Enriching the Service-Dominant Logic from a Value-in-Context Perspective

Since the introductory articles on what has become known as the service-dominant logic (SDL), research has been devoted increasingly to elaborate its specifics and to enrich the ten fundamental premises (FP) formulated by Vargo and Lusch (2008). Whereas the previous contributions of the SDL are mainly theory-driven, this article is positioned between theoreti-cal- (deductive) and empirical-driven (inductive), being neither a pure theoretical contribution to the fundamental premises nor a pure testing of them through empirical data. Rather, we aim at learning from two fundamental premises by using them in the context of public trans-port services. The two fundamental premises selected refer to FP 6: The customer is always a co-creator and FP9: all social and economic actors are resource integrators.
The empirical evidences are obtained from public transport services, a service industry that has been mainly neglected by service researchers. We obtained a broad set of primary and secondary data on the Swiss public transport system in order to enrich the SDL. The Swiss public transport system represents a tremendous success story, which can be highlighted by an increase of customers using the Swiss public transport system by approximately 50% in the last seven years. More detailed performance indicators refer to 307 million people using the railway system SBB in 2007, which are 38.2% more than in 2000 or 203 million people using the public transport services in the city of Zurich, which are 43.1% more than in 2000. Considering the population of Switzerland with only 8 million people, the Swiss public trans-port system seems to create an exceptional customer value leading a high number of users. The success of the Swiss public transport system cannot be attributed to an increase of pub-lic funding, but rather to a change in the perspective of value creation. Traditionally, the pub-lic transport system has followed the goods-dominant logic (GDL), emphasizing value in ex-change, in which transport services are viewed as a special type of good(s). An illustration of the (GDL) emphasizing value in exchange is the exploitation of new transport service oppor-tunities through using half fare cards, increasing the number of destinations and so on. In contrast, the service-dominant logic (SDL) suggests that value is co-created with customers and service denotes a perspective of value creation focusing on value-in-use in the cus-tomer's own context.
Our empirical data suggest that different companies participating in the Swiss public trans-port system are becoming resource integrators. The locus of value creation moves from the relationship between single customers and public transport service providers to value crea-tion in the context of networks. The results suggest that customers and service providers have developed specific applications of knowledge and specialized skill(s). The interaction of this knowledge and skills form customer experience rooms or in other words create value-in-context. In business practice, it means that service providers integrate their resources to offer easy-to-use timetables, integrate the pricing across different transport facilities (bus, train, tram or sub-way) and provide sound and reliable travelling experiences. Customers apply their knowledge on using mobile phones to buy tickets, to navigate through train stations or to request timetable services. The application of the knowledge creates less critical incidents by using the public transport, because they reduce, for example, waiting times for trains or queues on the ticket counters leading to higher customer satisfaction.
As result, the article is expected to contribute to the SDL from two different perspectives. We enrich the SDL by applying the concepts of customer experience room and/or value-in-context. By doing so, we lay the foundation in order to further develop the SDL by describing the potential interrelations between FP 6 and FP 9. As a side effect, by using the public transport services as a unit of analysis, we also contribute to a research field that has been largely neglected by service management researchers.