S-D Logic What S-D Logic Might Be Presentation for the Otago Forum on Service- Dominant Logic November 23, 2005 Robert F. Lusch, University of Arizona Stephen L. Vargo, University of Hawaii at Manoa

S-D Logic What S-D Logic Might be Foundation of a paradigm shift in marketing Basis for a General Theory of Marketing Reorientation for economic theory Foundation for theory of the firm Perspective for understanding role of markets in societyTheory of Markets

S-D Logic Co-creation at Core of S-D Logic All institutions co-created Market Values Norms Language From Operand to Operant Resources Market Exchange Shapes Institutions Exchange Creates Change

S-D Logic Marketing Assists Change & Evolution Division of Labor Exchange Change Increasing Degree of Change in Society

S-D Logic Commercial Society Institutions Service for Service Goods, Money, Organizations are Intermediaries

S-D Logic Intermediaries Goods = Tools & Appliances Money = Option on Service(s) & Relationships Organizations = Service Aggregators, Integrators & Transformers

S-D Logic Commercial Relationships RelationshipCommercialization SelfBooks, Seminars, Counseling, Apparel, Beauty, Spirituality FamilyEating, Entertainment, Childcare, Eldercare FriendsRomance, Clubs, Apparel, Church WorkJobs, Education & Training, Childcare, Healthcare, Retirement NeighborsGated Communities, Clubs, Architecture, Shopping StrangersSecurity Systems, Charitable Giving, Insurance, Credit, Investing

S-D Logic Reversing Fundamental Assumptions The Old ThinkingS-D Thinking Profit MaximizationPerformance Improvement Uncontrollable External Environments External Environments Are Resources Market To CustomersMarket With Customers Value-in-ExchangeValue-in-Use Exchange is FundamentalCo-creation is Fundamental

S-D Logic Collaborate With Customers & Partners Collaborate: Customers & Partners Overcome Resistances Co-Create Service Offering Co-Create Value Proposition Co-Create Conversation & Dialogue Co-Create Value Processes & Network Draw Upon Resources (internal & external) S-D Logic as a Theory of Marketing

S-D Logic The Nature & Scope of Marketing Commercial Society World of Work World of Consumption ConditionSpecialized Competences Specialized Competences MeansExchangeLabor Market Consumer & Business Market EndChangeValue

S-D Logic Toward an S-D Curriculum S-D View of Markets & Marketing Competency Building and Competitive Advantage Collaborating on Cross-Functional Processes Co-Creating Value Propositions Co-Creating Conversation & Dialog Co-Creating Value Processes & Networks Co-Creating the Service Offering Consumers as Resource Integrators Marketing and Society

S-D Logic Frontiers in Research Co-Creation & Collaboration Dialog & Conversation Value Propositions & Networks Consumer Centric Thinking Business Processes & Service Flows Knowledge & Competitive Advantage Meaning of Consumption & Work Theory of Markets Marketing, Macromarketing & Public Policy

S-D Logic Concluding Observations Should we develop an open-source S-D L Theory of Markets, Marketing, and Society? By embracing: Cocreation Transparancy Dialog Resource Development Value-in-use How do we? Will we?

S-D Logic Thank You! For More Information on S-D Logic visit: sdlogic.org We encourage your comments and input. If you would like your working papers or teaching material and/or links to your research displayed on the website, please us Steve Vargo: Lusch:

S-D Logic How Foundational is S-D Logic? To a general theory of the firm? To a general theory of markets & marketing? To a general theory of society?

S-D Logic Individuals Work as Co-creation Consumption as Co-creation Applying Mental & Physical Competences Organizations S-D Logic and a Theory of Organizations Primary Functions = Aggregation, Integration, Transformation What is Purpose of Firm?

S-D Logic Management Tools Needed Because of Intermediaries Credit Management BrandingDecentralized Organization Planning & Control Systems Marketing Concept Profit Sharing Total Quality Management Supply Chain Management Customer Relationship Management

Goods Logic Goods Tangibles Operand Resources Asymmetric Propaganda Value Added Transactional Maximize Profits Service Dominant Services Intangibles Operant Resources Symmetric Conversation Value Propositions Relational Financial Feedback Global Sustainability Customer Alienation Respect for Marketing In Firm Less More Less More Less More The Emerging Reform of Marketing

S-D Logic Markets and the Family Institution: Transforming Relationships Tribal Society Age is paramount Gender determines role Children are producers Property rights limited Marriage is controlled Credit is limited Success is granted People do not try to advance Market Society Youth is valued Gender relatively unimportant Children are consumers Property rights widespread Marriage is open Credit is pervasive Success is earned People try to advance