Customer dominant value formation in service

Abstract

Purpose

The purpose of this paper is to extend current discussions of value creation and propose a customer dominant value perspective. The point of origin in a customer‐dominant marketing logic (C‐D logic) is the customer, rather than the service provider, interaction or the system. The focus is shifted from the company's service processes involving the customer, to the customer's multi‐contextual value formation, involving the company.

Design/methodology/approach

Value formation is contrasted to earlier views on the company's role in value creation in a conceptual analysis focusing on five central aspects. Implications of the proposed characteristics of value formation compared to earlier approaches are put forward.

Findings

The paper highlights earlier hidden aspects on the role of a service for the customer. It is proposed that value is not always an active process of creation; instead, value is embedded and formed in the highly dynamic and multi‐contextual reality and life of the customer. This leads to a need to look beyond the line of visibility focused on visible customer‐company interactions, to the invisible and mental life of the customer. From this follows a need to extend the temporal scope, from exchange and use even further to accumulated experiences in the customer's life and ecosystem.

Research limitations/implications

This paper is conceptual. It discusses and presents a customer‐dominant value perspective and suggests implications for empirical research and practice.

Practical implications

Awareness of the mechanism of the customer value formation process provides companies with new insight on the service strategy, service design and new service innovations.

Originality/value

The paper contributes by extending the value construct through a new customer dominant value perspective, recognizing value as multi‐contextual and dynamic based on customers' life and ecosystem. The findings mark out new avenues for future research.

Citation

Heinonen, K., Strandvik, T. and Voima, P. (2013), "Customer dominant value formation in service", European Business Review, Vol. 25 No. 2, pp. 104-123. https://doi.org/10.1108/09555341311302639