The practice of marketing is rapidly changing in ways that we have not seen before in the history of business. One business professional who has a unique perspective on how marketing is evolving as a discipline at this time is Mr. Kevin Bishop, Vice President and General Manager, IBM's Experience One group (please see the video below). IBM software is currently used in the marketing of over 8,000 brands!
So, Mr. Bishop identifies three fundamental shifts in marketing that can be summarized as (1) knowing what to market, (2) knowing who to market to, and (3) doing that in a co-created way in an environment where you know each customer as an individual in context using your entire organization, not just your marketing department! These observations of marketing practice lay the foundation for this case study. For example, we will discuss Service Dominant Logic as an emerging perspective of marketing that focuses on value co-creation between marketers and their stakeholders instead of products and channels. We will further focus on customer engagement as the primary means to achieve long-term healthy marketing relationships. We will also consider emerging data sources as ways of understanding how well we are performing as marketers in this case.
Again, these profound changes have had an impact on not just marketing practices, but also the development of marketing theory. In particular, a very exciting theoretical advancement in marketing thought termed Service Dominant Logic (SDL) was recently proposed by Vargo and Lusch (2004). The SDL perspective suggests profound changes from the traditional goods-based perspective derived from economic theory. Please click here for an annotated literature review of the most recent marketing thought related to SDL from the academic literature . Also, Tsiotsou and Wirtz (2015) present a three-stage model of service consumption that summarizes how SDL influences our understanding of the process of consumption (please click here for a copy of the article describing their model) . Please carefully evaluate this literature as this information will constitute the theoretical evidence that will have to be reconciled with the arguments you create over the course of this case analysis. Students are strongly encouraged to embrace the SDL perspective to complement their traditional understanding of marketing in their case analyses and recommendations, and to specifically discuss these linkages in the development of the case-related arguments.
SDL is a complicated topic involving dominant logics. The easiest way to gain a better understanding of this difficult concept is to purchase the recent book by Lusch and Vargo (2014) titled "Service-Dominant Logic: Premises, Perspectives, and Possibilities" by clicking here. The first three chapters of this book lay out the historical foundation of this new emerging underlying logic for marketing. The following video presents a short introduction to SDL from one of the authors of the perspective.
Robert F. Lusch presents a brief overview of the past, present, and future of Service Dominant Logic in the video below.
One of the key concepts of the SDL perspective involves the differences between value creation and value co-creation. Prof. Ramaswamy presents a brief interpretation of the concept of co-creation generally (within the context of innovation) that forms the foundation of value-in-use as applied to marketing decision-making. Please note that students must clearly understand concepts such as "value co-creation" and "value-in-use" in order to fully understand the SDL perspective.
Another key concept involved in discussions of the SDL perspective involves the concept of value-in-use. That is, marketing is evolving toward understanding and communicating value propositions in terms of the value derived in use, as opposed to the traditional view of value derived from exchange. Please note that the annotated review link highlighted above will help clarify these issues for students.The following video shows Professor Christian Grönroos explaining the concept of value-in-use from a service marketing perspective.
Finally, Professor Christian Grönroos, a European service marketing thought leader, provides a much more detailed explanation of the concept of "value" from a service marketing perspective. This extremely instructive lecture is an hour long. Please let your instructor know if you have any questions related to the SDL perspective prior to addressing the tasks below.
Please remember that formal arguments do not reflect your opinion, rather, a marketing-based evaluation based upon logic and existing evidence from marketing practice and academic sources (including marketing theory). No bibliography = no evidence!