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Marketing Strategy
in Service Business
- margrimaldi@unisa.it -
ASVSA Associazione per la ricerca sui Sistemi Vitali ASVSA Associazione per la ricerca sui Sistemi
Vitali

Programme
2
•Marketing and  Service Marketing: origins, evolutions & trends
•Service Theories: from S-D logic & Service Science to service ecosystems & service systems
•Many-to-Many Marketing
•Marketing plan
•
•Value co-creation
•Unconventional marketing
Case studies
Examples

Agenda: Lesson 2
3
Service theories:
•Service-Dominant Logic
•Service Science
New organizational frameworks:
vService ecosystems
v(Smart) service systems
Agenda, checklist, tasks, todo icon
Case studies and examples
from research projects

Service- Dominant logic
2.1
4

Theory that introduces the transition from a manufacturing logic to a new
service-based conceptualization of value creation process.
Multidisciplinary research stream (computer science, management, sociology…) which proposes a
practical approach to the study of service systems, with a focus on service design and evaluation.
Service- dominant logic (SDL)
Service Science, Management, Engineering and Design (SSMED)
Vargo & Lusch (2004)
Maglio & Spohrer (2008)
Risultati immagini per system
Service-based & Systems perspective: The key theories
5

The Story of S-D Logic
6


S-D logic: main insights and originality
S-D logic draws inspiration from the fundamentals of network theories and from the general
revolution of Service Marketing (Grönroos, 2000; Gummesson, 2004) and focuses on the analysis of:
7
ünew value «generation» processes
ü
ümodern (entrepreneurial) interactions
ü
ünew “networked” modalities for resources integration
The goal is to advance a broader perspective that can meet current market’s requirements and can
reflect the reality of contemporary service exchanges.

Service- dominant Logic (SDL)
•The founders: Stephen L. Vargo & Robert F. Lusch
•Aim: to overcome the old manifacturing logic and introduce a new perspective centred on service
which emphasizes the relational nature of delivery and the authonomy of service as the basis of
exchange.
•
•
•
New definitionà platform to exchange products
SERVICE
Redefinition of value exchange process in order to propose the concept of value co- creation and to
higlight the preeminence of customer’s role
VALUE
ORGANIZATIONAL MODEL
Proposition of a new (multi-stakeholder) organizational layout to foster value co- creation
8

Goods-services Continuum
9


S-D logic mindset
•Service-Dominant (S-D) Logic is a mindset for a unified understanding of the purpose and nature of
organizations, markets and society which are engaged in the exchange of service, intended as the
application of competencies (knowledge and skills) for the benefit of a party.
10

Formalization of the overcoming of product-orientation and proposition of a service-for-service
view in which customers are not intended anymore as «passive» receivers of service but as actors
who contribute actively to production and creation of joint value.
https://www.youtube.com/watch?v=Rp78Aefaz5I

It’s all about service!
Even the oldest method of exchange like barter can be conceptualized as direct service-for-service
exchange, in which each actor provides other actors with reciprocal service provision.
11
The producer-consumer distinction is trivial and should be overcome since each party clearly and
directly provides other parties with benefits.
Torna in piazza il baratto. Oggi a Lecce :: Galatina Immagini, foto stock e grafica vettoriale a
tema Barattare ...

Vargo and Lusch use the singular word «Service» to explain the goal to produce a benefit for a
recipient and not as a simple unit of services (G-D logic).
Even when a customer buys a physical product, he is buying the service directly connected to it.
Originality and innovative insights:
Purpose of Exchange
12
Many concepts (value co-production/co-creation, value propositions and experiences) are not totally
new.
Rather, S-D logic captures the shift in contemporary marketing thought, in which marketing is seen
as a facilitator of ongoing processes of voluntary exchange through collaborative, value-creating
relationships among actors (individuals and organizations for example).

Business, ecommerce, ecosystem, finance, pattern, relationship icon
13
2004
2008
2016
FP1- FP8
FP9- FP10
FP11
The evolution of S-D Logic
VALUE- IN- CONTEXT
Assess, context, data, document, file, information, system icon
SERVICE
ECOSYSTEMS
INSTITUTIONS
SERVICE
USERS-PROVIDERS
VALUE
CO-CREATION
IN-EXCHANGE
VS IN-USE
RESOURCE INTEGRATION

14
•The ten foundational premises (FPs, 2004-2008) lay the foundations of a framework for the
service-centered mindset.
•
Axioms, Foundational Premises and Concepts of S-D Logic
Over time, thanks to the diffusion of the theory in service research, different research streams
have been proposed that emphasize  different key dimensions of value co-creation processes:
cultural, social, knowledge-based, innovation opportunities. Thus, value-in-context and
institutions are proposed to consider the social nature of exchanges.
Vargo and Lusch realized that some of the original FPs could be derived from others and group the
11 statements into 5 more general propositions (AXIOMS)
The different shades of VALUE
Color catalogue, colors chart, colours palette, paint swatch ...
«To be consistent with the emerging narrative»

15
Axioms & Foundational Premises
Vargo Stephen, L., & Lusch Robert, F. (2004). Evolving to a new dominant logic for
marketing. Journal of marketing, 68(1), 1-17.
Vargo, S. L., & Lusch, R. F. (2008). Service-dominant logic: continuing the evolution. Journal of
the Academy of marketing Science, 36(1), 1-10.
Vargo, S. L., & Lusch, R. F. (2016). Institutions and axioms: an extension and update of
service-dominant logic. Journal of the Academy of marketing Science, 44(1), 5-23.
AXIOM 1
AXIOM 2
AXIOM 3
AXIOM 4
AXIOM 5

S-D logic: FPs
16


11 foundational premises (FP): Synthesis of Vargo and Lusch’s theses that explain step by step the
logic passages that lead to the elaboration of SDL framework and to the patchwork of the emerging
dominant logic.
SERVICE
VALUE
ORGANIZATIONAL MODEL
11 Foundational premises
FP
FP 1- FP5
FP 6- FP10
Foundational Premises
17
FP11

Vargo S. L., Lusch R.F. (2004), Evolving to a new dominant logic for marketing, Journal of
marketing, 68(1), pp. 1-17.
Vargo S. L., Lusch R. F. (2008), Service-dominant logic: continuing the evolution, Journal of the
Academy of marketing Science, 36(1), pp. 1-10.
FP1
FP3
FP2
Service is the basis of all exchange
Indirect exchange masks the fundamental unit of exchange
Goods Are Distribution Mechanisms for Service Provision
FP5
FP4
Knowledge Is the Fundamental Source of Competitive Advantage
All economies are service economies
“Service for service”
Goods as means for service
Operand and operant resources
Service dominates every kind of offering
Service as overarching
FP1- FP5: Products and service, between manufacturing model and service logic
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•The first assumption represents the real SDL manifesto and remarks the transition from a
traditional idea of exchange (Good- dominant logic) to a new service- centred perspective.
SERVICES
SERVICE
intangible units of output realized in a standardized way from producers and without the
intervention of customers
The fundamental unit of exchange
The application of specialized skill(s) and knowledge for the benefit of other parties
FP1: Service is the basis of all exchange
Goods and service are not anymore strictly separated: not only service are not «dominated» by
products but the two concepts converge.
19

•New conception of exchangeà not anymore centered on physical goods but on a set of skills and
immaterial elements whose value should be negotiated and co- produced
20
FP1: Service is the basis of all exchange
New role of customerà from passive receiver to active participant in the process of service
delivery engaged in business activities.
Overcoming of the dichotomy proposed by Normann (2001) which defines providers as value creators
and customers as value destroyers
Customer - Free technology icons
New aim of service deliveryà Beyond economic utility, towards the achievement of benefits for all
the participants and the generation of new intangible resources.
Exchange - Free people icons

•“Service for service”à overthrowing of the role of goods and service
•
•
21
FP2: Indirect exchange masks the fundamental unit of exchange
To products as a tool to service delivery
It is the service underlying goods which represents and enhances the value of products
(Vargo & Lusch, 2004)
From service as a particular kind of products
From  SERVICE (only intangible) ≠ PRODUCTS (only tangible)
Key, tool icon

•Aim of service exchange:
•to transform the tacit knowledge involved in service design and production into something
exchangeable;
•to provide the service related to goods
•
FP3: Goods are distribution mechanisms for service provision
Even if the offering is tangible, the benefits deriving from the exchange should necessarily be
conceived in terms of service.
Even though consumers concretely buy physical goods, they purchase the service related to it.
Goods are key levers and tools for the concretion, actualization and experiencing of service.
22

•In line with Resource-based view (RBV, Penrose, 1959; Hamel & Prahalad, 1989) knowledge has a key
role in the acquisition competitive advantage
•
•
•
Human knowledge and skills, cultural and social resources usually intangible and dynamic which act
on operand resources to create value and competitive advantage.
Natural or economic resources usually tangible and static which require some alterations to assume
value.
They represent the distrIbution mechanisms of service.
OPERANT RESOURCES
OPERAND RESOURCES
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FP4: Knowledge is the fundamental Source of Competitive advantage
The sinergy deriving from user’s, provider’s(and each member’s) personal resources gives birth to a
unique result, superior to the simple sum of the single individual contributions.
Creative Icon Png, Transparent PNG, png collections at dlf.pt

•Service is the common denominator of all the economies and takes place in every kind of offering
•
•Service is based on intangible activities which normally, but not necessarily, take place in the
interactions between the customers and service employees and/or provider systems, which are
provided as solutions to customer problems (Gronröos, 1990)
•
24
FP5: All economies are service economies
Goods are one of the resources that support co- creation process
 Customers do not buy goods or service, but offerings that release service which in turn create
value (Gummesson, 1995)
Holistic visionà Service as a set of activities (including the use of products) creating new
relationships and new configurations of elements.

FP6
FP8
FP7
The customer is always a co-producer
The enterprise can only make value propositions
A service-centered view is customer oriented and relational
FP10
FP9
Organizations exist to integrate and transform microspecialized competences into complex services
that are demanded in the marketplace
Value is always uniquely and phenomenologically determined by the beneficiary
Value co-creation
Value-in-exchange
Value does not lie in product
Consumer as strategic resource
Multi- level vision
Bidirectional communicative flux
Value- in- context
A2A- collaborative optics
FP6-FP10: The value of exchange, from a m to a collaborative view
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•         From
•to                      : the provision of a priceless experience, strictly connected to the
service
FP6: The customer is always a co-producer
Customer is always a co-producer, an active part of the system who gives a key contribution in
terms of knowledge, skills and creativity.
process in which products, service and experience are jointly developed by companies and by their
stakeholders.
Consumers are engaged in all the phases of the process: design, personalization of the offering,
delivery and production
VALUE CO-CREATION
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value-in-exchange
value-in-use
Circle arrow with tail effect circular arrows Vector Image

•Value co- creation differs from co- production which represents only part of it.
•
Customer’s practice realization of value proposition in order to obtain value-in-use
Customers’ participation in the development of value propositions and in service design in order to
provide a more efficient service.
Co- creation
Co- production
Users contribute to service delivery both through:
• their emotional engagement and previous experience;
•the release of operand (financial capital) and operant (psychological and social factors)
resources.
Users are always value co- creators but they not necessarily are co- producers
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FP6: The customer is always a co-creator of value
CO-CREATION
CO-PRODUCTION

• from target who should be "hit" by a given offering to competitive resource leading to
sustainable competitive advantage.
•
Value proposition suggestions in line with the specific resources owned.
Subjective and context- dependent perception and possible acceptance
of the value proposition proposed by providers.
USERS
PROVIDERS
Durable and bidirectional relationship based on trust
28
FP7: The enterprise can only make value propositions
Consumers/Users

•SDL is customer-oriented and based on a relational view.
•
•The resource exchange between users and providers is based on bidirectional relationships and on
informational symmetry.
•Providers are not anymore in a leading position.
•
•
29
FP8: A service-centered view is customer oriented and relational
Customers participate in all the phases of service delivery (pre-, during and post)
Stakeholder theory (Donaldson and Preston, 1995): engagement in all business strategies and tactics
of all the stakeholder (affected and affecting the conduct of organization), such as consumers,
other companies, institutions, associations, etc.

•Organizations: micro and macro competencies integrators transforming the specialized skills
provided by stakeholders into efficient services.
•
30
FP9: Organizations integrate and transform competencies into complex services
•set of procedures, tasks, mechanisms, activities and interactions supporting co- creation
•point of contact for the interaction between the two parties
Resources integration
All the economic actors involved in value exchange are resource integrators in a network approach
and carry out actions aimed at achieving mutual benefits for everyone
 A2A (“actors to actors”) logic
Resource - Free people icons

•The definition of value co- creation is strictly related to resource exchange and to customer’s
social network
31
Resource integration
McColl-Kennedy et al. (2012) define value co- creation as a: benefit realized from integration of
resources through activities and interactions with collaborators in the customer’s service network
So, customers integrate resources from sources other than the firm. Social networks affect the way
in which they use operand resources.
Social Network Icon - Immagini vettoriali stock e altre immagini ...

•Vargo and Lusch categorize the kind of resources (2011) and the competencies (2014) implemented by
users in value co- creation process.
Actor’s ability to understand the context, to absorb and learn new knowledge from other members of
the system, to remove any kind of resistance to collaboration.
Resources
KIND
SOURCES
INTERNAL
PRIVATE
PUBLIC
Individual experience
Friends and family
Associations, corporations, P.A. officials
Other suppliers or economic actors
Capability to adapt to the variable complexity of the context and to improve the process through
cross- functional teamwork.
ABSORPTIVE
ADAPTIVE
Competencies
32
Resource integration
MARKET- FACING

•The final determination of value is always established by beneficiaries: value, in fact, is
negotiated during the provision, in- use, starting from a specific subjective point of view and
from a specific context.
•
33
FP10: Value is always uniquely and phenomenologically determined by the beneficiary
consumers do not obtain value «simply» by buying a product, but from its use, transformation and
consumption and from the integration and sharing of resources and benefits with other members of
the network.
Final aim of the process: improvement of the general well-being of all the actors of the network
and acquisition of the capability to adapt to the environment.
VALUE-IN-CONTEXT (Vargo et al., 2008)

•Two main enablers and coordination mechanisms of value co-creation (strictly interconnected):
34
The two enablers permit to perform activities and exchange in a «natural» and «coordinated» way in
line with the rules determined a priori.
rules, norms, meanings, symbols, practices and agreement that govern actor’s collaboration
interdependent assemblages of institutions: essential facilitators for value co-creation in markets
and society
FP11: Institutions and
institutional arrangements
INSTITUTIONS
INSTITUTIONAL ARRANGEMENTS
Color, color combination, design, rgb color, rgb combination icon
“Humans create institutions to coordinate their behaviours " (Barile et al., 2016).

S-D logic: Axioms
35


1. Goods are devices to provide service

2. All companies are service companies
3. All economies are service economies.
36
S-D Logic Axiom n.1
A1
Service is the fundamental basis of exchange
The application of operant resources (knowledge and skills), «service», is the basis for all
exchange.
Service is exchanged for service

S-D Logic is focused on the importance of the intangible resources, in particular of the knowledge
as a strategic resource – not just a competitive factor (FP4).
Tangible resources, often inert (operand resources) need intangible and more dynamic activities
(operant resources), relevant to them, in order to be usable and useful.
Innovative contributions:
Knowledge and Resources
37
Resource - Free people icons

38
A1 (FP1): Service is the fundamental basis for exchange


39
S-D Logic Axiom n.2
A2
Value is always co-created by multiple actors, including the beneficiary
Value is always co-created by actors’ interactions, both directly and through the goods.
[Ex. A physician providing a patient with service co-creates value with him, a drug is seen as a
device to facilitate service delivery and value co-creation]
Value co-creation is interactional and combinational

40
A2 (FP6): Value is always cocreated by multiplie actos, including the beneficiary


41
S-D Logic Axiom n.3
A3
All economic and social actors are resource integrators
The context of value co-creation is networks of networks (resource integrators)
Resources come from a variety of sources:
•private sources (ex. themselves, friends, family)
•market sources (so by other actors, through barter or economic exchange)
•public sources (collective access from community and government sources)

42
A3 (FP9): All social and economic actors are resource integrators


43
S-D Logic Axiom n.4
A4
Value is always uniquely and phenomenologically  determined by the beneficiary
Value is idyosincratic, experiential, contextual and meaning laden
Not only actors are co-creators, but they are the only ones who can determine the value, which is
always perceived and “negotiated” based on the context in which the subjects act.

Circular Arrows Sign. Vector. Colorful Icon With Bright Texture ...
44
S-D Logic Axiom n.5
A5
Value cocreation is coordinated through actor-generated institutions and institutional arrangements
Institutions provide the glue for value cocreation through service-for-service exchange
•Institutions: humanly devised rules, norms, and beliefs that enable and constrain action and make
social life predictable and meaningful
•Institutional arrangements: higher-order sets of interrelated institutions
Institutionalization

Luca Carrubbo – Brno 2017
45
Service Ecosystems
“relatively self-contained, self-adjusting system[s] of resource-integrating actors connected by
shared institutional logics and mutual value creation through service exchange”
Lusch and Vargo (2014, p. 161)
Starting from the «social shift» of SDL (11 FP), Vargo and Lusch proposes a new conceptualization
of networks based on the transcending and systems perspective of service
Value co-creation involves complex networks of actors and supply chains (rather than dyads)
THEN, new multi-actor models are required to reread the mechanisms for competitive advantage

Luca Carrubbo – Brno 2017
46
INSTITUTIONS
Service Ecosystems: main dimensions
IT and ICTs based platforms that make exchanges more efficient and accelerate innovation
RESOURCE INTEGRATION
Coordination mechanisms for exchanges based on preexisting shared rules (socially and commonly
accepted) that act as enablers of resource integration
Exchange of resources occurring in the multiple interactions between actors (from pre-delivery,
design to post-delivery)
Set of common values that guide the attainment of shared purposes for each actor
TECHNOLOGY
VALUE PROPOSITION
Checklist, document, kpi, regulation, rule icon Tech Symbols: immagini, foto stock e grafica
vettoriale | Shutterstock Value Proposition Icon of Line style - Available in SVG, PNG, EPS ... Api
Integration Icon: immagini, foto stock e grafica vettoriale ...
https://www.youtube.com/watch?v=Az6D6vzfFrU

Case studies on
Service Ecosystems
47

•Qualitative approach
•Exploratory Case Study: B&B Sector
–informal nature and the synergistic exchange between system’s actors
–
–Analysis of «Bouganville B&B»
–
•Semi-structured interviews:
–face-to-face interviews with b&b owner
–to explore the relationship between b&b owner and customers and identify the existence of elements
that forster VCC
–
–
}Duration: about 20 min
}Conducted in informal style and colloquial settings (at b&b)
}Recorded and transcribed
}Interview Track based on theory
Case study 1: Tourism
48

PROVIDERS
USERS
E
M
E
R
G
E
N
C
E
VALUE CO-CREATION
INNOVATION
New resource and resource integration
New interactions modalities
New institutions
New value
•Value proposition
•Resource integration
•
•Technology
•Institutions
•Value proposition
•Resource integration
•
•Technology
•Institutions
49
Tourism Ecosystem

B&B host
Guests
E
M
E
R
G
E
N
C
E
VALUE CO-CREATION
INNOVATION
New knowledge (culturales), new experiences, new habits
New interactions modalities through the strategic integration of ICTs (pre, during, post)
New rituals:
Photo, Welcome apretif, breakfast with tipical sweet
•The best stay ever
•
•Material, information, logistic, experiential, cultural resources
•
•Ota, Metasearch, site, instant messaging, social network
•
•Formal and informal rules
•The best stay ever
•
•Previous experiences,  cultural, comments and suggestions spontaneous or asked
•Ota, Metasearch, site, instant messagging, social network
•
•Formal and informal rules
•
•
50

Main Insights
•emerging inputs and outcomes (new value) can foster value co-creation and innovation
•
Value Co-Creation
Innovation
Co-evolution
Viability
51
outputs can act as a basis for the constant renewal of values and innovation that leads to
co-evolution and viability over time

Qualitative
Case study based on content analysis
Technique
Method
Units of analysis
The case
Website (report, codes)
Social networks page
•Idiographic approach (underlying dimensions)
•Exploratory stage
•Multi-stakeholder network
•Sustainable innovation practices
Macro-areas for analysis sheet
•Different strategies for value co-creation and innovation
•ICTs role
•Different innovation outcomes
FOR EACH STAGE OF CO-CREATED INNOVATION
Case study 2: Green Pallet
52

Co-created innovation
strategies
ICTs role
Innovation outcome
53
MICRO
MESO
MACRO
Reinterpreting “Palm” as an ecosystem

•Different steps of co-created innovation
•Different contexts
•Different technologies
•Different innovation outcomes
Multi-leveled approach
CO-DESIGN
CO-DEVELOPMENT
CO-EVALUATION
CO-LEARNING
VALUE PROPOSITIONS
Engagement/ Experience
Creation of new value, service process, product
Renewal of innovation outcomes
CREATIVITY
CO-EVOLUTION
in use
in context
INNOVATION
VALUE CO-CREATION
TECHNOLOGY
SHARED GOALS
COHESIVE CULTURE
Strategic innovation management in ecosystems
54

CO-DEVELOPMENT
CO-LEARNING
Engagement
Experience
Renewal of value
VALUE CO-CREATION
RQ1
RQ2
CULTURE
ECONOMIC SUSTAINABILITY
SOCIAL RESPONSIBILITY
ENVIRONMENTAL SUSTAINABILITY
SOCIAL INNOVATION
PROCESS-SERVICE
INNOVATION
CO-DESIGN
CO-EVALUATION
TECHNOLOGY INNOVATION
EXTERNALIZATION
COMMON VALUE PROPOSITIONS
SHARED GOALS
COHESIVE
CULTURE
CREATIVITY
CO-EVOLUTION
55
Different innovation in Palm ecosystem
http://www.palm.it/portals/13/iocison.png http://www.palm.it/portals/13/Images/2banner.jpg

Gummesson receiving the S-D Logic Award at the 2011 Naples Forum on Service.
(left to right: Dr. Robert F. Lusch, Dr. Evert Gummesson, Dr. Stephen L. Vargo)
56

Key References
•Vargo S.L., Lusch R.F., Evolving to a new dominant logic for marketing, in Journal of marketing,
vol. 68, n. 1, 2004, pp. 1-17.
•Vargo, S. L., Lusch, R. F. (2008). Service-dominant logic: continuing the evolution. Journal of
the Academy of marketing Science, 36(1), 1-10.
The foundations
The development
The different shades of SDL
The research agenda
57
Vargo, S. L., Wieland, H., Akaka, M. A. (2015). Innovation through institutionalization: A service
ecosystems perspective. Industrial Marketing Management, 44, 63-72.
Vargo, S. L., & Lusch, R. F. (2016). Institutions and axioms: an extension and update of
service-dominant logic. Journal of the Academy of marketing Science, 44(1), 5-23.
Nambisan, S., & Baron, R. A. (2013). Entrepreneurship in innovation ecosystems: Entrepreneurs’
self–regulatory processes and their implications for new venture success. Entrepreneurship theory
and practice, 37(5), 1071-1097
Edvardsson, B., Tronvoll, B., & Gruber, T. (2011). Expanding understanding of service exchange and
value co-creation: a social construction approach. Journal of the academy of marketing
science, 39(2), 327-339.
Vargo, S. L., & Lusch, R. F. (2017). Service-dominant logic 2025. International Journal of Research
in Marketing, 34(1), 46-67.
Barile, S., Lusch, R., Reynoso, J., Saviano, M., & Spohrer, J. (2016). Systems, networks, and
ecosystems in service research. Journal of Service Management.

Service Science
2.2
58

•Service Science management, engineering and design (SSMED)
59
Aim:  to combine and to apply computer science, operational research, industrial engineering,
management and social sciences to find the most appropriate organizational model to support the
emergence of value
Service Science
The founders: Spohrer and Maglio (2008)
Atom symbol - science icon Royalty Free Vector Image
•Multidisciplinary research stream that studies the implications emerging from the new management
approach to services
•Unifying framework for service design, delivery and evaluation that aims at developing the
capabiliteis required by service economy;
•Introduced after company’s shift from a good-logic to a service centered perspective

•Service systems are value-creation networks composed of (Bryson et al. 2004; Maglio et al. 2006):
•People
•Organizations
•Technology
•Shared information
•
•
•
Service Systems
•promote real-time relationships and accelerate up co-learning processes in many fields (e.g. smart
services in the energy sector, transport, etc.).
•come from systematic methods, continuous learning, data collection, innovation, social
responsibility and network governance, and all the operations that benefit from the application of
new technologies.
60

•Service systems: value-co-creation configuration of people, technology, value propositions
connecting internal and external service systems, and shared information able to create and deliver
value to providers, users and other interested entities, through service.
•
•SPOHRER, MAGLIO, BAILEY AND GRUHL (2007)
•
•
•
•
•
61
(1) Service Systems: definition
The aim of service system is to use its own resources and the resources exchanged with other actors
to improve its own and other’s well-being
Service
systems

Luca Carrubbo – Brno 2017
 value-co-creation configurations,
 resources integrators,
 knowledge-based,
 capable of enabling connections and interaction,
 with the aim of reaching desired outcomes,
 simply, always, an operative application,
any number of elements, interconnections, attributes, and stakeholders interacting in a
co-productive relationship.
… a Service System is basically composed of heterogeneous entities, interacting with each other
with specific purposes
(2) Service Systems: definition
62

Luca Carrubbo – Brno 2017
63
«A service system is any number of elements, interconnections, attributes and stakeholders
interacting in a co-productive relationship that create value, in which the principal interactions
take place at the interface between the provider and the customer»
The different definitions
Spohrer, Vargo, Maglio and Caswell, 2008
«A service system primarily relates to customer-provider interactions as well as open system with
it being capable of improving its own state and the one of another system though acquiring,
sharing, or applying resources, with the aim of creating a basis for systematic service innovation»
Golinelli, 2008
«Service systems can be represented as real networks, in which the same entities combine their
strengths through direct and indirect connectivity, as they are oriented toward enduring
competitiveness and daily interactions with other external interdependent service systems»
Polese, 2009

•The concept derives from systemic vision and network theory (Richardson, 1972; Normann and
Ramirez, 1993; Castells, 1996; Capra, 2002)
•
64
Service Systems: origins
entity emerging from a specific structure (organzational-physical equipment) thanks to interactions
among all system’s members (Barile, 2013).
Aim: survival through the acquisition (and the exchange) of knowledge from the other systems
situated in the context which leads to the creation of new knowledge.
Since value co- creation is centred on knowledge exchange to acquire mutual benefits, system is the
most adequate configuration for companies aiming at acquiring sustainable competitive advantage.
System

Luca Carrubbo – Brno 2017
•“complex of interacting elements” (Von Bertalaffy, 1956)
•“an entity that is adaptable for the purpose of surviving in its changing environment” (Beer,
1975);
•“entity which is a coherent whole” (Ng, Maull and Yip, 2009)
From Systems Theory
65
Composed of many part (Parsons, 1965), boundaries, connections and  different relationship with
relevant stakeholders based on the sharing of critical and influential capabilities
ü
sub-systems focus on the analysis of relationships among its own internal components while
supra-systems focus on the connections between the analysis unit and other influencing systemic
entities in their context (Golinelli, 2005)
SYSTEM
Actors & connections
SUB-SYSTEMS
SUPRA-SYSTEMS
Solar system - Free nature icons

Today, service systems represent an emerging issue in economic research, all-encompassing many
specific topics (innovation, smart cities and communities) and even quality, traditionally related
to technologies and processes
MAIN REFERENCES:
ALTER, S. (2008)
SPOHRER, J., VARGO, S.L., MAGLIO, P.P, CASWELL, N. (2008)
Service Systems
66
Reinterpretation of service design, service supply and fruition, in which multiple active actors
synergistically participate in the value co-creation process, which is characterized by
resource-sharing and common finality.
Risultati immagini per insight icon

•Organizations: interconnected systems entities
•sharing the same value system.
•
67
(1) Service Systems: ORGANIZATIONS
A Service system is composed of a network of organizations carrying out integrations of multiple
resources in order to achieve reciprocal benefits for all the stakeholders.
Every member of the system has its own interests and pursues specific aims. Thus, managers should
seek to harmonize the differing needs of each subject in an attempt to satisfy the stakeholder’s
demands and, at the same, the well-being of the system.
Risultati immagini per organization icon
Individual objectives
System’s
Goal

•Human factor is essential to balance the
•needs of all the stakeholders.
•
•
68
(2) Service Systems: PEOPLE
Knowledge is the real added value to foster value co- creation, since this process is grounded of
the exchange of internal and external (contextual) competencies and resources
In a market based on intangibilities, service delivery does not represent only economic exchange,
but can be undesrtood as the result of the integration of the specialized skills of each member.
Customers can help firm to improve service starting from service design, by sharing their
capabilities andcreativity.
Group of people icon Royalty Free Vector Image

•ICTs: opportunities for providers and consumers to exchange resources, fostering the sharing of
value propositions at intra- and inter-organizational level
69
(3) Service Systems: TECHNOLOGY
The diffusion of new technologies and platforms (community, forum, blog, social network) can
enhance the interactions among stakeholders, with an increase in stakeholder engagement.
Users can make comments and judge service quality, providing organizations with suggestions on the
improvement of the offering.
The more the social and relational capital grow, the more the knowledge exchanged intensifies.

•The possibility to transfer every kind of information in real time permits users to play a
predominant role in business decision- making and service improvement
•
(4) Service Systems: INFORMATION
70
Through technology and ICTs co- creators can constantly share flows of information, increase their
knoweldge, strenghten relationships and modify their behaviors to pursue common goals.
The combination of the 4 elements of service systems (organizations, people, technologies and
information) allows to create value through the implementation of a networked system in which
companies, institutions, organizations and users share a systematic flux of information and
know-how, which can be managed in an efficient way thanks  to technology

Service System as Value Network
People
Shared Information
Organizations
Technology
71

Luca Carrubbo – Brno 2017
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Smart traffic  systems
Smart water management
Smart energy grids
Smart healthcare
Smart food systems
Intelligent     oil field technologies
Smart regions
Smart
weather
Smart countries
Smart supply chains
Smart cities
Smart retail
Source: www.ibm.com/think
Complex Service Systems, as smarter systems improve quality of life,
creating more opportunities for win-win interactions:
resulting in measurable resource access & value-cocreation for multiple stakeholders.
72
Complex Service Systems

Luca Carrubbo – Brno 2017
http://www.ibm.com/smarterplanet/global/images/us__en_us__retail__retail_icon__170x120.gif
http://www.ibm.com/smarterplanet/global/images/us__en_us__food__food_vision_icon__170x120.gif
Smarter Food
Making retail smarter
Iterative, interactive, instrumented, interconnected, intelligent
(More measurement data, More networks, More learning and adaptation)
us__en_us__products__product_vision_icon__170x120
Smarter Products
73
Smarter Planet

74
Service Science vs S-D logic
SPOHRER, J., ANDERSON, L., PASS, N., AGER, T. (2008)
SPOHRER, J. MAGLIO, P.P., BAILEY, J., GRUHL, D. (2007)
VARGO, S.L., LUSCH, R.F., WESSELS, G. (2008)
•Relational approach to business
•Focus on resources (RBV)
•Many-to-many logics to business behaviour
Similarities with SDL
Differences with SDL
•Practical approach
•Technological- Informational focus
•Smart vision on planet
•Measurement of service and systematic search for innovation and continuous improvement
•
•

Case studies on
Service systems
75

Luca Carrubbo – Brno 2017
76
Case study 1: Service Journey
J O U R N E Y
Shared information
T
E
C
H
N
O
L
O
G
Y
COMPUTING
KNOWLEDGE
ATTITUDE
MOTIVATIONS
EXPECTATIONS
VALUE
Process
management
SKILLS
INFORMATION
INTEGRATED ARCHITECTURE
DATA Integration
DATA
Research & collection
DATA
Selection
DATA Recombination
DATA Interpretation
Re-use & Storage
DATA
Encounter
PRE
POST
TP
TP
TP
TP
TP
TP
PERCEPTION & EVALUATION
PURCHASE/BUSINESS DECISIONS
RESHAPING
OPINIONS
Neslin et al., 2006
Verhoef et al., 2007
Voorhees et al., 2017
T
E
C
H
N
O
L
O
G
Y

pre
Research & Collection
1
People
Organizations
•USER’S NEEDS IDENTIFICATION
•PREDICTION AND ENHANCEMENT OF WILLINGNESS TO ENGAGE
VALUE PROPOSITIONS
•SEARCH, EVALUATE  & COMPARE SERVICES
•WILLINGNESS TO SHARE
Touchpoints
•PLANNED COMMUNICATION (SOCIAL NETWORK)
•REVIEWS ON THE SERVICE
•RECOMMENDATION SYSTEMS
•METASEARCH
•E-BOOKING
1
Shared information
DATA
during
Sharing & Integration
2
EXCHANGE OF EXPERIENCE, KNOWLEDGE, CULTURE, «SENTIMENT»
SUPERVISION OF THE DEGREE OF
INVOLVEMENT
Touchpoints
•RATING SERVICES IN-STORE OR DURING E-COMMERCE TRANSACTIONS
•INSTANT MESSAGING APPLICATIONS
Research techniques
pre
Selection
Organizations
3
Touchpoints
People
Organizations
SHAPING EXPERIENCE
ALIGNMENT/MISALIGNMENT AND INTERNALIZATION OF VALUE PROPOSITIONS
SKILLS ENHANCEMENT
•EXTRACTION OF USER’S FEEDBACK ON SERVICE
•RECALL COMMUNICATION
Recombination
post
Recombination
INFORMATION
TO EXTRACT KNOWLEDGE
•FEEDBACK’S ANALYSIS AND MANAGEMENT
Organizations
People
post
4
•SENTIMENT ANALYSIS, TEXT MINING FOR USERS PROFILING
•MACHINE LEARNING, COGNITIVE COMPUTING & FUZZY LOGIC
Analytics
Touchpoints
•SIMULATIONS, SCENARIO-BASED ANALYSIS
Analysis
•CLOUD COMPUTING SYSTEMS
•ORDER MANAGEMENT
KNOWLEDGE
during
CREATION OF A COMMON SET OF VALUES
IDEA PROPOSITION FOR SERVICE IMPROVEMENT/CREATION OF
NEW SERVICE
•LIVING LABS
•OPEN PLATFORMS (CROWDSOURCING, CO-DESIGN)
5
Transformation
Touchpoints
VALUE
post
Touchpoints
Re-use & Storage
•POST-DELIVERY SERVICES
(E-COMMERCE)
WORD-OF-MOUTH
People
Organizations
CONSTANT REGENERATION AND RENEWAL OF VALUE- SERVICES- PROCESS
New value
6
•DATAWAREHOUSE & DATABASE
•CLOUD COMPUTING
Analytics
Touchpoints & Multi-channel strategies
77

[Voice – in/out bound,
post sales, etc.]
[In Bound – customer care, web Contact center ]
[lists, contents,
on-line campaign]
[lMailing –
DEM – Social –
CRM – Nurturing]
KNOWLEDGE
Content Management e gestione campagne di nurturing: newsletter, sms, sondaggi
INTERCONNECTION OF CHANNELS
HUMAN CONTACT
INTERACTIONS
CREATION OF NEW TOUCHPOINTS
Experience PERSONALIZATION
TO ENGAGE
TO RAISE AWARWENESS
Image result for loyalty icon
TO ACQUIRE
TO RETAIN
78
The Case

•Home temperature control with the position of the tenants
•Smart thermostat Tado ...
•Remote hermosthat Prices
•Best smart thermosthat
•How to set thermosthat by remote…
•Remote thermostat app
•Remote Control Programmable Smart thermostat with applications
•Waste reduction
>
INFORMATIONAL RESEARCH
>
COMPOSITIONAL RESEARCH
>
BRANDED
RESEARCH
>
EXPERT
RESEARCH
First approach to research
Basic need
Generic informational sources
Mix online-offline
Query on use, consumption & performance.
Informative posts
for users with a given need
First identification of the kind of product they may be interested in
Users not satisfied with a brand or in search for a brand not yet tested.
Online search for users with an advanced state of knowledge, looking for specific products for
their needs.
Smart Home: Analysis of the Journey
79

ì

Risultato immagini per system icon Risultato immagini per network technology
SERVICE
SYSTEMS
4.0 Industry & Smart technologies
SMART
SERVICE SYSTEMS
Increased
connectivity
& Information sharing
Data collection & analysis
Knowledge co-creation
INNOVATION OPPORTUNITIES
80
Case study 2: Technological cluster for Aerospace

people
organizations
value co-creation
things
things
things
things
From service systems….
…to smart service systems
Lim et al. (2016)
Lim and maglio (2019)
Spohrer et al. (2007, 2008)
81

T
E
C
H
N
O
L
O
G
Y
T
E
C
H
N
O
L
O
G
Y
KNOWLEDGE
INTEGRATED ARCHITECTURE
DATA
The interactions organizations-people (connection) are strengthened and intensified…
..thanks to the proliferation of technological channels (things) that compose an integrated
infrastructure in which information is exchanged and shared in an immediate and transparent way
(communication)…
..and which fosters
continuous data collection & incorporation, resources combination…
…that, through the application of analytics (computation), facilitate the transformation of
information into knowledge, and new value…
P1
P2
P3
P4
…“accumulated” new value and knowledge can enhance continuous improvement.
P5
THINGS
THINGS
THINGS
THINGS
Reinterpreting service systems
82

83
National cluster for aerospace technology
                    Citizens
Suppliers
Complementary suppliers
Sub-suppliers
Spin-off
Users
Mobility industry
Aerospace industry
Umbria
DTA
Apulia
DAC
Campania
Lombardia
Sardinia
Emilia Romagna
Basilicata
Abruzzo
DTA
Lazio
Accademic Spin-off
Public Administration
Research Centers
Non-profit organizations
S2S
B2B
B2C
S2S
C2C
Regional clusters
B2S
Risultato immagini per citizen icon
Universities

Suppliers
Complementary suppliers
Sub-suppliers
Spin-off
Improved Knowledge & Skills
Resources
Data analysis
Technology tools
A
C
T
O
R
S
R
O
L
E
S
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Stakeholders Mapping


•Financial & material
•Technological & informational
Resources
Technology tools
E-manufacturing, e-procurement and Digitalization of supply chain through:
•Internet of things, augmented reality, wearable devices;
•Integrated Management systems: SOA web-based architecture based on learning based algorithms.
Activities
1) new co-created solutions for supply chain competitiveness (sub-suppliers);
2) smart maintenance for the digitalization of supply chain (complementary suppliers).
A
C
T
O
R
S
85
Structural analysis
User Icon - Member Icon Png, Transparent Png - kindpng Risultati immagini per resource icon

STAR
Coordinator Broker
Representative brokers
•productive and process competencies;
•technological, managerial and relational skills.
Improved Knowledge & Skills
Data analysis
Integrated methodology and data orientation based on real time data analysis and feedback for
prompt execution of actions and problem solving
Suppliers
Complementary suppliers
Sub-suppliers
Spin-off
Technology tools
R
O
L
E
S
86
Systems analysis
BRIDGE

Mara Grimaldi
margrimaldi@unisa.it
ASVSA Associazione per la ricerca sui Sistemi Vitali
THANK YOU.
Questions? Comments?
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