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Hanken School of Economics Working Papers, Hanken School of Economics

No 546:
Rethinking Service Companies’ Business Logic: Do We Need a Customer-Dominant Logic as a Guideline?

Kristina Heinonen (), Tore Strandvik (), Karl-Jacob Mickelsson (), Bo Edvardsson (), Erik Sundström () and Per Andersson ()

Abstract: Purpose –This paper explores and expands the roles of customers and companies in creating value by introducing a new a customer-based approach to service. The customer’s logic is examined as being the foundation of a customer-based marketing and business logic. Design/methodology/approach – The authors argue that both goods-dominant logics and service-dominant logics are provider-dominant. Contrasting the customer-dominant logic with provider-dominant logics, the paper examines the creation of service value from the perspectives of value-in-use, the customer’s own context, and the customer’s experience of service. Findings –Moving from a provider-dominant logic to a customer-dominant logic uncovered five major challenges to service marketers: Company involvement, company control in co-creation, visibility of value creation, locus of customer experience, and character of customer experience. Research limitations/implications – The paper is exploratory. It presents and discusses a conceptual model and suggests implications for research and practice. Practical implications –Awareness of the mechanisms of customer logic will provide businesses with new perspectives on the role of the company in their customer’s lives. We propose that understanding the customer’s logic should represent the starting-point for the marketer’s business logic. Originality/value – The paper increases the understanding of how the customer’s logic underpins the customer-dominant business logic. By exploring consequences of applying a customer-dominant logic, we suggest further directions for theoretical and empirical research.

Keywords: service; customer-dominant logic; co-creation; value-in-use; customer experience; (follow links to similar papers)

18 pages, December 29, 2009

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