Smith, Laura A. and Ng, Irene C. L. (2012) Service systems for value co-creation. Working Paper. Warwick Manufacturing Group, Coventry.

Preview

PDF WRAP_Ng_1073733-wmg-190112-service_systems_for_value_co-creation-wp1.pdf - Published Version - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader Download (355Kb)

Abstract

Over the last few decades there has been growing interest from both marketing researchers and practitioners in the creation of value (Eggert & Ulaga, 2002). In a series of publications on the Service-Dominant Logic (S-D Logic), Vargo and Lusch (2004: 2008) review the economic foundations that underpin how value creation is understood. In doing so, they put forward a number of propositions, which have had a significant impact on current management theory and practice. The central tenant of value creation under an S-D Logic is that value is always uniquely and phenomenologically determined by the customer. Therefore first, the enterprise cannot deliver value but only offer value propositions, and second, the customer is always a co-creator of value and therefore a customer’s value-creating processes and resources affect the success of a company’s value proposition. Given this orientation, and since the context of value creation is not within the firm’s control, managing the customer as a co-creator of value-in-use would present itself as a major challenge in designing and managing service systems. This chapter investigates the challenges of a service system for co-creation through a review and comparative analysis of three widely published cases considered to be service systems for co-created outcomes. As a result, six challenges of a service system for co-creation are summarised; the determination challenge; the measurement challenge; the revenue challenge; the context challenge; the resource challenge; and the skills challenge.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HF Commerce
Divisions:	Faculty of Science > WMG (Formerly the Warwick Manufacturing Group)
Library of Congress Subject Headings (LCSH):	Value, Customer services
Series Name:	Service Systems Research Group Working Paper Series
Publisher:	Warwick Manufacturing Group
Place of Publication:	Coventry
ISSN:	2049-4297
Date:	2012
Volume:	Vol.2012
Number:	No.1
Number of Pages:	19
Status:	Not Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access
References:	Arnould, E. J., Price, L. L. and Malshe, A. (2006), ‘Toward a cultural resource-based theory of the customer’, in Lusch, R. F. and Vargo, S. L. (Eds.), ‘The service-dominant logic of marketing: Dialog, debate and directions’, Armonk, NY: ME Sharpe, pp. 320−333. Chandler, J. and Vargo, S. L. (2011), ‘Contextualization and value-in-context: how context frames exchange’, Marketing Theory, Vol. 11, No. 1, pp. 35-49. Dabholkar, P (1990), "How to Improve Perceived Service Quality by Improving Customer Participation," in Developments in Marketing Science, B.J. Duniap, ed. Cullowhee, NC: Academy of Marketing Science, pp. 483-87. Drucker, Peter. F. (1974), Management: Tasks, Responsibilities, Practices. New York, Harper & Row, Publishers Inc. Echeverri, P. and Skålén, P. (2011) Co-creation and co-destruction: A practice-theory based study of interactive value formation, Marketing theory, Vol. 11 No.3 pp. 351-373. Eggert, A., & Ulaga, W. (2002), ‘Customer-perceived value: A substitute for satisfaction in company markets?’ Journal of Company and Industrial Marketing, 17(2/3), pp. 107– 118. Eisenhardt, K. M. and Graebner, M. E. (2007), "Theory building from cases: opportunities and challenges", Academy of Management Journal, Vol. 50, No. 1, pp. 25-32. Fitzsimmons, James A. (1985), "Consumer Participation and Productivity in Service Operations," Interfaces, 15 (3), pp. 60-67. Gronroos, C & Ravald, A. (2009) Marketing and the Logic of Service: Value Facilitation, Value Creation and Co-creation, and their Marketing Implications, working paper Hanken School of Economics, ISBN 978-952-232-061-2. Grönroos, C. (2008): Service Logic Revisited: Who Creates Value? And Who Co-Creates? European Management Review, Vol. 20, No.4, pp. 298-314. Gronroos, C. (2011), Value co-creation in service logic: A critical analysis, Marketing Theory, Vol. 11, No. 3, pp. 279–301. Heskett, James L., W. Earl Sasser Jr, and Leonard A. Schlesinger (1997), The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty. Satisfaction, and Value. New York: The Free Press. Holbrook, M. B. (1994). ‘The Nature of Customer Value’, In: R. T. Rust and R. L. Oliver (eds), Service Quality: New Directions in Theory and Practice. Sage, Newbury Park, CA. Holbrook, M.B. (2006) ‘ROSEPEKICECIVECI versus CCV: The resource-operant, skills-exchanging, performance-experiencing, knowledge-informed, competence-enacting, co-producer-involved, value-emerging, customer-interactive view of marketing versus the concept of customer value: ‘I can get it for you wholesale’. In R. F. Lusch & S. L. Vargo (Eds.), The service dominant logic of marketing: Dialog, debate and directions (pp. 208–223). Armonk, NY: M.E. Sharpe. IfM and IBM, 2008. Succeeding through service innovation: A service perspective for education, research, business and government. Cambridge, United Kingdom: University of Cambridge Institute for Manufacturing. Kotler, P. (1972). ‘A Generic Concept of Marketing’, Journal of Marketing, Vol. 36(April), pp. 46–54. Lapierre, J. (1997). What does value mean in business-to-business professional services?. International Journal of Service Industry Management, Vol. 8 No. 5, pp. 377-397. Levitt, T. (1969). The Marketing Mode: Pathways to Corporate Growth. McGraw-Hill, New York. Meuter, Matthew L. and Mary Jo Bitner (1998), "Self-Service Technologies: Extending Service Frameworks and Identifying Issues for Research," in AMA Winter Educators' Conference, Dhruv Grewal and Connie Pechmann, eds. Chicago: American Marketing Association, pp. 12-19. Naumann, E. (1995), Creating Customer Value. The Path to Sustainable Competitive Advantage, Thompson Executive Press, Cincinnati, Ohio. Neely, A. (2008), “Exploring the financial consequences of the Servitization of manufacturing”, Operations Management Research. Vol.1 No. 2 (December), pp. 103-118. Ng, Irene C. L., Lei Guo, James Scott and Nick Yip (2008), “Towards a Benefit-based Framework for Understanding B2B Services and its impact on Contract and Capability”, Proceedings of the 10th International Research Seminar in Services Management, 27-30 May 2008, La Londe, France Ng, Irene C.L. and Sai Nudurupati, (2010) “Outcome-Based Service Contracts In the Defence Industry – Mitigating the Challenges,” Journal of Service Management, Vol. 21, No. 5, pp. 656-674. Ng, Irene C.L. and X. Ding. (2012), “Relational Specificity in the Value Co-production of Outcome-based Contracts in Equipment-based Service,” under review in Administrative Science Quarterly Ng, Irene C.L. Parry, G., Smith, L., Maull, R. M., Briscoe, G. and Marlowe, S. (2012), Transitioning from a Goods-Dominant to a Service-Dominant Logic: Visualising the Value Proposition of ABC, under review in the Journal of Service Management Ng, Irene C.L., Sai Nudurupati and Jason Williams, (2011) “Redefining Organizational Capability for Value Co-creation in Complex Engineering Service Systems in Complex Engineering Service Systems: Concepts & Research, Ng, Irene C.L., Glenn Parry, Peter Wild, Duncan MacFarlane and Paul Tasker (Eds.) ISBN: 978-0-85729-188-2, London: Springer Ng, Irene C.L., Sai Nudurupati and Paul Tasker, (2010) “Value Co-creation in Outcome-based Contracts for Equipment-based Service”, AIM working paper series, WP No 77 - May – 2010 http://www.aimresearch.org/index.php?page=wp-no-77 under second review in Journal of Service Research Normann, R. (2001), Reframing Company: When the Map Changes the Landscape, John Wiley &, Chichester. Normann, R. and R. Ramírez (1994). Designing Interactive Strategy: From Value Chain to Value Constellation. John Wiley & Sons, Chichester. Oliva, R., and Kallenberg, R., 2003. Managing the transition from products to services. International Journal of Service Industry Management. Vol. 14 No. 2, pp. 160-172. Ordanini, A. and Pasini, P. (2008), Service co-production and value co-creation: The case for a serviceoriented architecture (SOA), European Management Journal, Vol. 26, pp. 289– 297. Parasuraman, A. (1997), ““Reflections on gaining competitive advantage through customer value”, Journal of the Academy of Marketing Science, Vol. 25 No. 2, pp. 154-61. Payne, A. and Holt, S. (2001) ‘Diagnosing customer value: Integrating the value process and relationship marketing.’ British Journal of Management, Vol. 12, pp. 159−182. Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, Vol, 69 (Oct), pp. 167–176. Payne, A., K. Storbacka and P. Frow (2008) Managing the co-creation of value. Academy of Marketing Science. Vol. 36, No. 1, pp. 83–96. Plé, L. and Cáceres, R. C. (2010) "Not always co-creation: introducing interactional co-destruction of value in service-dominant logic", Journal of Services Marketing, Vol. 24, No. 6, pp. 430 - 437. Prahalad, C.K. and Ramaswamy, V. (2000), Co-opting Customer Competence, Harvard Business Review, Vol. 78 Issue 1, pp. 79-87. Prahalad, C.K. and Ramaswamy, V. (2004) Co-creation Experiences: The Next Practice in Value Creation. Journal of Interactive Marketing, Vol. 18 No. 3 pp. 5-14. Sawney, M. (2006), ‘Going Beyond The Product: Defining, Designing and Delivering Customer Solutions’ In R. F. Lusch & S. L. Vargo (Eds.), The service dominant logic of marketing: Dialog, debate and directions, pp. 365-380. Schneider, Benjamin and David E. Bowen (1995), Winning the Service Game. Boston: Harvard Business School Press. Slater, S. F. and J. C. Narver (1995). ‘Market Orientation and the Learning Organization’, Journal of Marketing, Vol. 59 No. 3, pp. 63–74. Smith, Adam. [1776] 1904. An inquiry into the nature and causes of the wealth of nations. London: W.Strahan and T. Cadell. Smith, L., Maull, R. M. and Irene C.L. Ng, (2012) “Servitization and Operations Management: A Service Dominant Logic Approach”, conditionally accepted for International Journal of Operations and Production Management, working paper at http://businessschool. exeter.ac.uk/research/areas/topics/management/outputs/publication/?id=682 Smith, L., Ng, Irene C.L. and Maull, R. M. (2012) “The Three Value Cycles of Equipment Based Service,” Production, Planning and Control, forthcoming Spohrer, J., Maglio, P. P., Bailey, J. and Gruhl, D. (2007), Steps toward a science of service systems, Computer, Vol. 40, pp. 71–77. Spohrer, J., Vargo, S. L., Caswell, N. and Maglio, P. P. (2008) The service system is the basic abstraction of service science. In Proceedings of the 41st Annual Hawaii International Conference on System Science, January, p. 104. Storbacka, K., and Lehtinen, J. R. (2001). Customer relationship management: Creating competitive advantage through win–win relationship strategies. Singapore: McGraw-Hill. Vargo, S. and R. Lusch (2004) ‘Evolving to a new dominant logic in Marketing’ Journal of Marketing, 68, pp. 1-17. Vargo, S. L. (2009) ‘Doing Research in Service: A research meeting on the Service-Dominant Logic’ Advanced Institute for Management (AIM) Research workshop, March 19th 2009, London.http://www.aimresearch.org Vargo, S. L. and Lusch, R. F. (2011), It's all B2B…and beyond: Toward a systems perspective of the market, Industrial Marketing Management, Vol. 40, pp. 181–187. Vargo, S. L. and R. F. Lusch. (2008). Service-dominant logic: Continuing the evolution. Journal of the Academy of Marketing Science. Vol. 36 No. 1, pp. 1-10. Vargo, S. L., Maglio, P. P. and Akaka, M. A. (2008), On value and value co-creation: A service systems and service logic perspective, European Management Journal, Vol. 26, pp. 145– 152 Vargo, Stephen L. and Fred W. Morgan (2005) "Services in Society and Academic Thought: A Historical Analysis." Journal of Macromarketing, Vol. 25 No. 1, pp. 42-53. Wilkstrom, S. (1996), Value Creation by Company-Consumer Interaction, Journal of Marketing Management, Vol. 12, pp. 359-374. Woodruff R. B. (1997). ‘Customer Value: The Next Source of Competitive Advantage’, Journal of the Academy of Marketing Science, Vol. 25 No. 2, pp. 139–153. Yip K.T. (2012), “What are the attributes of value co-creation and how may they impact on the customers’ willingness to pay? Observations from three service industries.” PhD Thesis, University of Exeter. Zuboff, S. and Maxmin, J. (2002) The Support Economy. New York: Penguin.
URI:	http://wrap.warwick.ac.uk/id/eprint/41098

Request changes to a record

Actions (login required)

View Item