Service Dominant Logic of Marketing

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Service Dominant Logic Introduction: Service dominant logic view of marketing has changed from the traditional, foundational, goods dominant logic of exchange, in which goods were the focus of exchange and services that marketing inherited from economics a little more than 100 years ago to service as the basis of economic and social exchange. Service dominant logic has bought a paradigm shift in marketing from goods centred “value is embedded in output” dominant logic where focus was on the efficiencies in the production of tangible output. which was fundamental to the industrial revolution to service centred view that is informed by resource-advantage theory, competence, knowledge and relationship marketing where “value is defined by…show more content…
For vargo and lush (2004) marketing should be positioned at the core of the firms strategic planning. Identifying four different normative theories of strategies that are distinctively marketing: Brand equity Market orientation Market segmentation Relationship marketing Hence marketing is very essential in a firm’s success in this new logic.The above difference between the service dominant logic and goods dominant logic shows the emerging reform in the field of marketing. Service dominant logic shifts the focus of firm from old traditional way of thinking to new service dominant way of thinking where the comparison is shown below The Old Thinking S-D Thinking Profit Maximization Performance Improvement Uncontrollable External Environments External Environments Are Resources Market To Customers Market With Customers Value-in-Exchange Value-in-Use Exchange is Fundamental Co-creation is Fundamental S_D logic collaboration with the firm and the customers allows for a strategic orientation that informs the more tactical “four P’s. Product are viewed in terms of service flows, in which the service is provided directly or indirectly through an object Promotion is reoriented toward conversation and dialog with the customer Price is replaced with a value proposition created by both sides of the exchange Place is supplanted with value networks and processes” (Lush and vargo 2006). Information

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