Market Offerings as Relievers and Enablers: Building on the Service Dominant Logic of Marketing

1. Market Offerings as Relievers and Enablers: Building on the Service Dominant Logic of Marketing Stefan Michel Thunderbird, The Garvin School of International Management, Glendale AZ MichelS@t-bird.edu Stephen W. Brown Arizona State University, Tempe, AZ

2. Market exchange and self production • Individuals and organizations satisfy needs and wants through • Market exchange • Internal exchange (within the same entity) • Self production and make-or-buy • Marketing as a discipline focuses on market exchange. However, self production impacts the magnitude and characteristics of market exchanges. Stefan Michel & Stephen W. Brown

3. Service-dominant (SD) logic of marketing (Vargo/Lusch, JM, 2004) Stefan Michel & Stephen W. Brown

4. Hierarchy of self production and market exchange options Stefan Michel & Stephen W. Brown

5. Self production • Self production: economic activities that can substitute fora market offering by generating a equivalent value in use through a different value constellation (Normann/Ramirez 1993) • not co-production (e.g., Dellande, JM, 2004) • not co-creation (e.g., Pine/Gilmore 1997) • not self-service (e.g., Meuter, JM, 2000) • Continuum, not dichotomous construct Stefan Michel & Stephen W. Brown

6. Market offerings as relievers or enabler • In respect to the „value in use“, market offerings can • relieving customers from doing something • enabling them to self-produce value. • Customers do not buy goods or services but instead buy offerings that render services that create value (Gummesson 1995). Stefan Michel & Stephen W. Brown

7. Substitutability of enabler, reliever and self production Stefan Michel & Stephen W. Brown

8. Market trends • Relieving the customers • Microwave cooking (B2C) • In-house mail service (B2B) • Enabling the customers • Do-it-yourself (B2C) • Desktop publishing (B2B) Stefan Michel & Stephen W. Brown

9. Strategic Framework Stefan Michel & Stephen W. Brown

10. Implications • Thinking about value-in-use avoids marketing myopia (Levitt 1960) • Weak signals (Ansoff 1976) and disruptive innovations (Christensen 1997) are easier to detect • Alternative ways to segment customers in respect to their self producing activities • Alternative ways to position the market offerings in respect to their relieving and enabling function • Impact on marketing measurements. For example, Customer lifetime value is based on „need category“, not on „product category“ Stefan Michel & Stephen W. Brown

11. Implications (cont.) • Self producing as an important factor in the experience economy (Pine/Gilmore 1999, Prahalad/Ramaswamy 2000) Stefan Michel & Stephen W. Brown

12. Management Agenda • Analyze each market offering‘s relieving and enabling function • Study the factors that drive self production • Analyze the four strategic perspective • Re-defing marketing strategy • market boundaries, competitive set • weak signals, innovation • segmenting, position • measuring market share and CLV Stefan Michel & Stephen W. Brown