From Goods to Service(s): Divergences and Convergences of Logics

Vargo, S. L., Lush, R. F. (2008)

Industrial Marketing Management; Vol 37; Issue 3; pp. 254-259
DOI: 10.1016/j.indmarman.2007.07.004
There are two logics or mindsets from which to consider and motivate a transition from goods to service(s). The first, “goods-dominant (G-D) logic”, views services in terms of a type of (e.g., intangible) good and implies that goods production and distribution practices should be modified to deal with the differences between tangible goods and services. The second logic, “service-dominant (S-D) logic”, considers service – a process of using ones resources for the benefit of and in conjunction with another party – as the fundamental purpose of economic exchange and implies the need for a revised, service-driven framework for all of marketing. This transition to a service-centered logic is consistent with and partially derived from a similar transition found in the business-marketing literature — for example, its shift to understanding exchange in terms value rather than products and networks rather than dyads. It also parallels transitions in other sub-disciplines, such as service marketing. These parallels and the implications for marketing theory and practice of a full transition to a service-logic are explored.

Table 1 Transition for practitioners
Goods logic Service logic
Making something
(goods or services)
=> Assisting customers in their
own value-creation processes
Value as produced >=Value as co-created
Customers as isolated entities =>Customers in context of their own networks
Firm resources primarily
as operand =>
Firm resources primarily as operant
Customers as targets =>Customers as resources
Primacy of efficiency => Efficiency through effectiveness

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