Working Papers,
Hanken School of Economics

Abstract: There is an urgent interest in marketing to move away from neo-classical value definitions suggesting that value creation is a process of exchanging goods for money.

In the present paper, value creation is conceptualized as an integration of two distinct, yet closely coupled processes. First, actors co-create what this paper calls an underlying basis of value. This is done by interactively re-configuring resources. By relating and combining resources, activity sets, and risks across actor boundaries in novel ways actors create joint productivity gains – a concept very similar to density (Normann, 2001).

Second, actors engage in a process of signification and evaluation. Signification implies coconstructing the meaning and worth of joint productivity gains co-created through interactive resource re-configuration, as well as sharing those gains through a pricing mechanism as value to involved actors.

The conceptual framework highlights an all-important dynamics associated with ´value creation´ and ´value´ - a dynamics the paper claims has eluded past marketing research.

The paper argues that the framework presented here is appropriate for the interactive service perspective, where value and value creation are not objectively given, but depend on the power of involved actors´ socially constructed frames to mobilize resources across actor boundaries in ways that ´enhance system well-being´ (Vargo et al., 2008).

The paper contributes to research on Service Logic, Service-Dominant Logic, and Service Science.

Keywords: value creation; value co-creation; value; service; service logic; service-dominant logic; service science

19 pages, December 1, 2010

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