 183 see actor-to-actor (A2A) service science, xvi, xviii, xix, xx, xxii, 48 service science management and engineering, xx, 48 service systems, xix, xx, 29, 113, 171, 172, 182, 219 service vs services, 11, 12, 19, 31, 32, 74, 206 service-centered view, 39, 53, 58, 70, 71, 72, 74, 121 see also service-dominant (S-D) logic service-dominant (S-D) logic axioms, 14 axiom 1, 15, 57–58, 66, 92, 96, 170 axiom 2, 15, 16, 68, 71, 103, 143 axiom 3, 16, 54, 74–78 axiom 4, 16, 54, 78 collaboration of academics and practitioners, xv, xvi, xxi, xxii foundational premise, 53–54 FP1, 57–58 see also service-dominant (S-D) logic, axiom FP2, 58–62, 63, 205 FP3, 62–64, 74 FP4, 65–66 FP5, 66–68 FP6, 68–71 see also service-dominant (S-D) logic, axiom FP7, 71–72 FP8, 71, 72–74 FP9, 71, 74–78 see also service-dominant (S-D) logic, axiom FP10, 78 see also service-dominant (S-D) logic, axiom lexicon, xvi, xviii, xxii, 27, 53, 54, 55, 57, 80, 109, 204 mindset, xxiii, 27, 78, 213 vocabulary, xvi service-for-service exchange, xv, xix, xxiv, 10, 12, 14, 15, 58–60, 89, 90 see also service-dominant (S-D) logic, axiom 1; FP1 services economy, 17, 18, 19, 20, 67, 68, 214 Shostack, Lynn, 45 Simon, Herbert, 111 Smith, Adam, xv, 7, 8, 33, 34, 37, 84, 90, 96, 129, 207, 214 social actors see actor(s), economic and social social currency, 57, 132 social structures see service ecosystems solutions, 6, 60, 105, 116, 138, 163, 192, 207 cocreated, 22, 202 innovative, 192, 195, 198, 203, 204, 209 see also market(s), as institutionalized solutions specialization, 4–5, 14, 68, 104, 140, 143, 151, 153 macro, 66 micro, 62, 67 see also division of labor Spohrer, Jim, xx strategic advantage, xxiv, 25, 47, 48, 65, 215 strategic thinking, xxii, 182, 198 structuration theory, 23, 24, 25, 26, 168, 170 see also practice theory supply chain management, 160, 206 sustainability, 65, 66, 94, 129, 184, 215 system(s) belief, closed, 22 complex, xix, 4, 58, 103, 108, 161, 172, 203, 220 dynamic, xix, 103, 154, 161, 170, 180, 207 exchange, 4, hybrid exchange, 111 language, 166 nested, xix open, 22 overlapping, 164, 210 perspective, 27, 183 rule, xx social, 23, 24, 25, 58 technology, xx uncertainty, 22 viability, 56, 58, 71, 92, 114–115, 120, 153–154, 207 see also ecosystems; service ecosystems tangibility see resource(s), tangible and intangible technology, xxi, 77, 78, 137, 192, 218 Teece, David, 46 transaction costs, xix, 127 transvection, 159 triads see networks, dyads and triads uncertainty, 26, 77, 78, 186, 189 value definition of, 57, 207 perception, 23, 165, 190 phenomenological determination of, 16, 21, 23, 35, 54, 57, 115, 117, 144, 183, 186, 187, 188, 192 phenomenological, 16 proposition, 71–72, 95–96, 97, 156, 167–169, 186–188 see also systems, viability value-in-context, xxii, 23, 87, 133, 144, 160, 188, 189, 209 value-in-exchange, 8, 23, 36, 91, 92 value-in-use, 8, 23, 35–38, 91, 144, 188–189 von Wieser, Friedich, 115 Walras, Leon, 36, 38 weak ties see networks wealth of nations, xxiii, 33, 34, 84, 214 Webster, Fred, 46 Well-being, 34, 40, 57, 69, 102, 205, 207, 210 Williamson, Oliver, xv, 59 Zimmermann, Erich, xv Zuboff, Shoshana, 46 ... University of Rome “La Sapienza” “In Service- Dominant Logic: Premises, Perspectives, Possibilities, Bob Lusch and Steve Vargo bring us to an elevated understanding of service as the foundation of value... Management at the University of California, Merced and Editor-in-Chief, Service Science Service- Dominant Logic: Premises, Perspectives, Possibilities draws together nearly two decades of pioneering work... of service( s) thought Divergence from the goods -dominant paradigm Convergence toward service- dominant logic Moving forward Axioms and foundational premises Introduction The lexicon of service- dominant