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Kenneth Le Meunier-FitzHugh, Jasmin Baumann, Roger Palmer, and Hugh Wilson This study explores the implications of an organization moving toward service-dominant logic (S-D logic) on the sales function. Driven by its customers’ needs, a service orientation by its nature requires personal interaction and sales personnel are in an ideal position to develop offerings with the customer. However, the development of S-D logic may require sales staff to develop additional skills. Employing a single case study, the study identified that sales personnel are quick to appreciate the advantages of S-D logic for customer satisfaction and six specific skills were highlighted and explored. Further, three propositions were identified: in an organization adopting S-D logic, the sales process needs to elicit needs at both embedded-value and value-in-use levels. In addition, the sales process needs to coproduce not just goods and service attributes but also attributes of the customer’s usage processes. Further, the sales process needs to coproduce not just goods and service attributes but also attributes of the customer’s usage processes.
Service-dominant logic (S-D logic) has been creating considerable interest in academic and practitioner circles with the proposition that S-D logic has the potential to dramatically alter an organization’s operations, culture, and overall strategic outlook to create mutual benefits to buyer and seller groups (Vargo and Lusch 2004). Some skeptics may regard it as “old wine in new bottles,” as indeed elements of concepts such as market orientation, services and relationship marketing, as well as network perspectives and integrated marketing communications can be traced in S-D logic (Aitken et al. 2006). However, S-D logic consolidates these ideas into a single coherent construct that not only applies to individual aspects of marketing but also has the potential to transform the whole discipline in theory and practice. Focusing on service and customer orientation as the heart of all business activity, S-D logic may be seen as a framework for reconfiguring sales activities to seek and provide integrated solutions for customers. As one of the primary interfaces with the buyer, the sales function is likely
Kenneth Le Meunier-FitzHugh (Ph.D., University of Warwick), Senior Lecturer in Marketing, Norwich Business School, University of East Anglia, UK, firstname.lastname@example.org. Jasmin Baumann (M.A., University of Hertfordshire), Doctoral Researcher, Norwich Business School, University of East Anglia, UK, email@example.com. Roger Palmer (Ph.D., Cranfield University), Dean of the Business School, Bournemouth University, UK, rpalmer@bournemouth. ac.uk. Hugh Wilson (Ph.D., Cranfield University), Professor of Strategic Marketing, Cranfield School of Management, Cranfield University, Cranfield, UK, firstname.lastname@example.org.
to be highly influenced by the change of focus driven by S-D logic. Interestingly, Vargo and Lusch (2004) make no specific reference to sales activities in their article, although Sheth and Sharma (2008) suggest that five of the original nine fundamental premises are specifically relevant to personal selling (see boldface items in Table 1). Traditionally, the sales function has focused on persuading customers that they require the supplier’s goods/services and has coordinated the servicing of that demand (Moncrief and Marshall 2005; Weitz and Bradford 1999). This definition best relates to transactional selling that necessitates a very specific set of selling skills, which have been well documented and form the basis of sales literature (e.g., Cespedes 1994). However, the more complex modern sales environment is demanding that salespeople improve their skills and develop an understanding of integrated solutions and relationship building particularly for high-value goods and services (e.g., Lian and Laing 2006; Sharma 2007; Sheth and Sharma 2008). The cultivation of customer relationships requires a more tailored approach to selling than transactional selling (e.g., Ingram, Schwepker, and Hutson 1992; Piercy, Cravens, and Lane 2007). Further, Homburg, Workman, and Jensen (2000) observed a trend for modern sales forces to be structured around providing coherent, multiple solutions for specific customer groups. These environmental drivers require the sales force to become more sensitive to the needs of their customers, have greater flexibility in their response, and develop an integrated solutions perspective (Tuli, Kohli, and Bharadwaj 2007). The main proposition of this paper is that the sales function, as the primary interface with the customer, is being
Journal of Marketing Theory and Practice, vol. 19, no. 4 (fall 2011), pp. 423–440. © 2011 M.E. Sharpe, Inc. All rights reserved. ISSN 1069-6679/2011 $9.50 + 0.00. DOI 10.2753/MTP1069-6679190405
market analyst. The analysis of the case data are presented and the consequences for the sales function discussed. LITeRaTuRe RevIeW The role of sales is changing and is driven by the development of a focus on service and other factors in the environment. selling. which is followed by an outline of managerial implications and recommendations for the implementation of S-D logic in sales practice. As customers become more demanding in both B2B and B2C settings. as well as G-D and S-D logic—are explored in the following section. Subsequently. and value co-creation. The adoption of solution selling perspectives and the gradual move from goods-dominant logic (G-D logic) to S-D logic has fundamental implications for sales activities. the basic activities may be reduced to three (contacting. it is common to find sales organizations under . and outline how these concepts are linked and ultimately affect day-to-day sales activities. Sheth and Sharma (2008) called for more research into how the consultative selling process is replacing the traditional seven steps of selling. planner. sales forecaster. In order to identify a framework for our investigation. and managing information between the seller and buyer (Cespedes 1994). Note: Items in boldface were identified by Sheth and Sharma (2008) as relevant to sales. buyer behavior expert. presentation of solution. p. integrated solutions. but to our knowledge there has not been any research into the impact of S-D logic on specific sales activities at an operational and managerial level. but only offer value propositions A service‑centered view is inherently customer oriented and relational All social and economic actors are resource integrators Value is always uniquely and phenomenologically determined by the beneficiary Source: Sheth and Sharma (2008) and Vargo and Lusch (2008). transformed by the emergence of S-D logic. and managing information). 266) may become the key activities of sales personnel. this tactical view of sales activities is complemented by longer-term strategic roles such as customer partner. market analyst. we discuss a case study within which the exploratory empirical work was conducted. buyer–seller team coordinator. information gatherer. The changing Role of sales The traditional sales role in business-to-business (B2B) organizations comprises five basic types of activities carried out by the salesperson: contacting customers. Service in this context is considered to be the intangible elements that are exchanged between the buyer and seller with the goods/service benefits being purchased (Lusch and Vargo 2006). selling the product or service. and continued customer support” (Sheth and Sharma 2008. They suggested that “problem identification. planner. Therefore. market cost analyzer. These concepts—the evolution of the sales role. Further. S-D logic. an effective salesperson in either context will understand the interactive nature of personal selling and how it relates to organizational objectives and behavior (Plank and Dempsey 1980). In business-to-consumer (B2C) organization. The suggestion is that organizations adopting S-D logic perspective will drive sales personnel to develop new capabilities. and sales forecaster. information gatherer. integrated solutions. This perspective of exchanging service for service (Vargo and Lusch 2004) is central to the discussion of S-D logic. servicing the account. working with wholesalers. we present a review of the literature on the role of the sales function. but again the strategic roles still include customer partner and service provider. and technologist (Moncrief and Marshall 2005. Wilson 1993). However.424 Journal of Marketing Theory and Practice Table 1 Summary of Foundational Premises FP1 FP2 FP3 FP4 FP5 FP6 FP7 FP8 FP9 FP10 Service is the fundamental basis of exchange Indirect exchange masks the fundamental basis of exchange Goods are distribution mechanisms for service provision Operant resources are the fundamental source of competitive advantage All economies are service economies The customer is always a co‑creator of value The enterprise cannot deliver value. customer service provider. Sheth and Sharma (2008) have identified that S-D logic has general implications for sales operations on a strategic level. The purposes of the current paper are to investigate how S-D logic thinking is moving sales toward a service focus where goods are seen as secondary to the provision of services and to explore how sales activities have been influenced through an organization adopting S-D logic.
definition. specifically in terms of forming long-term buyer–seller relationships (Weitz and Bradford 1999). and Barnes 1994). skills. More and more organizations are offering their customers integrated solutions. providers have to acquire new capabilities to incorporate prebid and postdeployment activities into their offering to create substantial value for their customers (Brady. To the customer. and Lane 2007). This strategic customer management approach should be based on three key issues: Intelligence—concerned with leveraging and enhancing customer knowledge to add value to customer relationships Interfaces—refocusing sales force efforts onto the management and exploitation of critical interfaces that impact on customer value . and special requirements. Davies. including interpreting the benefits of the offer. 575–576) Brent and Rogers argue that the “ability to apply knowledge. 241). Brady. customer focus. Hunter. Davies. particularly to purchasers of high-value items where the salesperson can use their in-depth product knowledge to match the perceived needs of the buyers as well as negotiate on price. and that the management of these sales relationships could transform the organization (Jolson 1997. Salespeople have established relationships with their customers and understand their needs. Piercy. p. sales personnel already have demonstrated the ability to communicate and craft solutions for their customers. Schwepker. that is. Cravens. This emphasizes the importance of establishing two-way communication when selling. a combination of their products with other services in order to meet a customer’s particular needs (Brady. Therefore. and Hobday 2007). Tax. . and problem solving are even more important than the ability to listen (Kennedy 2006). and Methta 2000). and Hutson 1992). seamless and sustained point of value delivery to customers. Brady. and Hobday 2006). In addition. to solve the customer’s problem . Sales personnel have developed a range of skills that enable them to create and maintain effective relationships with customers. and close. a credible sales force is essential to build trust and long-lasting relationships with customers (Flynn and Murray 1993). and Gann 2005. but previously this has been a one-way process that is delivered to an often rather passive customer. as the salespeople are the experts who interpret the benefits of the offer for the customer. Therefore. Piercy and Lane 2003). and Gann 2005. delivery. Integrated solutions The shift to integrated solutions may be described as a move toward a new marketing paradigm (Sharma 2007. Over the past years. Jackson. which enable the sales personnel to combine products and services to fulfill the customers’ demands and expectations (Bradley. Stafford (1996) believes that personal selling brings a sense of comfort to the customer. and Jensen 2000). and Integration—the responsibility for welding all the company activities and processes that impact on customer value into a single. there is an emerging trend for sales to be structured around providing coherent solutions for specific customer groups from the product/service offering from multiple divisions (Homburg. Sheth and Sharma 2008). The two-way communication between buyer and seller allows for identification of the buyer’s specific needs and problems so that the presentation and demonstration of the product’s/service’s features and benefits can be tailored to the customer’s requirements (Doyle 2002).Fall 2011 425 intense pressure to meet elevated expectations (Ingram. Establishing the credibility of the sales force in order to build trust and long-lasting relationships with their customers is now regarded by many companies as a critical strategic capability (Flynn and Murray 1993. Davies. (Piercy and Lane 2003. Organizations are recognizing the critical role that salespeople play in their overall success (Dubinsky. Salespeople have a specific boundary-spanning role (Matsuo 2006) by having the potential to coordinate the marketing effort to the customers and personalize the marketing message. and acting as an intermediary between the organization and the customer. 35) provide the basis for successful sales behaviors. and Gann 2005). This shift implies that projects comprising integrated solutions exceed the traditional cycle of concept. p. . . It is proposed that customers are demanding superior relationships with the organization. Workman. execution. Davies. providing expert information. as buyers increasingly demand solution-based instead of attributebased products and services (Brady. both backward to a preproject phase and forward beyond the actual delivery into the operational stage. Anderson. . and personal attributes. the call for integrated solutions has spread across industries. and Santiapillai 2000. . In this situation. Davies. sales skills such as empathy. Moreover. . Hodge and Schachter (2006) indicate that offering a creative or tailored solution on the spot is an important facet of the process for many customers. Weitz and Bradford state that “salespeople play a key role in the formation of long-term buyer–seller relationships” (1999. underpinned by the core capabilities and competencies of the firm” (2007. pp.
value through direct or indirect (i. 5). a salesperson not only acts as a representative of the provider’s offer but also as the customer’s consultant. Working together with the customer. This entails understanding the capabilities of the organization and the needs of their customers intimately. that is. Vargo. “Service” is defined as the basic denominator of all exchange and therefore encompasses experiences arising from direct interaction with service providers as well as interaction with manufactured goods that become mechanisms for service (Ballantyne and Aitken 2007. the concept embraces a “market with” orientation in which the customer is seen as a partner who creates value in collaboration with the organization and both parties enter into a dialogue (Jacob and Ulaga 2008. that is. Lusch. Ballantyne and Varey 2008. goods-Dominant Logic and service-Dominant Logic According to Vargo and Lusch (2004).e.. In essence. Sharma 2007. and therefore rejects the “promote to” and “market to” philosophy of G-D logic. and to achieve the utmost production efficiency. formerly transactional sales personnel have to evolve into customer experts. and Bharadwaj have demonstrated that integrated solution purchasers perceive solutions as a “set of customer–supplier relational processes comprising (1) customer requirements definition. Kohli. Brady. Instead of regarding their product as the starting point. (2) customization and integration of goods and/or services. passing this knowledge on to the organization. and marketed to. relationship manager. 362) to successfully become solutions oriented. Providers of integrated solutions have to “understand how value is created through the eyes of the customer” (Brady. Davies. Vargo. and with the suppliers to share and integrate operant resources such as specialized skills and knowledge to develop superior value propositions for customers and Tuli. marketing inherited a G-D logic from economics that centers on the physical exchange of units of manufactured output. and Gann 2005. Integrated solutions are continuous processes. S-D logic views customers as operant resources. suppliers have to think ahead and consider the effects of each step on the subsequent stages while executing it (Tuli. the customer is a passive consumer who is targeted. customers always acquire service experiences (Grönroos 2008). organizations have to develop strong relationships and networks with customers and suppliers—with the customers to enter into a dialogue as well as to co-create service experiences and. the output is standardized and inventoried until demanded by a consumer. and selling of tangible objects (matter or goods) that are embedded with value and utility during the manufacturing process as the focus of economic activity. p. Vargo and Lusch 2004). Regarding customers as the ultimate arbiters of value that is co-created by the consumer and the organization in an interactive process also implies that the firm itself can only make value propositions (defined as a collection of benefits that is promised to the customer in return for payment) and coordinate the compilation of resources for the customer (Ballantyne and Aitken 2007. and (4) postdeployment customer support. . Davies. with the salesperson as the linchpin—sensing the customer’s needs. In line with this perspective. segmented. All decisions of the organization are geared toward profit maximization. There has been a move away from order taking to a set of relational processes linking the organization’s procedures to those of the customer. They have to transform most aspects of their business such as their organizational structure and culture as well as operations and interdepartmental collaboration. thus ultimately. integrated solution firms have to focus on the result the customer needs and work backward to identify the combination of products and services that will meet the customer’s requirements (Brady. (3) their deployment. that is. via goods) interaction. Sheth and Sharma 2008). This redefined strategy has fundamental implications for organizations deciding to become integrated solution providers. and Gann 2005. the benefit of integrated solutions lies in the unique combination of products and services that is tailored to meet their business needs. Davies. In line with the development of integrated solutions.426 Journal of Marketing Theory and Practice G-D logic regards the production. all of which are aimed at meeting customers’ business needs” (2007. customers actively assess the value of goods they buy on the basis of the solution and performance they provide in use—meaning that no matter whether they purchase goods or services. p. Liu and Leach 2001. the customer constitutes an operand resource that has to be acted upon to produce an effect (Lusch. Lusch and Vargo 2006). and Hobday 2007). and O’Brien 2007). To operate successfully. Vargo and Lusch 2004. distribution. Kohli. and O’Brien 2007. and managing the customer’s expectations. This outlook not only dramatically alters the perspectives of functions such as marketing or sales but also highlights that S-D logic is inherently relational. and Bharadwaj 2007). and trusted partner seeking to provide solutions for the buyers (Guenzi 2002. In this school of thought. 2006). dynamic resources that have the capability to act upon others. For the customer. Instead.
the concept is neither entirely new nor has it been developed only in conjunction with S-D logic. value is not embedded in a good or service during its production process. Vargo. as the assessment of value is context dependent and varies between individuals. whereas in other publications. Storbacka. it cannot deliver value on its own—instead. their external network. coproduction and co-creation. However. The co-creation of value Although value co-creation is at the heart of S-D logic.” a similar construct has been defined as “the degree to which the customer is involved in producing and delivering the service” (Dabholkar 1990. Lusch. Lusch. Holbrook characterizes customer value as an “interactive relativistic preference experience” (2006.g. and this is already taking place between sales personnel. the importance of conveying value propositions and co-creation of value has not yet been discussed in terms of sales interaction. These two similar constructs. Czepiel 1990. Vargo and Lusch (2004) suggest that the process of dialogue is central to S-D logic.g. or product). Vargo. a wide variety of explanations can be found that differ significantly in meaning (e. Payne. However. but since in S-D logic. most work has so far concentrated on the seller’s perspective of customer coproduction (Bendapudi and Leone 2003). two similarities are generally referred to throughout most definitions: first. but co-creators of value (Gummesson 1998.. customer value is subjectively determined by the customer rather than by the seller. “added value” or “high-value customers”). The construct discussed here is “customer value. according to relevant criteria. value—tangible or intangible. Butz and Goodstein 1996. The main difference between customer participation in production and the concept of co-creation as advocated by S-D logic is that the latter centers on the generation of “value” in an abstract sense and from the customer’s point of view instead of focusing on the benefits for the seller only. p. The salesperson is being asked to understand what the network is able to deliver and will need to engage in two-way communication with suppliers as well as customers to mediate between the actors and co-create value. 484). 212). and how it can be co-created in the interaction with customers.. needs to understand that service is at the heart of all business activities and that goods are only distribution mechanisms. Sheth and Sharma 2008. value is experienced through or intrinsic to the use of a product or service (Woodruff 1997). and Tanniru 2010). Instead. Etgar 2006. value has to be developed/experienced by the buyer (Vargo and Lusch 2008). organizations will develop networks of suppliers that will enable them to offer stronger solutions to customers (Sheth and Sharma 2008). The organization can only make value propositions. there is no single commonly acknowledged definition of the concept. but only the customer can ultimately determine the value of the service in use (Cova and Salle 2008. Value has an interactive component as it is contingent on a relationship between a customer and an offering (service . The S-D logic perspective suggests that sales. which is frequently the primary customer-facing function within the organization. Vargo. Pralahad and Ramaswamy 2000). Lovelock and Young 1979. and customers.” which is at the heart of S-D logic. However. despite having been on the academic agenda for more than three decades. According to S-D logic.g. how it can be conveyed in the form of value propositions. and Frow 2008). Adopting a customer’s perception of solutions as relational processes means that suppliers have to ensure that all departments involved in developing and delivering a value Definition and Types of value The importance of value in S-D logic requires that there is a clear definition of the term. Termed as “customer participation in production” or “coproduction. as it appears frequently in the marketing and general business literature and has several conceptual connotations (e. Lusch. Vargo and Lusch 2004).. and second. The term “value” implies a preference judgment. utilitarian or hedonic benefits—is always co-created through the joint actions of the organization and the customer. as customers appraise the value of an offering in comparison to another. Both notions are central to S-D logic. Sheth and Parvatiyar 1995. The literature on both integrated solutions and S-D logic support the notion of customers not being mere consumers anymore. Salespeople have to conceptualize what value means to the customer. In service-dominated cultures. Zeithaml 1988). such as in terms of attitude or opinion.Fall 2011 427 build competitive advantage (Cova and Salle 2008. and Tanniru 2010. Vargo and Lusch 2004). Furthermore. customer value is relativistic in several ways: it is comparative. are consolidated in S-D logic in that value co-creation is a higher-ranking construct comprising both the co‑creation of value and coproduction as subcategories (Ballantyne and Varey 2008. p. and O’Brien 2007). some scholars researching customer value and value co-creation avoid offering an interpretation of the value construct altogether (e.g. and has been researched since the late 1970s (e. However. as well as situational and personal..
and it is totally individual to that salesperson (Ballantyne and Varey 2008).. and understanding of the customer and his or her values. Case studies can be described as a “research strategy or design that is used to study one or more selected social phenomena and to understand or explain the phenomena by placing them in their wider context” (Kitay and Callus 1998. thereby reducing internal misunderstandings. thus reducing risk (Pelham 2006). Millman and Wilson 1999).g. solution are intertwined and work together closely. The initial director-level dialogue established that the marketing and sales director exhibited attitudes consistent with S-D logic. and Gann 2005. Internally. The subject company is a UK-headquartered construction firm active in the United Kingdom and the United States. and include these as design features as important as those goods and services provided directly by the firm (FP6). 2002). Brady. These went beyond integrated goods-service solutions in his emphasis on the unique and phenomenological nature of value required by customers (FP10). In other words. wants. Davies. Le MeunierFitzHugh and Piercy 2006). The case was assessed as appropriate on the basis that the organization exhibited aspects of multiple and dynamic marketing practices and had been attempting a transition from G-D to S-D logic. Salespeople have to use their knowledge to make decisions in unpredictable situations (Foote et al. and Jensen 2000). This enables them to provide solutions that cut across the organization’s functional areas (Homburg. and Hobday 2007. conveying value. S-D logic goes beyond offering integrated solutions as it implies that value is co-created with the customer rather than delivering service/product bundles designed by the organization. 103). Knowledge is contextual and embedded in the organization’s systems and therefore a specific asset (Glazer 1991). the role of operational sales in an organization adopting S-D logic has not yet been researched and therefore an exploratory case study approach was selected to consider the constructs. The use of a single case is justified when the case is critical to the testing of theory. It also reflected aspects of both G-D and S-D logic (Lusch and Vargo 2006). Salespeople can offer more attractive value propositions based on their unique understanding of the customer and the organization. Davies. while traditional sales and marketing theory has focused on the storage and dissemination of market intelligence for the sales force (e.428 Journal of Marketing Theory and Practice have the capacity to clarify the internal view of customers’ needs. level of expertise. The subject organization was selected because it offered a rare opportunity to study an organization undergoing substantial change with respect to its marketing and customer-facing practices. To our knowledge. ReseaRcH aPPRoacH Implications of service-Dominant Logic for sales Throughout the literature review we identified that there are a number of ways in which S-D logic affects day-to-day sales activities. However. Salespeople This research considers the implications of the adoption of S-D logic and integrated solutions for sales personnel through a single case study design. and can generate critical knowledge to underpin innovation and product solutions. However. and requirements in the product and service offer. Workman. and Bharadwaj 2007). Tuli. Piercy and Lane (2005) suggest that superior performance is based on the ability of organizations to provide a totally integrated offer that focuses on the factors that matter most to their customers’ needs. mechanisms to coordinate the individual functions have to be established (Brady. or if it provides access to data that would otherwise not be obtainable (Yin 2003). Piercy and Lane (2005) indicate that the main challenge to managers is to leverage the salesperson’s knowledge of the customer’s needs to create competitive advantage. p. Kohli. the interaction between the salesperson and the customer should uncover the value desired and value-in-use by the customer as well as the potential for co-creation of value. and delivering solutions are the core of sales activities. There are links between S-D logic and integrated solutions in that customer orientation. The knowledge held by the salesperson is dependent on his or her experience. the move of the customer to center stage as the co-creator of value means that market intelligence is becoming knowledge management that is located in the individual salesperson as opposed to the organization (Vargo and Lusch 2004). marketing has knowledge of planned product introductions and other information necessary to customize the company’s product service package. and the need for the firm to include complementary resource providers in the design . This changes the role of salespeople in that they have to focus on service provision and will influence the conceptual development discussed later in this work. as these activities are essential in delivering outcomes. but sales and service personnel have the accrued local knowledge necessary to know what specific customers value in each area of supply-chain activity (Cespedes 1994. the need to uncover the customer’s intended usage processes. specifically its house-building subsidiary.
and roofer are still required on the building site. Kohli. The house-building industry in the United Kingdom still adheres to traditional bricksand-mortar-based construction rather than factory-made units that are assembled on site. Finally. dialogue and learning Building trust and long‑lasting relationships Building trust and long‑lasting relationships Source: Adapted from Lusch and Vargo (2006). The activities required by integrated solutions were drawn from Tuli. but only offer value propositions. salespeople would concentrate on features and benefits of the products/services offered. Therefore. These are behaviors that the organization needs to take on board to . the agreement and cooperation of senior management was forthcoming. Also. sales literature. Therefore. The key constructs applied to analyze the data are in Table 2. but we believe that sales personnel should be able to negotiate with actors inside and outside the organization and therefore FP9 would be significant. FP7: The enterprise cannot deliver value. The elements of S-D logic relevant to sales as identified by Sheth and Sharma (2008) were augmented by three additional fundamental premises (FPs) outlined by Vargo and Lusch (2008). Two members of the research team also made several visits to various construction sites over a period of several months. Previously. process (FP9). plasterer. All the interviews lasted between 30 and 60 minutes and were tape-recorded and transcribed for analysis (see the Appendix for the interview guide). the construction industry in the United Kingdom may be considered to be conservative. FP7 should be added because communication of value is one of the critical activities in which salespeople engage. FP9: all social and economic actors are resource integrators. and Bharadwaj (2007). but with the development of S-D logic they need to be aware that they are focusing on value as perceived by the customer. FP9 and FP10 were not available for consideration by Sheth and Sharma (2008). press advertisements. The case was analyzed using NVivo. FP10 also affects sales activities. customer and internal knowledge Conveying value propositions Intermediary Intermediary Conversation. and the company’s Web site. customer and internal knowledge Conveying value propositions Co‑creation of solutions Co‑creation of solutions Leveraging marketing. which in this organization corresponds broadly to the department under the group sales and marketing director. a number of different traditional skills such as bricklayer. Data were gathered by means of nine semistructured. The research focused on the sales and marketing functions. successful sales personnel are uniquely positioned to determine how the beneficiary interprets value and has to be able to feed this back to the organization.Fall 2011 429 Table 2 Concepts and Their Transition Goods‑Dominant Logic Concepts Goods Products Feature/Attribute Value‑Added Profit Maximization Price Equilibrium systems Supply chain Promotion To market Product orientation Transitional Concepts Services Offerings Benefit Coproduction Financial engineering Value delivery Dynamic systems Value‑chain Integrated marketing communications Market to Market orientation Service‑Dominant Logic Concepts Service Experiences Solution Co‑creation of value Financial feedback/learning Value proposition Complex adaptive systems Value‑creation network/ constellation Dialogue Market with Service orientation Implication for Sales Activities Leveraging market. and FP10: value is always uniquely and phenomenologically determined by the beneficiary. face-to-face interviews (a range from the group sales and marketing director to the regional salesperson) and a review of company documents such as presentations. The conceptual framework (see Figure 1) considers the impact of S-D logic and integrated solutions on the organization. As a result. The main aim of the interviews was to explore how far S-D logic has been adopted by the organization and how this has affected its sales function.
Stafford 1996) and through the qualitative data analysis. To this end. conveying value propositions. and internal knowledge. Brent and Rogers 2007. From these sources we identified six activities that underpin the sales role as influenced by S-D logic and integrated solutions. The company has a stated aim to embrace S-D logic and put the customer at the center of its focus. Note: The FPs in boldface are those that were not identified as relating to sales in previous studies. intermediary between sup- pliers. It was observed that their new promotions emphasized value-in-use attributes . organization. ranging from homes for first-time buyers to executive homes. the company has employed a new group sales and marketing director to realize this strategic focus and drive new operational activities. leveraging customer. case sTuDy—neW HoMe DeveLoPeR The subject company specializes in building new development houses. The key sales activities required for the conceptual framework were identified from the existing literature on sales (e.430 Journal of Marketing Theory and Practice Figure 1 conceptual Framework Source: Adapted from Tuli. ensure that it is both offering solutions to the customers and adding value through its transactions.g. These key activities are: conversation. dialogue. co-creation of solutions. and building trust and long-lasting relationships (see Figure 1). It was clear from the interviews that the group sales and marketing director’s approach was visionary and forward-thinking. Hodge and Schachter 2006. market.. We then consider the activities that salespeople need to undertake to ensure that they are contributing to the value offered through this organizational change by adapting their activities to fit with the new organizational paradigm. and Bharadwaj (2007) and Vargo and Lusch (2008). Kohli. and customers. and learning.
We’re all of the opinion that that should be the way we should be moving forward. There was a plan to turn the sales suite into a community center for the development at the end of its life so that the relationship between the buyer and the organization and the . expensive. to after-sales service. The selling process consists of properties being sold on site to the customers by specialist sales personnel. gives you the chance to personalize your home in terms of carpets. . kitchen facility. Sales and marketing people were aware of this tension. Improve communication within regional businesses. . and a highly emotionally engaging process. That way. curtains. if you like. and engage in co-creation with the customer. . . . which requires the salesperson to be closely involved. The group sales and marketing director saw himself as the prime driver of innovation and change in the way that the company markets and sells its products and had identified the need for the firm to include complementary resource providers in the design process: One of the reasons I got the job was that I could paint a vision of what this could be like. particularly in terms of the performance measures that applied. so it moves on right up to purchase and beyond into sustainable. and this was supported by sales and marketing personnel who were interviewed for this research. and which surfaced in differences in attitudes between the sales and marketing team and the operations director and his contractors. The marketing manager explained: We came up with a logical plan on how we communicate with them [the customers]. Plan better. . Know. “Inspired by You!” The aim of the presentations was to move all staff from their current perspective on sales and marketing to their new paradigm so that they could deliver the customer dream. which resulted in more and better-quality customer contacts. profitable relationships. bathroom door handles. This would involve giving choices on each floor as to where the walls go. In this way. the organization can provide a framework to the dialogue that takes place between the sales personnel and the customer. discussion groups. In order to meet this need. (Group Sales and Marketing Director) The organization rolled out the new philosophy through a series of staff conferences. and all that good stuff. but were enthusiastic about embracing the new consumer focus. This journey was described by the group sales and marketing director in his presentation as Stranger. Friend. The aim is to enhance and accelerate the customer journey toward purchase of the configuration that provides the greatest value to the customer. Further down the journey we can communicate more intimately . Each functional area had separate workshops to discuss the practical implications of the new philosophy. and workshops. allowing them to interact. Deliver customer journey in line with research find‑ ings so that there are no surprises and we can build rapport! Customer-facing sales personnel were enthusiastic about the new marketing initiatives. The group sales and marketing director had been successful in sharing this vision with his colleagues. the company has developed the concept of the “customer journey” from the customer’s initial contact with the organization through occupation of the property. .Fall 2011 431 such as warmth and community rather than embeddedvalue attributes such as house features. (Regional Sales and Marketing Director) At the same time. light switches. Acquain‑ tance. The message from the presentation to the sales personnel was Look through eyes of customer. and that sales staff were encouraged to hold conversations that uncovered and structured the customers’ intended usage processes. convey value. a consistent theme that emerged from the analysis was the discomfort and tension that arose from the contrast between G-D and S-D logic in practice. The new group sales and marketing director gave a series of presentations where his main message was To share our customers’ passion and to work with them to create and deliver with pride the home they want. which is known as the customer journey. because it’s what the customer wants. . There is recognition of the need to manage expectations not just in terms of communications with potential purchasers but also in the role of word of mouth and local opinion within the wider community. The marketing director explained that it was about offering consumers a life style and said: We’re looking at what we’re calling internally flexible living. individual. Put simply. (Marketing Executive) [The group sales and marketing director] and his team are using a different approach to other house builders from a communications point of view. the property is co-created between the two parties and concepts of value are discussed and refined during the process. Like. The journey is undertaken by the customer and the salesperson together so that there is open negotiation and decisions are based on previous discussions. Buying a house is a complex. The Design Centre. Love. This effort is supported by appropriate marketing collateral and knowledge of the processes/time frames available.
We call them the “eleventh-hour” things. and environment). there are often penalties to pay in terms of quality if work is completed primarily against the twin criteria of price and meeting deadlines. (Regional Sales and Marketing Director) In order to manage the capabilities of the organization’s external network. (Regional Salesperson) This gives potential purchasers the opportunity to participate in the design of their intended home and to select furnishings and fittings appropriate to their needs. are not able to ensure that the timing of the completion agreed with the customer is always met or that all their requests are entirely fulfilled: We’re failing to deliver the dream at the moment. There is evidence from the case that the sales personnel. and delivery times. including knowledge management through the customer databases. and even the possibility of building extensions) to extend the relationship into the future. they might want them three months later. (Regional Salesperson) All the salespeople are fully trained in the available options. One insight given by the research was that home buyers make substantial expenditures posthouse purchase on furnishings and other items. the need to meet sales targets means that they may not be able to maximize the customer’s perceived value: in particular.g. often on a subcontract basis. The development of the customer journey (service provision). it is apparent that the organization is in a state of transition. features. and through the take-up of additional services over time. the company records how it can configure its resources to meet customers’ needs and gives a framework to the interaction and value-creating process that takes place between the customer and the sales personnel. typically extending over a period of nine months.. We might sell them a landscaped garden later on. which is implemented in various ways. window cleaning. global ac- . the conversion rate compared to previous periods. and serves as a vehicle for adding further services to the customer. there is pressure to hand over a new house at the earliest possible date. and the use of the Design Centre to provide tailored solutions. standard sales measures. which upsets me greatly. According to the group sales and marketing director. boiler maintenance. promotional activities. customer-facing personnel are provided with training by the company to assist in managing expectations and the adoption of this new role implicated by the realization of S-D logic. listen and respond to their needs and concerns. their costs. co-creation of solutions. In this way. The Design Centre uses a combination of traditional samples and an information technology (IT) package that allows the customer to model their choices and view them in 3D. irrespective of the impact on customer satisfaction while snags are sorted DIscussIon The literature review and the analysis of the case study identified sales activities that are influenced by integrated solutions and S-D logic (see Table 2). systems. thereby aiding the provision of an individually tailored solution instead of a package from a set menu. who outlined a number of possible macroimplications for sales such as an increasingly customer-focused sales force selling solutions. but some members of the senior management team recognize the potential and opportunity that S-D logic offers for the company’s future. as well as being provided with testimonials from previous customers regarding their experiences to help overcome any skepticism and to reduce cognitive dissonance in the purchasing process. The marketing and sales teams demonstrate their understanding of the solution selling concept. Numerous different trades and crafts contribute to the construction of a house. through their organizational structures. We don’t always deliver the product correctly and we don’t always deliver on time. The Design Centre provides a controllable environment for the interface between the customer and sales personnel. This takes our study beyond the work on S-D logic and integrated sales by Sheth and Sharma (2008). Success of the new sales situation is being measured by the company through the employment of mystery shoppers (to review the performance of the sales teams. as well as the management of expectations and networks driven by S-D logic as introduced by the group sales and marketing director have provided a number of new challenges for sales personnel. Currently. Although the salesperson is focused on trying to convey customer value. the next stage in the process would be to offer a range of tertiary services (e. In order to meet this need. These people here are being sold some extra design services. The Design Centre allows the sales personnel to use their specialized knowledge to facilitate the exchange and adapt the offer. A picture emerges of an organization that has already embraced integrated solutions. the company has developed the Design Centre: The use of the Design Centre provided us with a unique opportunity to talk to the customers. customer’s overall value experience can be extended into the postpurchase phase.432 Journal of Marketing Theory and Practice out. While this might be cost-efficient.
. This is exemplified by the case data in that sales personnel are encouraged to investigate the use to which prospective customers wish to put their houses and to co-create both design and service features that will enable the customer’s objectives to be met. The UK building industry has traditionally been one where properties are built to a preordained specification and then sold to the customers (G-D logic). However. and are now experts in creating a dialogue with their customers to elicit what they consider to be of value. It also identifies three other FPs in addition to those emphasized in Sheth and Sharma (2008) that drive changes in sales processes. This study highlights how S-D logic is affecting sales operations on a microlevel and the skills needed at the customer interface. The customer journey aids to define the distinction between the responsibilities of the marketing and sales teams. the development of S-D logic requires a change of emphasis from knowledge of product-based features. and Hutson 1992). Leveraging Market. These changes resulted in six specific sales activities being observed in the target organization that demonstrate how sales personnel are evolving from G-D logic to S-D logic.Fall 2011 433 count management. Schwepker. The information from this interaction with the customer is then fed back through the marketing director to assist with formulating new offers. However. the customer. as conveying value Propositions Satisfaction may have been previously regarded as a desirable outcome. This process builds on FP6 in that “the customer is always a cocreator of value” (Vargo and Lusch 2008). but increasingly customers see it as a minimum requirement and have elevated expectations (Ingram. value-in-use arises not just from the firm’s processes but also from the customer’s interaction and usage processes (Payne. customer. sales selection. conversation. together with more fundamental options such as house layout and design. internal marketing. helps the sales personnel and customers to explore preferences and identify benefits based on the sales personnel’s knowledge of markets. and Lane 2007). and rewards. In an overcrowded market. Driven by his vision and through adopting S-D logic. the organization decided to change its approach and employed the group sales and marketing director to achieve this. Leveraging customer and marketing knowledge has always been central to sales activities. and the capacity of the organization. The case data demonstrates that the marketing team is effective in communicating their aims and ambitions to the sales team who responds positively to the initiatives and provides feedback from the market and customers that help to alter the perceptions of the market and build new initiatives. As the sales manager said. The Design Centre provides a suitable environment where the sales personnel can offer a range of choices and services that assists in both revealing customer preferences and managing their expectations. the salesperson is required to have the ability to quickly and insightfully elicit the customers’ priorities and create learning (Kalaignanam and Varadarajan 2006. The case study highlighted that sales personnel have refined this skill through training and experience. The Design Centre provides the venue for dialogic interaction and assists the sales personnel in conveying a vision of what can be achieved. new homes) are a distribution mechanism for service provision. This activity also relates to FP3. Storbacka. where customers are unclear of their needs (Peppers and Rogers 1997) and even unwilling to invest time to reveal them (Rust and Thompson 2006). and Frow 2008). This process puts the customers at ease and provides a service that is valued by them (according to the sales personnel). The adoption of integrated solutions has emphasized the importance of problem identification and exploration with customers. The provision of examples and samples. benefits. Dialogue. and this has resulted in sales personnel having a more interactive relationship with their customers. this organization has found competitive advantage by becoming more customer oriented and offering mechanisms for co-creation of value. to the management of sales personnel knowledge to create competitive advantage with the customer (FP4). and solutions. Sales personnel need new skills (Piercy and Lane 2005) in order to manage expectations to the point of service delivery (Shepherd 1999). and Internal Knowledge The traditional problem/solution approach is relevant only if there is a mutual understanding of the nature of the problem or need. They sold nicer boxes than the competition. They are then able to use this skill to leverage their industry knowledge to derive information on the nature of the consumer’s needs. and Learning The product/service offering or solution is traditionally the subject of demand stimulation. as goods (in this case. Piercy. Cravens. but they were still boxes.
First. The sales personnel have had some training to recognize the value that customers place on the services offered and how this value can be communicated. including postpurchase servicing. Salespeople have to be aware that the actual value is determined by the customer (FP10). but only offer value propositions (FP7). Sales personnel can use their unique relationship-building skills to demonstrate empathy and responsiveness to the customers’ needs throughout their journey. Therefore. technology enablement may offer a number of advantages by being more engaging for customers and allowing the outsourcing of option selection and presenting such options in a persuasive manner. Homburg. In the case study. Davies. In the present case. The implication for sales is that they need to be able to understand the value of the offer as it is perceived by the customer and then be able to adjust it in reaction to customers’ feedback. equally importantly. gaining the sale is now part of the sales process rather than its conclusion. Customers’ perception of value may. as an integrative logic applies as each marketing tactic responds to an element of the customer journey against which it can be validated and in some cases the effectiveness measured. Vargo and Lusch (2004) identify that the enterprise cannot deliver value. However. This activity is developed from FP9 and goes beyond integrated solutions. that the solution to the unique value-in-use sought by the customer must include not just the firm’s goods and services but. to successfully co-create solutions they may have to cut across the organization’s functional areas (Brady. In order to monitor the sales process. Davies. as the actual value of a good/service is experienced phenomenologically and determined by the customer when the offer is put into use (FP10). It is probably the area that requires the most development of new skills in the sales team. Spekman. be influenced by the firm’s activities and relies on sales personnel acting as the communicator of the value proposition (Kalaignanam and Varadarajan 2006). Second. and customers Sales has long been the interface between the customer and the organization. to co-creation of solutions and the extended relationship. the organization has introduced the concept of the “customer journey” in which the salesperson may travel along with the customer. the design of the customer’s usage processes themselves. Although sales personnel are at the interface with customers. Brown and Bitner (2006) discuss the role of customer involvement and the opportunities for self-service technology. the location should be managed so that the quality of interaction and engagement is optimal and Intermediary Between suppliers. a judgment has to be made concerning the limits to choice imposed as customers are potentially overwhelmed by excessive choice (Schwartz 2004) or are unwilling to engage in extensive discussion (Woodruff and Flint 2006). from the initial contact. the customer journey framework provides the means by which the needs of customers can be understood by the sales team and conveyed to marketing and the rest of the organization. These services are provided in a way that is appreciated by the customers through the Design Centre and its interactive IT modeling system. co-creation of solutions The process of co-creation is dependent on meaningful and mutual engagement (Prahalad and Ramaswamy 2004). Matsuo 2006. Workman. Sales personnel need to be capable of appropriately revealing preferences in this respect. moderating company performance against customer expectations. their skills and attitudes to customers. this will increasingly involve coordination across the organization and through the supply chain (Gummesson 2000. The concept of co-creation of solutions is probably one of the areas where S-D logic has most strongly affected sales activities. Spear. and Hobday 2007. as illustrated by the Design Centre. balancing demands against resources and capabilities. Brady. . service is the fundamental basis of exchange (FP1) and is provided through the salespeople. With S-D logic. The competitive advantage of this process lies in the provision of service that is valuable to the customer. therefore. however. We observe. through the sales process. and Kamauff 2002). which forms part of the organization’s competitive advantage (FP4). this was illustrated through the adoption of the IT modeling system.434 Journal of Marketing Theory and Practice supported by appropriate resources. This concept provides a framework and set of criteria by which marketing decisions can be made. This has two main implications. Within the case study. and Gann 2005. organization. the sales personnel are heavily involved in the solution-provision process through customization of the offer and managing the integration of the organization’s activities. customer value is communicated not only through the Design Centre in terms of the level of quality of the environment and the range of additional services available to the customer but also through the knowledge and understanding of sales personnel in interpreting value with the customer. These skills are attested through the sales personnel’s understanding of value. hence. In addition.
This aspect. strategic outlook. in this case. but not sufficient. Sales personnel are taking a more proactive role in trying to coordinate the different activities to ensure that the customer’s expectations are met within a specific time frame. Sales personnel can then use their skills of relationship-building and customer-sensing to engage with customers in a long-term relationship. although outside the scope of sales. in some cases. product specificity can moderate the relationship between S-D logic adoption and outcomes such as customer experience. quality. facilitating communication between the internal and external networks and focusing on providing the service level demanded by the customer. To be successful. In the case study. the difficulties of meeting customers’ needs are highlighted as the organization struggles to meet the delivery times agreed with individual customers. absolutely. and poor relationships may tarnish the company’s image. or recommend the company to their relatives and friends. It is noted that the necessary minimum levels of quality and service increase with the scope of the network involved and. Within the case presented. However. If all parts of the company are customer oriented. such as landscaping. each actor in the network is measured against different criteria. First. It may be argued that relationship marketing is a necessary. However. has implications for their interaction with the customer and delivery of solutions. sales personnel must be able to rely. S-D logic and integrated solutions demand that internal as well as external networks are required to operate in concert to provide the best solution for the customer. In particular. after the house sale. the development of strong customer satisfaction and loyalty depends on the service that customers receive from organizations and their suppliers (Doyle 1995). the organization was faced with single individual sales rather than an ongoing relationship with customers. and operations. Further. In the case study. Both paradigms have the potential to fundamentally change an organization’s overall identity. on service delivery and on the consistency of the network.Fall 2011 435 and Jensen 2000) and. sales personnel are engaging with a larger network than previously when they simply took the order and moved on to the next customer. liaise with the network of outsourced functions to obtain the optimum solution through integration of multiple resources. depending on whether the organization is selling commodities or specifically designed goods/services. the marketing personnel are able to extend the sales relationship with the customer through their additional service offers and being customer oriented rather than product oriented (FP8). This moves sales personnel to a strategic position. new extensions. This concept is closely aligned with FP8: A service-centered view is inherently customer oriented and relational. of the customer relationship is determined by how well it is managed. and profitability. This extension of the customer relationship from a single purchase to a long-lasting bond relies on the organization being able to meet all their needs and deliver the solutions packages agreed with sales personnel on time. condition for S-D logic in marketing (Gummesson 2006). There is considerable support for the concept of salespeople working across internal boundaries. The quality . concLusIon anD ManageRIaL IMPLIcaTIons The concepts of S-D logic and integrated solutions share an innovative all-encompassing nature and the requirement to be embraced by the organization as a whole rather than of individual departments alone. the requirement to deliver against minimal cost or short-term profit criteria and the absence of other. To mitigate this. Further. The Design Centre and customer journey further provide a suitable environment that helped establish the credibility of the sales personnel in order to build trust and long-lasting relationships with their customer. there is evidence in the case to indicate that satisfied customers frequently return to purchase larger properties as their family expands. there are some factors that were observed from the case that may be antecedent to S-D logic adoption. suitable and recognized S-D logic criteria make it difficult to sustain the case for innovation and change. the company developed the customer journey and future profit pools through offering further services. specifically the literature on relationship marketing. However. How the customer relationship is handled by the organization’s representatives is critical to how they are perceived by the customers. the organization offers individual homes within parameters specified by the resources of the firm Building Trust and Long-Lasting Relationships Building trust and long-lasting relationships is an area that has been extensively explored in the existing sales literature. In our case study. it follows that there is a duty for sales personnel to understand the advantages and limitations provided by the network and take some responsibility for the configuration of the solution. or building community facilities. Piercy and Lane (2005) highlight the need for a seamless internal system to provide superior value to the customer.
or in a B2B environment by using portable IT systems to engage with the customer. this was demonstrated by the forward-thinking attitude of the group sales and marketing director. through developing listening skills. Where competition is increasing. developing value propositions. It is driven by the belief that S-D logic adoption is associated with enhanced customer experience. and profitability. as they can no longer simply offer a product/ service bundle. They have established a focus on service provision that is supported by the ability to create dialogue and learning to explore problems with customers. to using their knowledge in dialogue. This has profound implications for salespeople. . whether employed directly by the organization or not. This training can help to move salespeople from transactional selling to S-D logic. which makes experienced salespeople essential assets to the organization. organizations have to make choices about their offer and quality and value propositions to target their market segments accordingly. diagnostic capabilities.436 Journal of Marketing Theory and Practice The case study demonstrates that S-D logic has influenced the sales function by moving the customer center stage. but the recent move toward S-D logic suggests that certain sales activities have to be developed or enhanced to meet the new paradigm. This leads to the other area in the study—the clarification of the concept of value and the value network with reference to sales activities. thus offering superior quality. it is proposed that in an organization adopting S-D logic. workshops. This could apply to reconfiguring showrooms. aligning sales practices with S-D logic requires changes in leadership behaviors. Third. understanding the nature of the value that is being proposed. offer quality. the sales process needs to elicit needs at both embedded-value and value-in-use levels. Value is not only individually determined by the customer but also context dependent and relative to other experiences made by the purchaser. In this instance. and goods/service customization options. competitive intensity can influence the relationship between S-D logic adoption and results such as customer experience. enabling the company to charge premium prices and offer enhanced service. but have to deliver a complete service package that makes the offer more valuable to the customer. the more extensive networking role was not fully developed by this organization and more needs to be done to assist the operations director to appreciate the value of the new paradigm and liaise more effectively with the sales team on the delivery of “the dream. The case study investigates a company that is moving from G-D to S-D logic in its provision of new housing in the United Kingdom. Sales staff require specific training on the importance of conveying value propositions and the co-creation of solutions that are essential for all customerfacing personnel. and acting as intermediaries between the network and customers. and co-creating value through service provision. the organization’s offer was not just customized according to the resources available within the company. Sales effectiveness was measured by methods such as mystery shopping. but with the customer’s intended usage processes in mind and included external suppliers and networks. The key sales activities that have been affected are as follows: developing an understanding of value. quality. the studied organization decided to move toward S-D logic to attain competitive advantage by focusing all its activities on the customer’s phenomenological service experience. and move into co-creation. retail spaces. Second. and problem solving. Furthermore. and engaging in the co-creation of solutions.” The delivery of customer satisfaction through the development of new sales processes based on S-D logic will be primarily achieved through the dual application of senior management support and cross-functional training. Organizations in other industries should consider their selling environments in terms of how they facilitate engagement with the customer. acting as a network intermediary. The organization was already engaged in the provision of integrated solutions. sales personnel have a more strategic role in managing knowledge and the customer. sales effectiveness metrics. Therefore. co-creating solutions with customers. and firm profitability. The and its network as well as the customer’s needs. which allows the evaluation of the service experience from the customer’s point of view. explore needs with the assistance of the IT modeling packages. Sales personnel have become knowledge managers who work with the customer to achieve the creation of tailored solutions in an interactive environment. In the case study. the Design Centre provides a suitable environment and allows the salesperson to make the value propositions. presentations. The purpose of this work was to investigate how S-D logic thinking is moving sales toward a service focus where goods are seen as secondary to the provision of services and to explore how sales activities have been influenced through an organization adopting S-D logic. This requires greater understanding of the customer and their processes so that the desired value can be offered in a way that becomes an enjoyable part of the experience. However. and the additional training for sales personnel intended to get all the staff to commit to this new vision. As the UK home-building market is highly competitive. As a result of S-D logic.
both of these concepts raise a number of yet unanswered questions and therefore this framework (see Figure 1) may be used as a basis for further research. transforms the whole organization. further exploration is needed to confirm this finding and investigate how these changes can be realized in other industries. David. Neeli. “The Service-Dominant Logic and the Future of Marketing. The case study indicates that the development of the process (the customer journey. 363–371. or other parties that require integration in order to achieve value-in-use. the implementation of S-D logic and integrated solutions cannot be successfully realized without considering and addressing the consequences for sales personnel in practice. and customization options (and provided examples of how these elements were implemented). This will help sales staff to have confidence in making adjustments in response to the customer’s input. Bendapudi. it is believed that this case offers insights into an organization that is in the process of adopting S-D logic while utilizing integrated solutions as a way of developing substantial value propositions. Leone (2003). the sales personnel need to understand how the new home is likely to be used by the customer.” Journal of the Academy of Marketing Science. 11–14. and Robert Aitken (2007). It is proposed that in an organization adopting S-D logic. Therefore. The final part of the study was to explore the importance of the co-creation of solutions by sales personnel with the customer. and therefore future research should explore how the strategic roles and operational activities of other functions are influenced when an organization fully embraces S-D logic. Varey (2008). for example. In other words. 26 (1). or they may value an office/study or more storage. sales effectiveness metrics.Fall 2011 437 customer then moves on with the journey with the salesperson to co-create solutions. and Richard J. product specificity and competitive intensity— require confirmation and their effects need further in-depth investigation. this study only considers the impact of S-D logic on the sales function and leaves out all other organizational departments. research is exploratory in nature. 275–281. and the use of a single case study reduces its generalizability. they may need extra facilities to accommodate frequent visitors. First. and John Williams (2006). quantitative work should refine and further elaborate the concept once it has been more widely adopted in practice and theory has matured. Salespeople may also need flexibility in what they can offer to the customer so that they can adjust to each individual’s needs. although the qualitative research design is appropriate for the nascent state of theory surrounding S-D logic. “Psychological Implications of Customer Participation in Co-Production. Ballantyne. In addition. Phil Osborne. although the case study demonstrated that aligning sales practices with S-D logic requires changes in leadership behaviors. LIMITaTIons anD FuTuRe ReseaRcH This work has a number of limitations that should be offset by future research into the sales and S-D logic. and sales personnel have to be trained to pass on and manage this customer information to ensure the continuous adjustment of the organization’s offer. the proposed antecedents to the adoption of S-D logic that have been observed in this case study—in particular. 67 (January). Similarly. The emphasis is on a process to deliver value that is appreciated by the customer. this . Future research should explore further how the sales activities identified here could be developed to help sales personnel respond to the continuously changing needs of the customer and S-D logic. but a school of thought that. Furthermore. other customers. However.” Journal of Marketing. 14–28. This study provides initial insight into these implications and offers a framework to guide further study. 22 (6). Organizations need to develop a clear process that assists the sales personnel in “accompanying” the customer through their journey toward a long-lasting relationship. Robert. and Robert P. once implemented. in this case) was a strong first step in creating the conditions for co-creation as required by S-D logic. David Ballantyne. in an organization adopting S-D logic. Second. the sales process needs to identify not just goods and service attributes but also attributes of the customer’s usage processes and values. 6 (3).” Journal of Business & Industrial Marketing. in the future. “Introduction to the Special Issue on the ServiceDominant Logic of Marketing: Insights from the Otago Forum. However. the real-life consequences of S-D logic should also be investigated to assess its practical value for organizations. S-D logic is not just a marketing or sales construct. However. This may be facilitated through the employment of interactive IT packages and communications. ReFeRences Aitken. “Branding in B2B Markets: Insights from the Service-Dominant Logic of Marketing. Co-creation requires a feedback mechanism in terms of product development and marketing. ———. At this point. It is suggested that as the sales function usually is the primary customer interface. the coproduced solution resulting from the sales process needs to include specification of any resources provided by other suppliers.” Market Theory.
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440 Journal of Marketing Theory and Practice aPPenDIX Interview guide Marketing Practice Within the Firm The purpose of this section is to explore the firm’s current marketing and sales practices. Operational buy-in c. Duration of exchange e. Why is this transition happening? What are the drivers of change? a. Managerial intent g. Executive team changes 3. 1. Managerial focus h. 3. What factors are enabling or hindering the transition? a. How would you characterize marketing practice within this firm? a. Alignment with reward systems d. 2. Transitions Between archetypes The purpose of this section is to explore any transitions in marketing and sales practice that have occurred. why? If another archetype is in evidence. why?) 5. Type of contact d. Managerial investment i. supply planning . Nature of communication c. Top team buy-in b.g. Long-term commitment. What does marketing mean in your firm? What is its purpose? Who in the organizational structure has marketing or sales roles? What’s involved in your job? What do other marketing people actually do? Why is marketing practiced the way it is in this company? (e. if it exhibits strong characteristics of an archetype.. Market maturity b. 4. Managerial level 1. Has the current archetype combination changed recently? Is it changing at present? 2. Development of metrics appropriate to archetype e. Formality in exchange f. Constraints on volume growth c. Purpose of exchange b.
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