It helps understand and satisfy customer’s needs of a given market, through value creation. The SDL becomes the mindset for understanding the nature and purpose of a market, society, and organization. The foundation of the logic above in each market, society, and organizations, is fundamentally concerned with service exchange. More so, the application of knowledge and skills is typically for the benefit of parties involved, which renders service of a product’s offering; far more essential than the product or service component. SDL also explains and becomes the strategic element that can be seen as two parties exchange service for mutual benefits. The underlining factor is service and service become essential since it provides more information on how we exchange knowledge across parties. In marketing application, when this logic is used in selling; the sales person works with the customer towards a common solution (Vargo and Luscg, 2004).
Price does not become the principal object of purchase, seen in comparing Apple and Samsung products; as the value becomes more important for decision-making. Although Samsung products are cheaper, consumers still buy Apple products; because of the value that can be associated with e.g. the design, the material or the product perception. In context, the marketer or sales executive are asked not to force the customer into purchasing a service, which does not create or increase value for the consumer. In an event where the sales person tries to force a customer into purchasing a service or a product that does not render value; an issue in the marketplace arises. Furthermore, since a marketer cannot eliminate competition, the marketer must recognize that competition informed by collaboration creates an advantage in a context. During sales, the marketer is to co-create with the customer to expand the value during engagement (Vargo and Luscg, 2008).
In practice, let’s say I entered the store of a TV service provider to purchase a service. And I mentioned to the salesperson, I will love to buy a television subscription service with a decoder that has the capability to record programs while I’m away. This is because most, of the TV programs I usually watch, air when I’m at work. After sharing my needs with the sales person, he started selling the idea of buying a TV package that included more channels, and that could repeat programs on multiple channels after the initial air date. And I do not have to pay extra nor pay for a recordable decoder since there is the likely hood that programs will be repeated. And I do not have to pay more for the decoder, given this decoder is on promotion and is offered to customers free of charge. The sales person’s sole area of concentration, was to generate leads, to meet his target for the new products launch and forgot about my initial requirement. From those mentioned above, the sales person forgot what is value to me; my value was the ability to record while am away, which means I can watch the program at anytime I’m available. However, the service he was selling me will still be time-based, and I may not have the luxury of benefiting from it. More so, since I entered the store with a goal, the marketer would have recognized this and had tried to cocreate. By building on my value, which was to stick to my initial requirement of wanting a decoder that could record and would have introduced more service to my request. In relation to Vargo and Luscg (2004), the sales person would have used the FP8; which is a service centered focus to create value.
Vargo, S, & Lusch, R 2008, ‘Servicedominant logic: Continuing the evolution’, Journal Of The Academy Of Marketing Science, 36, 1, p. 110, Scopus®, EBSCOhost, viewed 20 March 2015.
Vargo, S, & Lusch, R 2004, ‘Evolving to a New Dominant Logic for Marketing’, Journal Of Marketing, 68, 1, pp. 117, Business Source Complete, EBSCOhost, viewed 21 March 2015.