MKTG2023 Chap.2 Productisation and Service-Dominant Logic
Productisation and Service-Dominant Logic
Making a service behave like a product
Productisation packages a service with a clear scope, a standard process and a defined price and set of deliverables. Fixed-fee legal packages and tiered software plans are typical. The benefits answer the IHIP problems directly: clearer value propositions answer intangibility, and repeatable delivery answers heterogeneity.
The continuum runs from bespoke project work to standardised self-service, and every move along it gives something up.
A different starting point for marketing
Vargo and Lusch argue that the split between goods and services is the wrong place to begin.
In service-dominant logic all exchange is service, goods are distribution mechanisms for service, and value appears only when a beneficiary uses and integrates resources in their own context.
The chapter sets out the foundational premises, including the 2016 axiom that value cocreation is coordinated through institutions, the rules of the game rather than the organisations that play it.
From dyads to ecosystems
Service ecosystems replace the firm and customer pair with networks of actors who all integrate resources, which changes how a value proposition should be written and tested.
What this chapter covers
- 01
Productisation and its five benefits
- 02
The productisation continuum and servitisation
- 03
Goods-dominant versus service-dominant logic
- 04
Foundational premises FP1 to FP10
- 05
FP11: institutions and institutional arrangements
- 06
Service ecosystems and the actor-to-actor view
Worked example · free
Place three offers on the productisation continuum
- 1Wedding planning is fully customised project work, at the low-productisation end.
- 1Moving it right into modular packages would gain clear pricing but lose the room to shape every detail around one couple.
- 1The three-package studio is a modular, semi-standardised offer in the middle of the continuum.
- 1Moving it right to full standardisation would gain scale but lose the photographer’s judgement on the day.
- 1The photo-booth app is fully standardised self-service, at the high-productisation end.
- 1It cannot move further right; its risk is that customers who want guidance find no person to ask.
Key terms
- Goods-Dominant Logic
- View that value is manufactured into a good by the firm and exists once production is complete, before any use.
- Value Proposition
- In service-dominant logic, an offer of potential value that the firm can make but cannot deliver alone, since value arises in use.
- Institutions
- Humanly devised rules, norms and beliefs, such as contract law or social conventions, that make exchange predictable; distinct from organisations.
- Service Ecosystem
- Largely self-contained network of actors who integrate resources, adjust to one another and are held together by shared institutions and the service they exchange.
Productisation and Service-Dominant Logic FAQ
Is productisation the same thing as servitisation?
No. Productisation moves a service toward a standardised, packaged offer, such as a fixed-fee audit. Servitisation goes the other way: a goods firm wraps its product in ongoing service, such as engine maintenance sold by the hour. The lecture treats them as two sides of the same convergence between goods and services.
What is the difference between an institution and an organisation?
An institution is a rule, norm or belief that shapes behaviour, such as contract law, property rights or a social convention. An organisation is an actor, such as a bank or a university. Following North, institutions are the rules of the game and organisations are the players, and service-dominant logic relies on that distinction.
Why does service-dominant logic say firms cannot deliver value?
Because value is determined by the beneficiary in use. A firm can design and offer a value proposition and take part in creating value, but whether value appears depends on the customer’s own context, skills and effort. That is premise FP7, and the seminar audits AI-written offers for wording that assumes value is simply handed over.
What are operant resources and why do they matter?
Operant resources are knowledge and skills, the resources that act on other resources rather than being acted on. Premise FP4 makes them the fundamental source of strategic benefit, which is why the Week 1 seminar asks what operant resource the customer must contribute before an offer can create any value at all.
Assessment move
Make a two-column card for goods-dominant and service-dominant logic with the unit of exchange, the customer’s role, where value comes from and the marketing task on each side. Then write FP7, FP10 and FP11 in your own words and test them on one subscription you pay for: what must you contribute before it is worth anything?
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