Portal de Periódicos da CAPES

Why We Need a Service Logic: A Comparative Review

2010; Volume: 15; Issue: 3 Linguagem: Inglês

2326-3709

Scott E. Sampson, Larry J. Menor, Sterling A. Bone,

Service and Product Innovation

IntroductionWhat is a service? Are businesses different from non-service businesses? In particular, is the management of businesses fundamentally different from the management of non-service businesses? These important questions are the motivation of this article, and are answered by a service logic. As indicated by Kingman-Brundage et al. (1995, p. 21):A logic describes how and why a unified system works. It is a set of organizing principles which govern the experiences of customers and employees. Only after the logic of a system has been made explicit does the system become amenable to management control, mainly through the activities of system design.In this article, we discuss the managerial importance of adopting and deploying a logic and critically review two legitimate logic candidates. The first is the increasingly popular Service-Dominant Logic of marketing (SDL) proposed by Vargo and Lusch (2004a). SDL provides many useful insights, but also has some practical limitations. These limitations continue in subsequent SDL iterations (e.g. Lusch and Vargo 2006; Vargo and Lusch 2008). We then review an alternate logic known as the Unified Service Theory (UST) and show how the UST addresses shortcomings of SDL. We demonstrate strategic application of the UST by presenting a model of Process DNA. A final section summarizes.The Service Difference - An IllustrationAn entrepreneur in a nearby community opened an Italian restaurant that was relatively successful. The manager designed his restaurant venture to offer patrons an authentic Italian dining experience. The value proposition was based not only on quality food products but also on pleasant interactions between customers and employees (Smith and Colgate 2007). Subsequently, he developed a prepackaged Italian soup that was marketed through a national retail chain. That soup offering also proved to be relatively successful. The manager designed the soup offering and even did his own production, but outsourced the product's sales and distribution. Recently, the manager decided to close the restaurant and focus his attention on the soup offering (Leong 2009). Why? What are possible reasons underlying such a decision? And, as we will get to later, how do SDL and UST logics inform such a decision?The restaurant venture was structured so that soup and food production were contingent upon customer specifications. Even though portions of food items were prepared in advance, the final production and assembly of food items were contingent on customer orders. Allowing customers to specify food preparation preferences increased provision complexity but allowed for increased value realization for and from patrons through customization. Further, the restaurant offering included a facility, or servicescape (Bitner 1992), with authentic Italian decor, which was an important part of the offering. Customers did not just buy Italian food; they also bought an Italian experience. Customers were at times passive participants in the process (e.g., being served food) and at other time active participants (e.g., ordering and eating) during the restaurant consumption journey.The second venture, in contrast, involved standardized offerings of soups. The manager believed he had superior recipes, which, when branded, were his primary source of competitive advantage. He produced his own soup in a facility near where he lived, which worked fine during the startup phase. However, as the popularity of his soup products increased, he might likely have outsourced the soup production or moved it to a location with lower labor costs and easier access to key ingrethents such as tomatoes. He had already outsourced the sales and distribution, and it would be costly for him to attempt to develop his own proprietary distribution channel.The manager decided to close the restaurant and focus on the soup manufacturing venture largely due to the particular challenges of the restaurant venture manifested during a slow economy (Leong 2009). …