Applied marketing theory

Value capture

• The ability to retain a portion of the value created for customers as profit •The ability to communicate value effectively •Accurate pricing, so that price reflects the value provided to customers

Examples of pricing strategies:

- Skimming Skimming means pricing high and taking a sizable profit margin. - Penetration Penetration means pricing as low as possible, primarily to keep potential competitors out of the market and to quickly take market shares.

Methods for assessing customer value

1. Assessment by the engineers of the producing company: In this method, the engineers of the producing company assess the value of the product by testing the prototype. They evaluate the product's features, quality, and functionality to determine its value to customers. 2. Benchmarking Benchmarking is a process where a company compares its product with similar products offered by competitors. This helps in identifying the strengths and weaknesses of the product and helps the company to improve its product's value 3. User studies •Surveys •Interviews •Focus-groups In addition to these methods, companies can also use economic value calculations that build on market research and product data to determine the economic value of their products to customers. This involves analyzing the product's features, benefits, and costs to customers and comparing it with the competition. →Economic Value Calculations build on market research and product data

evolution of ecosystems (4. Can your organization adapt?)

1. Birth, disruptive the market. In this stage, a new ecosystem emerges and disrupts the existing market. New products or services are introduced that offer significant advantages over existing solutions, and customers begin to adopt them in large numbers. i.e. uber 2. Expansion: lock the customers. In this stage, the ecosystem expands rapidly, and companies work to lock in customers and establish dominance. Standards are established, and customers become invested in the ecosystem, making it difficult for new entrants to compete. 3. Leadership, when you are a market leader you need to stay relevant. In this stage, the ecosystem has become the dominant player in the market. However, companies must continue to innovate and stay relevant to maintain their leadership position. This may involve introducing new products or services, improving existing ones, or exploring new markets 4. Selfrenewal, everything changes, Chat GPT can compete with google, uber eat during the pandemic In this stage, the ecosystem begins to decline as new technologies or market forces emerge. Companies must engage in self-renewal to adapt to these changes and remain competitive. If they are unable to do so, the ecosystem may decline and eventually become obsolete.

Strategies for shaping nascent markets. "nascent market" refers to a new or emerging market that is still in its early stages of development and has not yet fully established itself or achieved widespread adoption

1. Claiming the market The first strategy, "Claiming the market," focuses on establishing the new venture as the primary and most recognized player in the nascent market. This strategy operates in the cognitive domain, which means that it aims to shape how people think about the market and its key players. This can be achieved through methods such as adopting templates (e.g., using familiar branding or design elements), signaling leadership (e.g., highlighting the company's expertise or unique advantages), and disseminating stories (e.g., sharing success stories or positive media coverage). 2. Demarcating the market The second strategy, "Demarcating the market," focuses on avoiding competition from more established firms in adjacent markets through alliances. This can be achieved through methods such as revenue-sharing agreements (e.g., sharing profits with complementary firms), equity investments (e.g., investing in firms that could become competitors), and antileader positioning (e.g., positioning the company as an alternative to dominant players in adjacent markets). 3. Controlling the market The third strategy, "Controlling the market," focuses on acquiring direct rivals in the nascent market to create an overlap between the boundaries of the firm and the nascent market. This strategy operates in the resource domain, which means that it aims to shape the company's access to key resources and capabilities. This can be achieved through methods such as eliminating competing models (e.g., acquiring firms with similar products or services), increasing coverage (e.g., expanding the company's geographic reach), and blocking entry (e.g., using patents or other legal mechanisms to prevent competitors from entering the market).

Types of Ethics

1. Consequence ethics The alternative is worse (net positive) Cost-benefit analysis. This type of ethics is focused on the outcome or consequences of an action. It holds that the morality of an action is determined by its ability to produce the most good or the least harm for the greatest number of people 2. Duty ethics This type of ethics is focused on the inherent morality of an action, regardless of its consequences. It holds that actions are intrinsically right or wrong based on certain universal principles or duties Empathized in e.g HM and ericsson: Rules create a frame for ethical behavior. Workers right. 3. Virtue ethics Virtue ethics focuses on developing character traits, such as honesty, fairness, and compassion, that lead to ethical behavior rather than simply following rules or maximizing outcomes. Duty ethics relies on universal principles or rules to determine ethical behavior, while virtue ethics focuses on developing virtuous character traits that lead to ethical behavior. We need to agree on a purpose and act towards its fulfillment at all times. For example, a person who has developed the virtue of honesty will tell the truth even in situations where it may be difficult or uncomfortable to do so, because they value honesty as a character trait For example H&M leading the development of effective water use by pursuing "water stewardship".

"3 sources of customer insight" refers to the three different ways that companies can gather information about their customers in order to improve their understanding of their needs, preferences, and behaviors

1. Data analytics Uncovering and responding to changing customer needs in relation to the current offering: This involves gathering information on how customers are using your products or services, what they like and dislike about them, and how their needs and preferences may be changing over time. By analyzing this data, companies can identify opportunities to improve their current offerings and address any pain points that customers may be experiencing. how: Conducting surveys or interviews with current customers to gather feedback on their experiences with the company's products or services Analyzing customer service data, such as call logs or chat transcripts, to identify common pain points or issues that customers are experiencing Monitoring social media channels to see what customers are saying about the company and its offerings 2. Customer dialogues Identifying what customers want but are not getting: This involves understanding what customers are looking for in a product or service but are not finding in the current market. By identifying these unmet needs, companies can develop new products or services that address these gaps and differentiate themselves from competitors. how: Conducting market research to understand the needs and preferences of target customer segments Analyzing data on competitor offerings to identify gaps in the market that the company could potentially fill 3. Ethnographic methods Unraveling ideas for products and services that customers may not even know they need: This involves using customer insights to generate new ideas for products or services that customers may not have considered before. By understanding customer needs and preferences, companies can develop innovative solutions that anticipate future demand and create new market opportunities. Hosting brainstorming sessions with cross-functional teams to generate new product or service ideas based on customer insights and market trends Developing prototypes or minimum viable products (MVPs) to test new ideas with a small group of customers and gather feedback

Markets - stage of development

1. Formation (discovery, new need, or policy initiative) This stage is characterized by the emergence of a new market due to the discovery of a new need, the introduction of a new product or service, or a policy initiative that creates a new opportunity for businesses to enter the market. In this stage, businesses are often focused on establishing a foothold in the market and gaining a competitive advantage. 2. Established stable markets In this stage, the market has matured, and there are established players who have a significant market share. Customers have developed brand loyalties and are more discerning in their purchasing decisions. Businesses in this stage often focus on maintaining their market position, optimizing their operations, and expanding their customer base. 3. Market undergoing major changes (i.e. crises) This stage is characterized by significant disruptions to the market, such as economic recessions, technological disruptions, or policy changes. Businesses in this stage must adapt quickly to these changes to remain competitive. In some cases, the market may experience a decline in demand, and businesses may need to re-evaluate their product offerings or even exit the market altogether. -------- (If the market is under formation, a customer analysis may be irrelevant. What stage is your market in. Negative externalities can also be a reason for changing an existing market. For example a side effect of a drug or environmental impact.)

Categories of value created for buyers:

1. Hedonic (emotional) Hedonic value refers to the emotional benefits that a product or service provides to its buyers. This type of value is often associated with pleasure, enjoyment, or entertainment. For example, a buyer may purchase a luxury car not just for its functionality but also for the emotional satisfaction it provides. 2. Utilitarian ( functional benefits, economic performance) Utilitarian value refers to the functional benefits or economic performance that a product or service provides to its buyers. This type of value is often associated with the product's usefulness or effectiveness. For example, a buyer may purchase a car for its reliability and fuel efficiency, which are utilitarian benefits. 3. Symbolic (self-expression, self-worth) Symbolic value refers to the self-expression or self-worth that a product or service provides to its buyers. This type of value is often associated with the product's symbolism or cultural significance. For example, a buyer may purchase a luxury handbag not just for its functionality but also for the symbolism and status that it represents.

3 types of interdependencies that exist between different parts of an organization: (What role should you play?) - Question ecosystems

1. Pooled interdependencies: In this type of interdependence, different parts of the organization operate independently of one another, but contribute to a common output or outcome. For example, in a hospital, different departments such as radiology and surgery, may operate independently, but all contribute to the common goal of treating patients. 2. Sequential interdependencies: In this type of interdependence, the output of one unit becomes the input of another unit in a sequential order. For example, in a manufacturing plant, the output of one production process becomes the input of the next process, and so on until the final product is produced. 3. Complex interdependencies: In this type of interdependence, multiple units within the organization are mutually dependent on one another, and their inputs and outputs are not easily separated. This type of interdependence is common in organizations where there is a high degree of specialization and coordination is required to produce a complex product or service. For example, in an aerospace company, design, engineering, manufacturing, and testing departments may all be interdependent in the development of a new aircraft.

3 paradigms of customer value research, 1st

1. Positivist paradigm: Value (CPV) as a judgment or evaluation of an experience or interaction with an object of any type (often including trade-off between what customer gives and gets) In this context, "conceptualized" means how value is understood or defined. In the positivist paradigm, value is conceptualized as an objective and measurable aspect of reality The positivist paradigm is based on the idea that there is a single objective reality that can be observed and measured through quantitative methods. Positivist researchers typically collect data through surveys or experiments and analyze the data using statistical techniques to identify patterns and relationships. In the positivist paradigm, value is conceptualized as a judgment or evaluation of a customers experience or interaction with a product or service. This can involve thinking about what the customer gives (such as money or time) and what they get in return. let's say you are considering purchasing a new laptop. In the positivist paradigm, the conceptualization of value would involve thinking about your judgment or evaluation of the laptop based on your experience or interaction with it. You might consider factors such as the price of the laptop, its technical specifications, its design and aesthetics, and your own personal preferences and needs. The value you assign to the laptop might involve a trade-off between what you give (money) and what you get (the laptop's features and benefits).

Calculate price parity

1. Price for value parity = added value of Zeus + price GLM (Benefits (A) - Benefits (B)) - (Cost (A) - Cost (B)) + (Price (B)) 2. lifetime value-in-use price = Price ceiling L2 vecka 2 - ZEUS

3 paradigms of customer value research, 2nd

2. •Reality is constructed by human beings as they engage with the world they are interpreting in which paradigm is past experience, values and background of the customer relevant? BOTH!!!!!! value is conceptualized as a subjective and socially constructed aspect of human experience. This paradigm assumes that reality is shaped by the meanings and interpretations that individuals and groups assign to it, and that these meanings are influenced by cultural and historical factors. The interpretive paradigm is based on the idea that reality is interpreted by human beings in a subjective way. Multiple realities exist Aims to understand the subjective experiences and perceptions of customers in relation to the value they derive from products or services. This means that researchers using the interpretive paradigm are interested in understanding how customers subjectively view and evaluate the value they receive from a product or service. Value is not just based on the rational and cognitive factors such as price, quality, and functionality of a product or service but also on the emotional and social factors such as the customer's feelings, experiences, and social context For example, suppose a customer visits a coffee shop and orders a latte. The customer's experience of value is not just about the taste and quality of the latte but also includes the atmosphere of the coffee shop, the friendliness of the barista, and the convenience of the location. The customer's sense-making of these different elements contributes to their overall experience of value. Interpretive researchers typically collect data through qualitative methods such as interviews, focus groups, or ethnographic observation, and analyze the data through close reading and interpretation. The goal of this approach is to capture the richness and complexity of human experience and to understand how customer value is shaped by cultural, social, and psychological factors.

3 paradigms of customer value research, 3rd Axiom 6

3. Social constructionist paradigm: Rolex can be an example of a socialist constructionist paradigm as society tell you that this piece means that you are rich? In the example of the Rolex watch, both paradigms can be relevant. The interpretative paradigm could be used to understand how an individual's personal values and experiences influence their decision to buy and wear a Rolex. The social constructionist paradigm, on the other hand, could be used to understand how broader cultural factors, such as societal perceptions of luxury and wealth, shape the value and status attributed to owning a Rolex. the social constructionist paradigm bridges the gap between the objective and the subjective perspective. Reality is constructed by human beings as they engage with the world they are interpreting The social constructionist paradigm is based on the idea that social reality is shaped by the interactions between individuals and groups. In the context of customer value research, this paradigm emphasizes the importance of understanding how value is co-created through interactions between customers, firms, and other stakeholders. In the social constructionist paradigm, customer value is viewed as a subjective and socially constructed phenomenon. This means that while individual customers may have their own interpretations of what value means to them, these interpretations are also shaped by the broader social and cultural contexts in which they live. For example, consider the value of a smartphone app. From an individual user's perspective, value may be derived from the app's features and functions. However, this value is also shaped by the broader social and cultural contexts in which the user lives, such as the norms and expectations around technology use in their community. Furthermore, the value of the app is not just determined by the user and the app developer, but also by other actors within the larger ecosystem, such as other users, third-party developers, and even advertisers. Social constructionist researchers typically collect data through a range of qualitative and quantitative methods An example of the social constructionist paradigm in action could be a customer's experience at a restaurant. The customer's perception of value is not just based on the food and service they receive, but also on the interactions they have with other stakeholders in the service ecosystem, such as the server, other customers, and even the restaurant's physical environment.

Market practices

=all activities that contribute to constitute markets (make them real) Market practices are linked through chains of translations that make the outcomes of one practice part of the other practices. •These links rely on various intermediaries - rules & tools, interests, descriptions, methods of measurement, results, measures - that can travel and be employed in other practices. ----- The teacher is likely referring to the idea that market practices are interconnected and influence each other in complex ways. The "chains of translations" refer to the various ways in which information, values, and practices are transmitted between different actors and entities within markets, such as businesses, consumers, regulators, and intermediaries. These links are made possible through a range of intermediaries, such as rules and tools (such as legal frameworks or technological platforms), interests (such as economic incentives or social norms), descriptions (such as marketing messages or product labeling), methods of measurement (such as performance metrics or quality standards), results (such as market outcomes or consumer behavior), and measures (such as prices or ratings). Together, these intermediaries create a web of connections between different market practices, shaping how they function and evolve over time. By understanding these links, teachers and students can gain insights into the complex dynamics of market systems and how they affect society and the economy.

An experience

An experience = A memorable, personal and positively charged reaction

How can you persuade your business customers to pay the premium prices your offerings deserve?

Craft a compelling customer value proposition. To craft compelling customer value propositions: 1. UNDERSTAND CUSTOMERS' BUSINESSES Invest time and effort to understand your cus- tomers' businesses and identify their unique requirements and preferences. 2. SUBSTANTIATE YOUR VALUE CLAIMS "We can save you money!" won't cut it as a customer value proposition. Back up this claim in accessible, persuasive language that describes the differences between your offer- ings and rivals' . And explain how those differences translate into monetary worth for customers. 3. DOCUMENT VALUE DELIVERED Create written accounts of cost savings or added value that existing customers have ac- tually captured by using your offerings. 4. MAKE CUSTOMER VALUE PROPOSITION A CENTRAL BUSINESS SKILL Improve and reward managers' ability to craft compelling customer value propositions.

G-D och S-D

G-D = goods dominated - service and product is different things In the case of a cleaning company, Goods-Dominant logic (G-DL) would still apply, but the "goods" in this case would be the physical cleaning services provided to customers. The company's focus would be on providing high-quality cleaning services that meet the needs and preferences of their customers. Under G-DL, the cleaning services provided by the company would be seen as a tangible product that can be produced, distributed, and sold to customers S-D = Service dominated - indirect and direct service (Digitalization in the middle) service-dominant logic views services as the fundamental basis of all economic exchange. This means that goods are seen as a mechanism for delivering services, rather than the other way around. For example, a car manufacturer might be viewed as providing transportation services to their customers, rather than simply producing a physical product. - In indirect we have a product and a money exchange. ( se bild) fisherman - the service is that they know how to fish, they have some knowledge and expertise. Direct = checking the pulse Indirect = pulse watch

Goods-dominant logic

In goods-dominant logic, services are viewed as intangible goods. This means that services are treated as if they were physical products, and they are understood in terms of the value they provide to the customer. 1. Value creation happens within the firm premises 2. Value is distributed to consumers by embedding it into tangible objects 3. Firm creates value while consumers destroy ('consume') value 4. Value = price (profit for the firm, benefits after costs to the consumer)

Orchestrators ( dimension 3 Not full hierachically control)

In the context of ecosystems and business, an orchestrator refers to a company or organization that plays a central role in coordinating the interactions and relationships among other actors within the ecosystem. An orchestrator may have significant influence over the other actors and may be responsible for setting standards, establishing rules, and shaping the overall direction of the ecosystem. ------ EXAMPLE: Apple is a good example of an orchestrator in the smartphone industry ecosystem. As the leading provider of smartphones, Apple plays a central role in coordinating interactions among other actors in the ecosystem, including app developers, suppliers, and accessory manufacturers. Apple sets standards for the design, functionality, and user experience of its products and services, which have significant influence on other actors in the ecosystem. The company also provides a platform for app developers to distribute and monetize their products, and for accessory manufacturers to develop products that are compatible with Apple's devices. The example of Apple as an orchestrator in the smartphone industry ecosystem is related to the third dimension of ecosystems - not full hierarchically control - because while Apple plays a central role in coordinating interactions among other actors in the ecosystem, it does not have complete hierarchical control over all actors.

How are markets produced?

Innovation/discovery demand (unmet needs) Market creation as a policy tool ( european carbon market, sell you carbon usage) competition (social change) Enrolment (free market, social movement) Values (religious and political value can enter how you organize markets). Values change over time

What are institutions?

Institutions are systems of rules, norms, meanings, symbols, and practices that govern behavior and social order. They are a fundamental aspect of society, providing stability and order by shaping the actions and expectations of individuals and groups. Institutions can take many forms, including formal organizations such as governments, legal systems, and educational institutions, as well as informal social structures such as family systems, cultural norms, and social hierarchies. ------------------------ Any structure of social order and cooperation governing the behavior of a set of individuals. Examples of institutions include governments, legal systems, educational institutions, religious organizations, and economic systems For example: rules, norms, meanings, symbols, practices

Questions, for the paradigm

Positivist Paradigm: What are the most important features of a water bottle for consumers? How much are consumers willing to pay for a water bottle with different features? What is the relationship between price and perceived value of a water bottle? Interpretive Paradigm: What does a water bottle mean to consumers in different contexts (e.g., at home, at the gym, on a hike)? What emotions are associated with using a water bottle? How do cultural and social factors influence the meaning and value of a water bottle for different groups of consumers? How do consumers perceive the environmental impact of different types of water bottles, and how does this affect their value judgments? social constructionist paradigm How do consumers' social identities (such as gender, age, race, and class) influence their perceptions of the value of a water bottle? How do different cultural norms and values shape consumers' expectations and evaluations of a water bottle? How do social interactions and communication (such as word-of-mouth recommendations or online reviews) influence the perceived value of a water bottle? How does the branding and marketing of water bottles construct particular meanings and identities that influence consumers' value judgments? How do broader social, economic, and environmental issues (such as climate change or sustainability) influence consumers' perceptions of the value of different types of water bottles?

Explain SD logic

Service-Dominant (S-D) logic defines the term "service" as the process of applying one's resources (such as skills, knowledge, expertise, time, etc.) to benefit another entity, whether it be an individual or an organization. SDL is a framework that emphasizes the importance of viewing value creation as a collaborative process between the customer and the firm, rather than a transactional exchange. In S-D logic, all entities including organizations, households, and individuals are viewed as resource integrators. This means that they combine their resources such as time, skills, knowledge, and technology with the resources of other entities to create value. This co-creation of value is a collaborative process that involves the exchange of specialized skills and knowledge (services) between parties. According to Service-Dominant (S-D) logic, customers are seen as active participants in value creation, rather than passive recipients of value. Customers contribute to value creation by applying their own specialized resources, such as knowledge, skills, and experience, to co-create value with the service provider. Moreover, service logic recognizes that value is not a one-time transaction, but an ongoing process of relationship building and collaboration between companies and customers. By focusing on the customer as a co-creator of value, companies can better understand and meet the needs of their customers, build long-term relationships with them, and ultimately achieve sustainable business success.

Creating Shared Value (CSV)

Shared value is not social responsibility, philanthropy, or sustainability, but a new way to achieve economic success. The concept of shared value— which focuses on the connections between societal and economic progress—has the power to unleash the next wave of global growth. The authors propose that businesses adopt a new approach of creating shared value (CSV) by integrating social and environmental considerations into their core business strategies. By doing so, companies can create economic value while also addressing societal issues such as poverty, access to healthcare, and environmental degradation. The authors conclude that businesses that embrace CSV will not only contribute to the well-being of society but also benefit from improved brand reputation, increased customer loyalty, and new market opportunities. Moreover, creating shared value is not a one-time initiative, but an ongoing process that requires continuous innovation and collaboration with stakeholders. The article argues that shared value is not about personal values or redistribution, but about improving growing techniques, strengthening local institutions, and innovating through new technologies and management approaches. The fair trade movement, for example, aims to redistribute revenue to poor farmers, but shared value investments can increase farmers' incomes by more than 300% by improving their efficiency, yields, product quality, and sustainability. This leads to a bigger pie of revenue and profits that benefits both farmers and the companies that buy from them - externalities, both positive and negative. Externalities arise when firms create social costs that they do not have to bear, such as pollution. Thus, society must impose taxes, regulations, and penalties so that firms "internalize" these externalities—a belief influencing many gov- ernment policy decisions. Companies are not self-contained; they are dependent on stakeholders surrounding them. Doing good for communities to: 1. Create "win-win" situations 2. Gain legitimacy in the market Critique: Economic and social goals cannot always be reconciled

value co creation by the customer

Sure, here are some more examples of how customers can be active and co-create value: 1. Social media interactions: Many companies actively engage with their customers on social media platforms like Twitter, Facebook, and Instagram. Customers can provide feedback, ask questions, and share their experiences with the company's products or services. Companies can use this feedback to improve their offerings and better meet the needs of their customers. 2. User-generated content: Companies can leverage user-generated content, such as customer reviews and ratings, to enhance their offerings. For example, Amazon relies heavily on customer reviews to promote products on its website. 3. Customization: Many companies offer customizable products and services that allow customers to tailor their offerings to their specific needs 4. Yes, the customer paying for the product or service is a form of value co-creation. When a customer purchases a product or service, they are essentially co-creating value with the company by exchanging their money for something they perceive to be of greater value than the amount they paid. In this sense, the customer is actively participating in the value creation process by making a decision to invest in the product or service based on their perception of its value.

The brand experience model

The Brand Experience Model identifies four components of a brand experience: 1. Sensory experience: This component relates to the impressions on the senses that the brand experience evokes. It refers to the sensory stimuli such as sight, sound, touch, taste, and smell that the brand uses to create a memorable experience for the customer. 2. Affective experience: This component refers to the emotions that the brand experience elicits from the customer. Affective experiences can be positive or negative and can include emotions such as joy, happiness, sadness, anger, or frustration. Affective experience refers to the emotions or feelings that are evoked by the brand experience. Affective experiences can be positive, negative, or neutral. For example, a positive affective experience could be the feeling of excitement and joy when trying on a new outfit at a clothing store. On the other hand, a negative affective experience could be the feeling of frustration and disappointment when a product does not meet expectations. 3. Behavioral experience: This component refers to the physical or bodily experiences that result from the brand experience. For example, if someone tries on a new pair of shoes at a store, the behavioral experience would be the sensation of walking around in the shoes and the physical fit and feel of the shoes on their feet. such as trying on a piece of clothing, tasting a food sample, or test driving a car. 4. Intellectual experience: This component refers to the mental or cognitive experiences that result from the brand experience. It relates to the way the experience stimulates the customer's curiosity, makes them think or learn something new about the brand, product, or service. By

The Pine & Gilmore Experience Model (model 2)

The Pine & Gilmore Experience Model is a framework for understanding the different levels of engagement or participation that individuals can have in an experience. The model suggests that there are four levels of engagement, ranging from low to high: 1. Passive participation: This level of engagement involves simply observing or experiencing an event without actively participating in it. For example, watching a movie or attending a lecture can be considered passive participation. 2. Active participation: This level of engagement involves actively participating in an event. For example, playing a game or participating in a group activity can be considered active participation. 3. Absorption: This refers to the degree to which an individual is fully engaged with an experience and is not easily distracted by external stimuli. When individuals are fully absorbed in an experience, they are completely focused on it and are not aware of what is happening outside of the experience. For example, if someone is reading a book and is so engrossed in the story that they lose track of time and forget about their surroundings, they can be said to be fully absorbed. Absorption = what is happening outside, you are not noticing. 4. Immersion: This refers to the extent to which an individual feels fully immersed in a physical environment. When individuals are fully immersed in an experience, they feel as though they are physically present in the environment and are fully engaged with the sensory aspects of the experience. For example, if someone is playing a video game and feels as though they are actually inside the game world, they can be said to be fully immersed. Furiously scribbling notes while listening to a physics lecture is more immersion than reading a textbook because the experience of being in the lecture hall and listening to the professor can be more engaging and memorable; seeing a film at the theater with an audience, large screen, and stereophonic sound is more immersing than watching the same film on video at home. Esthetic = you can do nothing about the offer, but you are inside a place. Ex. museum. The term "escapist" in the model refers to experiences where the individual has more control over the experience and can actively participate in it. Examples of escapist experiences could include hiring a personal trainer, where the individual has control over the pace and intensity of the workout and can actively participate in achieving their fitness goals.

value cocreation (SD LOGIC)

Value co-creation is the idea that value is not created by one person or organization alone, but rather through collaboration between multiple actors. In the context of a restaurant, for example, the creation of value is not just the responsibility of the restaurant owner or chef. It is also influenced by the customers who dine there, the suppliers who provide the food and other resources, the staff who work at the restaurant, and other stakeholders who may be involved in the process. Value co creation process with a pencil: People using the pencil manufacturing raw material complementors: pencil sharpener

3 perspectives on value as an outcome

Value in use, value in exchange, and value in context are three concepts used in marketing to understand the value of goods and services. 1. Value-in-exchange (G-D) (market price, measured in transaction) This is part of G-D logic 2. Value-in-use Value unfold over time in use as a resource is integrated with other resources. Focus is in the process of use. Let's say you buy a laptop. The laptop itself has certain features and characteristics that you find appealing, such as its processing power, storage capacity, and screen size. However, the value of the laptop doesn't end there. As you use the laptop over time, you integrate it with other resources (e.g., software, internet connectivity) to accomplish tasks. The value of the laptop then unfolds over time as it becomes a part of your daily routine and enables you to do things you couldn't do before. In this way, the value of the laptop is not just determined by its features or characteristics alone, but by how it is used as a resource in conjunction with other resources. 3. Value in context (SD logic) Value-in-context emphasizes that the value of a product or service is always perceived differently by different actors depending on the surrounding social situation and environment. This means that the value of a product or service is always contextual and cannot be understood in isolation. For example, imagine two people buying the same brand of coffee. One person might value the coffee for its taste and aroma, while another might value it for the social status it conveys. These different values are influenced by the individual's context, such as their cultural background, social environment, and personal preferences. Value-in-context also emphasizes that value is actor-specific and asymmetric. This means that the value of a product or service is determined by the beneficiary, rather than the provider. In other words, it is the customer who determines the value of a product or service based on their individual context and needs. This idea is reflected in the S-D Logic, which views value as an outcome that is uniquely and phenomenologically determined by the beneficiary

Value-in-Exchange and Value-in-Use

Value-in-exchange and value-in-use are economic concepts used to understand the value of goods and services in different contexts. Value-in-Exchange refers to the economic value that a product or service can be exchanged for in the market. It is the price that a buyer is willing to pay for a product or service, and it is determined by the market supply and demand factors. For example, a seller may set a price for a product based on the production cost, competitor prices, and the perceived value to the buyer. Value-in-Use refers to the utility or satisfaction that a product or service provides to the buyer. It is the value that a product or service adds to the buyer's life or business operations. Value-in-use is subjective and varies from person to person, and it is not directly related to the price of the product. For example, a car has value-in-use as it provides transportation, convenience, and a means to carry out activities, while a phone has value-in-use for communication, entertainment, and information retrieval.

Experience-enhancing factors

Yes, those are some common experience-enhancing factors that businesses or organizations can use to create memorable and engaging experiences for their customers or audience. 1. Theme the experience: (restaurant i.e. rock music). It helps differentiate ourselves, can have higher prices This involves creating a clear and consistent theme or concept that ties together all aspects of the experience. Themes can help to make the experience more cohesive, memorable, and immersive. The brand can become a theme, like coca cola, heinken etc. Like a museum. 2. Events: Events (e.g virtual concert in media markt, connected to the products they are selling). Ikea selling beds, you can sleep over for a night and get a free breakfast the day after. Smaka på, resturang, för att locka till kunder. Adding special events or activities can help to create a sense of excitement and anticipation, and can provide opportunities for customers to engage with the brand or product in a unique way. Events can also help to create a sense of community and build relationships with customers. 3. Engage all senses: prada store, every wall is of glas. Restaurang "under" in norway. Under the water. Restaurang mother, högtalare och ljud för varje måltid. Engaging all senses can help to create a more immersive and memorable experience. This involves incorporating visual, auditory, tactile, and olfactory elements to create a more holistic and multi-sensory experience. 4. Interaction facilitation: Facilitating interactions between customers and the brand or product can help to create a more engaging and personalized experience. This can involve providing opportunities for customers to customize or personalize their experience, or creating spaces for customers to interact with each other and share their experiences. customer service 5. Storytelling aspects: Incorporating storytelling elements into the experience can help to create a more compelling and memorable narrative. This can involve creating a storyline or narrative arc that ties together different elements of the experience, or using characters or personas to bring the experience to life. By incorporating these experience-enhancing factors, businesses or organizations can create more engaging, immersive, and memorable experiences for their customers or audience.

Key characteristics of unstable markets

•Genuine uncertainty about the future.

Value Creation

•The process of creating value for customers through the development of new or improved products and services •Understanding how to provide a differentiated marketing offer.

Value in use equation

(Benefits (A) - Benefits (B)) - (Cost (A) - Cost (B)) - (Price (A) - Price (B)) a=product of interest b=next best alternative

emotion state questions

(b) To measure pleasure, the survey could include questions such as "Did you enjoy your shopping experience?" or "How satisfied were you with the shopping experience?". To measure arousal, questions such as "Did the store environment stimulate your senses?" or "Did you feel excited during your visit?" could be included.

Marketing activities (value creation and value capture)

- Value creation (buyers) 1. Sensory 2. functional 3. symbolic These components represent the different ways that a product or service can create value for customers. 1. Sensory value refers to how a product or service appeals to a buyer's senses, such as sight, sound, smell, taste, and touch. 2. Functional value refers to how a product or service satisfies a buyer's practical needs or solves a problem for them. 3. Symbolic value refers to how a product or service conveys a certain image or status to the buyer, such as a luxury brand. - Value capture (sellers): 3 common ways that companies capture value: - Profits - market share - growth This refers to the increase in sales revenue over time. Companies want to capture value by achieving sales growth

3 Kinds of Value Propositions

1. All benefits. Simply list all the benefits they believe that their offering might deliver to target customers. The more they can think of, the better. This approach requires the least knowledge about customers and competitors and, thus, the least amount of work to construct. 2. Favorable points of difference. The second type of value proposition explicitly recog- nizes that the customer has an alternative As this example shows, "Why should our firm purchase your offering instead of your com- petitor's?" is a more pertinent question than "Why should our firm purchase your offer- ing?" The first question focuses suppliers on differentiating their offerings from the next best alternative 3. Resonating focus. Although the favorable points of difference value proposition is preferable to an all benefits proposition for companies crafting a consumer value proposition, the resonating focus value proposition should be the gold standard. This approach acknowledges that the managers who make purchase decisions have major, ever-increasing levels of responsibility and often are pressed for time. They want to do business with suppliers that fully grasp critical issues in their business and deliver a customer value proposition that's simple yet powerfully captivating. Suppliers can provide such a customer value proposition by making their offerings superior on the few elements that matter most to target customers, demonstrating and documenting the value of this superior performance, and communicating it in a way that conveys a sophisticated understanding of the customer's business priorities.

THREE TYPES ON ECOSYSTEMS

A business ecosystem refers to the network of organizations, people, and resources that support a particular business. It includes suppliers, customers, competitors, and other stakeholders who play a role in the success of the business. A business ecosystem is critical to the success of a business because it provides opportunities for partnerships, collaborations, and access to resources, skills, and information that a business needs to operate and grow. For example, if you own a restaurant, your business ecosystem would include your suppliers who provide you with ingredients, your customers who eat at your restaurant, and your competitors who offer similar dining experiences. Your business ecosystem also includes other stakeholders, such as government agencies that regulate your industry, media outlets that cover your restaurant, and other businesses in your community that may support your operations. An innovation ecosystem, on the other hand, refers to the network of individuals, organizations, and resources that support innovation in a particular industry or region. This includes research institutions, universities, investors, and entrepreneurs who work together to develop new products, services, and business models. For example, if you're working in the technology industry, your innovation ecosystem would include universities that conduct research in your field, venture capitalists who provide funding for startups, and other companies that are working on similar technologies. In summary, a business ecosystem refers to the network of organizations and stakeholders that support a particular business, while an innovation ecosystem refers to the network of individuals, organizations, and resources that support innovation in a particular industry or region. Both are essential for the success of a business, but they have different focuses and goals. ---- 1. The business eco-system A business ecosystem typically refers to the network of organizations and individuals that work together to create and deliver products or services within a particular industry or market. This can include suppliers, customers, competitors, and other entities that are interdependent and collectively shape the competitive dynamics of the industry. Business ecosystem: The smartphone industry is a good example of a business ecosystem. It includes companies like Apple, Samsung, and Google, as well as suppliers of components like microchips and screens, and app developers who create software for the devices. All of these entities are interdependent and work together to create value for customers and drive growth in the industry. Samsung also with Apple and Google in various ways. For example, Samsung supplies hardware components for Apple's iPhones, and Samsung smartphones run on Google's Android operating system. A community of interdependent organizations. E.g. silicon valley Companies come together, share ideas etc. Overlapping with clusters, like i.e silicon valley 2. The innovation-ecosystem: An innovation ecosystem is a network of individuals, organizations, and institutions that collaborate to foster innovation and create new products, services, and processes. Ecosystems that develop around an innovation or a customer-facing value proposition. Shared mission, want to achieve something, a collective goal, UN, joint venture, i.e intel Innovation ecosystem: The development of electric cars is an example of an innovation ecosystem. It includes car manufacturers like Tesla and Nissan, battery suppliers like Panasonic, and charging station providers like ChargePoint. Additionally, government agencies, non-profit organizations, and academic institutions may also be involved in the ecosystem as they contribute to the development of the innovation. 3. The platform-ecosystem: The ecosystems develops around a platform. Shared marketplace or transactions place for business, i.e. Alibaba, amazon, airbnb, the winner takes the entire market. Platform sponsors and complementors. Because a platform sponsor interacts with all the complementors and with the end users, it is often in a strong position to govern the ecosystem. Examples of platform ecosystems include app stores, social media platforms, and online marketplaces.

A value element

A value element is any potential source of value for customers

What is service? According to SD logic

Application of knowledge and skills for the benefit of others

For ecosystem strategy

An ecosystem strategy refers to a company's plan for participating in or creating an ecosystem of interconnected organizations, technologies, and markets. In an ecosystem, multiple actors collaborate and compete to create value for customers and generate growth opportunities for themselves. 5 Questions to guide an ecosystem strategy Yes, you can certainly connect the concept of value-in-use to ecosystem strategy and the two questions you mentioned earlier. 1. Can you help others create value? Is about considering how your organization can contribute to the success of other actors in the ecosystem. By offering complementary products, services, or capabilities, your organization can help others achieve their goals and create value for the entire ecosystem. For example, let's say you are a company that produces specialized camera lenses for professional photographers. Although you are not directly competing with camera manufacturers, you are still providing a valuable product that enhances the capabilities of those cameras and makes them more attractive to potential customers. By offering your lenses as a complement, you are helping the camera manufacturers create more value for their customers, which in turn helps to grow the entire ecosystem. let's say you are a software company that provides a cloud-based project management tool. You might ask yourself how you can help other actors in the ecosystem create value. One possible answer is to integrate your tool with other complementary tools that are commonly used in project management, such as time tracking or budgeting software. By doing so, you would be helping those other companies create more value for their own customers and improving the overall efficiency and effectiveness of the ecosystem. Additionally, by collaborating with those other companies, you might be able to identify new opportunities for innovation and growth within the ecosystem. 2. What role should you play? This question emphasizes the need to consider one's role in the ecosystem. Companies do not necessarily need to be the chief architect of the ecosystem and may be better off sharing the role or being a complementor to other actors in the ecosystem. 3. What should the terms be? This question emphasizes the importance of governance choices in the ecosystem, specifically around who can access the ecosystem and how exclusively attached partners must be. Effective ecosystem strategies require careful consideration of these governance choices to ensure that the ecosystem functions smoothly and fairly. 4. Can your organization adapt? This question highlights the importance of flexibility and the ability to adapt to changing circumstances in the ecosystem. Customers' needs and complementors' desire and ability to collaborate can shift dramatically, requiring changes in the allocation of resources to effectively manage the ecosystem. 5. How many ecosystems can you manage

Value concretion vs coproduction

Co-production •Collaborative creation of a company's offering Value co-production is the collaborative creation of value by multiple actors involved in a service exchange. This means that the company providing the service and the customer who is receiving the service work together to create value. Similarly, in the software product example, the company may work with its customers to develop new features or functionalities for the software that better meet their needs. By involving customers in the design process, the company is able to create a more valuable product that better meets the needs of its customers. Value cocreation •All encompassing, complex and dynamic process in which actor-determined value-in-context is collaboratively created by multiple actors

Dimensions of ecosystems

EXAMPLE The Fashion Industry: The fashion industry is a multilateral ecosystem where designers, manufacturers, retailers, and consumers interact with each other. It is nongeneric because each designer has a unique aesthetic and style. It is not fully hierarchical because designers have a lot of power in terms of creating their designs and building their brand, but manufacturers and retailers also have power in terms of producing and selling the clothing. ----------- An ecosystem is a set of actors with varying degrees of multilateral, nongenericcomplementarities that are not fully hierarchically controlled. 1. Multilateral: Many relationships exist within the eco-system. Both direct relationships and indirect relationships. In a multilateral ecosystem, there are multiple stakeholders who interact with each other in a non-hierarchical manner. This means that there is no central authority that governs the interactions between participants. Instead, participants interact with each other based on mutual interests and needs, and collaborate to create and capture value. 2. Nongeneric: refers to interdependencies between different actors or components in the ecosystem that are specific and not easily replicable. An interdepenence containing a teabag and hot water is generic (not knowledge intensive) and does not require close ties between actors. 3. Not full hierachically control: Distributed agency. There could be a coordinated hub, but an ecosystem can never be completely hierarchial. In a not fully hierarchical ecosystem, there is no single entity that has complete control or dominance over the other entities in the ecosystem. Instead, participants interact with each other in a relatively equal manner, and power is distributed among the participants. Not fully hierarchically controlled: An example of an ecosystem that is not fully hierarchically controlled is a social media platform like Twitter. While there may be a central company that creates the platform and sets certain rules, the users of the platform ultimately control how it is used and what content is shared.

Value analysis

Here is a step-by-step guide to conducting a value analysis: 1. Identify all value elements: Begin by identifying all the features and benefits of your product or service that customers find valuable. This could include improved compliance, increased productivity, cost savings, and other benefits. 2. Estimate the magnitude of value elements: Once you have identified the value elements, estimate the magnitude of each element. For example, you may estimate the level of improved compliance or the amount of increased productivity. 3. Translate value elements into money: Next, translate the value elements into monetary terms. For example, improved compliance could be translated into a reduced cost, while increased productivity could drive revenue. For value that cannot be translated into dollars and cents, view it as "value placeholders." 4. Build the value model (the value equation): Use the value elements and their monetary equivalents to build a value model or equation. This equation should show how your product or service creates value for customers and how that value translates into financial benefits. 5. Articulate value proposition(s) that speak to your (different groups of) customers: Once you have built the value model, articulate value propositions that speak to your different groups of customers. For example, you may have different value propositions for different segments of your target market, such as small business owners versus large corporations. 6. Create capabilities necessary and have the job done: Finally, create the capabilities necessary to deliver on the value proposition and get the job done. This may include investing in technology, training employees, or partnering with other companies to deliver the promised value.

Resourceness

Resourceness refers to the potential usefulness of a resource. For example, a hammer can be considered a resource because it has the potential to be useful in accomplishing a task, such as building a house. The usefulness of the hammer is determined by its ability to help accomplish the task, not because the hammer has inherent value in and of itself.

Jobs to be done

Job-to-be-done= what the customer is trying to accomplish with the help of your product or service. Describes the underlying problem, not the solution (cf. need)

four key factors that are critical to understanding how markets function as a whole.

Market formation, development, and change have received significant academic attention in recent years. This review highlights four interconnected contributions important to understand the systemic character of markets. Firstly, it focuses on the importance of legitimation in the early stages of market formation. Second, it emphasizes the importance of institutional arrangements, formal and informal, that regulate markets. Thirdly, it highlights how representation contributes to market formation. Lastly, it stresses that markets are continuously enacted and need to be established, maintained, and changed through activities and devices. 1. legitimation Legitimation refers to the process of establishing the legitimacy or social acceptance of a particular product, service, or practice within a market. This involves convincing stakeholders, such as consumers, regulators, or other actors, that a particular offering is safe, beneficial, and complies with relevant regulations ----- The importance of legitimation concerns the process of rendering a particular solution or practice congruent with current norms. The article highlights that legitimation is crucial in the early stages of market formation, especially for products that are morally questionable or subject to prohibition. The article also highlights that legitimation is essential for products whose function or effects are unknown or uncertain. 2. regulation Regulation refers to the set of formal and informal rules, norms, and institutional arrangements that govern the functioning of a market. This includes laws and regulations, industry standards, and self-regulatory mechanisms. The purpose of regulation is to ensure that the market operates fairly, protects consumer interests, and mitigates any negative externalities or risks associated with market activity. --- Closely related to legitimation is the regulation of markets, where previous research stresses the importance of institutional arrangements for how markets work. The article highlights how particular forms of expertise, like economists, contribute to shaping markets, and (groups of) actors may have other reasons for seeking to influence market institutions. 3. representation, Representation refers to the ways in which the market is symbolically and culturally represented, including how market boundaries, categories, and identities are established and maintained. Representation can take various forms, such as media coverage, advertising, and other forms of cultural and symbolic representation. For example, when a new product is introduced to the market, its success may depend on how it is represented in the media and by marketing campaigns. Representation is important because it shapes how actors perceive and understand the market, and can influence their behavior within it. --- Market representations also matter for actors who do not directly engage in exchange, such as competitive authorities. The article suggests that the link between market representation and legitimation is hardly surprising, and market boundaries result partly from representation. 4. continuous enactment of markets. Continuous enactment refers to the ongoing activities and devices that establish, maintain, and change markets over time. This includes the establishment of market infrastructures for production, distribution, and use, as well as the development of new technologies, business models, and market practices. Continuous enactment is important because it ensures that the market remains dynamic and responsive to changing consumer demands, technological innovations, and other external factors. Essentially, continuous enactment is the process by which the market adapts and evolves over time. To give an example of how these two factors are related, consider the emergence of ride-sharing services like Uber and Lyft. These services represent a new way of providing transportation services that challenge traditional taxi services. In order for ride-sharing services to be successful, they needed to be represented in a positive light to potential customers, through advertising and media coverage. Additionally, the continuous enactment of new technologies and business models was necessary to establish and grow the market for ride-sharing services. Both factors were important in the emergence and success of this new market. ------ Finally, the article stresses that markets are continuously enacted, and unless exchanges are consummated and represented as a market, claims about its existence are difficult to sustain. Activities and devices establish, maintain, and change markets, including the establishment of market infrastructures for production, distribution, and use. In summary, these four interrelated contributions, legitimation, regulation, representation, and continuous enactment, are essential to understanding the systemic character of markets. These contributions suggest that they can be conceived as parts of a single process.

Experiences-as-emotions

Model 1: How to increase arousal and pleasure: to intensify arousal by adding upbeat music, bright colors, etc. Offer a variety of products: As mentioned in the study, shoppers who were influenced by variety spent less time in the store and less money than anticipated. Retailers can use a wide range of product categories to create a sense of variety and excitement for customers. Use attractive displays: Retailers can use visually appealing displays to grab the attention of customers and create a positive emotional response. Offer promotions: Promotions such as sales, discounts, or special offers can create a sense of excitement and urgency in customers. This can increase pleasure and arousal and encourage customers to make purchases. ---------------------------- Experience as emotions The "Experience as emotions" model suggests that environmental stimuli, such as novelty and complexity, can produce emotional states in individuals. These emotional states can range from positive emotions like pleasure, to negative emotions like anxiety or frustration. These emotions can then influence an individual's behavior, leading to different effects. For example, positive emotions may lead to increased time spent in a particular environment, increased purchases, or more positive interactions with employees. On the other hand, negative emotions may lead to reduced time spent in an environment, decreased purchases, or negative interactions with employees. The model also suggests that emotions can be characterized by two dimensions: valence and arousal. Valence refers to the pleasure or hedonic tone of an emotion, ranging from positive (pleasant) to negative (unpleasant). Arousal refers to the level of alertness or energy expenditure produced by an event, ranging from low (relaxing) to high (exciting). Complexity refers to the level of intricacy, diversity, or variety within an environment. It can refer to the number of different elements or features in an environment, as well as the ways in which these elements are arranged or connected to each other. For example, a complex environment might include a variety of colors, shapes, textures, sounds, and smells that stimulate multiple senses. Let's say you walk into a store for the first time, and you are immediately struck by the vast array of products on display. There are different colors, shapes, and sizes of products, and the store has an intricate layout with multiple aisles and sections. This high degree of complexity and novelty may elicit an emotional response, such as curiosity or excitement, which could influence your approach behavior towards the environment Novelty refers to the degree to which an environment is new, unfamiliar, or unexpected to an individual. Novelty can refer to new or different experiences, stimuli, or situations that an individual has not encountered before. For example, visiting a new city or trying a new activity can be novel experiences that stimulate curiosity and excitement. Novelty can also be relative to an individual's prior experiences, so what is considered novel to one person may not be novel to another. Arousal: Examples of physiological indicators: Skin Conductance (SC), Heart Rate (HR) ----- Focus on emotions. environmental stimuli (novelty and complexity is characteristics of an environment) can produce emotions (emotional states, pleasure, arousal) which leads to an effect (time spend inside, purchasing, interaction inside with the employees) Valence = pleasure = hedonic tone Arousal = Alertness or energy expenditure produced by an event If novelty and complexity (thinking activity) is low, you will leave sooner and you will not spend much time in the store which leads to miss revenue

Reframing

Reframing involves looking at a problem or situation from a different perspective and identifying new opportunities for value creation E.g. reframing the question of whether AI will make human managers obsolete could involve shifting the focus from competition between humans and machines to collaboration between humans and machines. This reframing can lead to new opportunities for value creation, such as developing AI systems that work in conjunction with human managers to improve decision-making and productivity.

AXIOMS OF SD logic

The axioms of service-dominant (SD) logic are a set of five fundamental principles that underpin the service-dominant perspective on value creation. 1. Service is the fundamental basis of exchange. 2. Value is cocreated by multiple actors, always including the beneficiary. Example 1: Let's consider the example of a coffee shop. Axiom 2 states that value is always co-created by multiple actors, including the beneficiary. In this case, the multiple actors involved in the co-creation of value could include the barista who prepares the coffee, the owner who provides the space and resources for the coffee shop, and the customer who enjoys the coffee and the atmosphere of the coffee shop. The beneficiary in this case is the customer who is actively involved in the co-creation of value by providing feedback and contributing to the atmosphere of the coffee shop. Example 2: Let's say a patient is visiting a doctor's office. Axiom 2 states that value is always co-created by multiple actors, including the beneficiary. In this case, the multiple actors involved in the co-creation of value could include the doctor who provides medical expertise, the receptionist who helps with paperwork and scheduling, and the patient who seeks medical care and provides feedback. The beneficiary in this case is the patient who is actively involved in the co-creation of value by providing information about their medical history, expressing their concerns, and following the doctor's recommendations. 3. All social and economic actors are resource integrators. example: For example, in the context of a restaurant, the chef and the servers are resource integrators. The chef combines ingredients and culinary skills to create a delicious meal, while the servers utilize their communication and customer service skills to ensure a pleasant dining experience for the customers. Together, they integrate their resources to create value for the customers, who in turn provide feedback and pay for the service. Example 1: On the other hand, Axiom 3 emphasizes that all actors in the service exchange are resource integrators. In this case, the barista who prepares the coffee, the owner who provides the space and resources for the coffee shop, and the customer who enjoys the coffee and the atmosphere are all resource integrators who contribute to the co-creation of value. For example, the barista integrates their skills and knowledge of coffee preparation to create a high-quality product, the owner integrates their resources to create a welcoming and comfortable atmosphere, and the customer integrates their preferences and feedback to shape the coffee shop experience. Example 2: On the other hand, Axiom 3 emphasizes that all actors in the service exchange are resource integrators. In this case, the doctor who provides medical expertise, the receptionist who helps with paperwork and scheduling, and the patient who seeks medical care and provides feedback are all resource integrators who contribute to the co-creation of value. For example, the doctor integrates their medical knowledge and expertise to provide diagnosis and treatment options, the receptionist integrates their administrative skills to ensure the smooth running of the office, and the patient integrates their personal health information and feedback to help guide the doctor's recommendations. When we talk about social and economic actors in the context of Service-Dominant (S-D) Logic, we are referring to individuals, organizations, or groups that are involved in the exchange of goods, services, or ideas This means that every actor in a service exchange is involved in the process of combining and utilizing resources to create value for themselves and others. In S-D Logic, resources are not limited to physical goods or tangible assets, but also include intangible resources such as knowledge, skills, relationships, and experiences. Value is co-created through the integration and utilization of these resources, which involves the active participation of all actors in the service exchange. For example, in the context of a restaurant, the chef and the servers are resource integrators. The chef combines ingredients and culinary skills to create a delicious meal, while the servers utilize their communication and customer service skills to ensure a pleasant dining experience for the customers. Together, they integrate their resources to create value for the customers, who in turn provide feedback and pay for the service. 4. Value is always uniquely and phenomenologically determined by the beneficiary. 5. Value cocreation is coordinated through institutions and institutional arrangements. So, Axiom 5 states that value co-creation is not just about what the customer and the service provider do. It also involves the creation and use of social and institutional structures that help facilitate value co-creation. These structures are created and adapted by the actors involved in the service exchange, and they help to coordinate the activities of these actors to achieve the desired outcomes. Examples of such structures could include rules, norms, or agreements that guide the behavior of the actors involved in the service exchange. For instance, in the case of healthcare, patients and healthcare providers may work together to establish quality improvement initiatives or collaboratives to coordinate care across different providers and institutions. These structures, in turn, help to facilitate the co-creation of value in healthcare services.

service lens

The concept of the "service lens" is a key aspect of service-dominant (SD) logic. It refers to the way that SD logic views resources and how they are utilized in economic exchange. Traditionally, resources have been seen as static things that have value in and of themselves. For example, a company might view a factory or a piece of machinery as a valuable resource because it has a certain intrinsic value. In contrast, the service lens reframes resources as dynamic functions that are valuable because of the services they can provide. This means that resources are seen as a means to an end, rather than an end in themselves. For example, a factory might be seen as valuable not because of its intrinsic worth, but because it can be used to provide services such as manufacturing or production. By reframing resources in this way, SD logic emphasizes the importance of understanding how resources can be used to provide value to customers through the delivery of services. This shifts the focus from the physical characteristics of resources to their potential to provide value through the creation and delivery of services. The service lens in SD logic reframes actors from fundamentally different to fundamentally similar by emphasizing the role of all actors as resource integrators and co-creators of value. This means that instead of viewing actors as distinct entities with separate interests and goals, the service lens recognizes that all actors in a system are interconnected and interdependent, and that they work together to create and exchange value.

Service-dominant logic

Understand the end usage - elevators is needed differently for hospitals than firms

value placeholders

Value elements that cannot be quantified are labeled "value placeholders" Reputation, Relationships with suppliers, brand equity

3 ways that companies can create shared value opportunities:

there are three key ways that companies can create shared value opportunities: 1. By reconceiving products and markets Reconceiving products and markets involves meeting society's unmet needs such as better housing, improved nutrition, financial security, and less environmental damage. Companies can create shared value by refocusing on the fundamental need of their customers and developing products and services that meet these societal needs. This creates new avenues for innovation and opens up opportunities for shared value creation. Companies can be more effective than governments and nonprofits in marketing products that motivate customers to embrace societal benefits. For instance, food companies are refocusing on better nutrition, while Intel and and Wells Fargo has developed a line of products and tools that help customers budget, manage credit, and pay down debt. The societal benefits of providing appropriate products to lower-income and disadvantaged consumers can be profound, while the profits for companies can be substantial. In India, Thomson Reuters has developed a promising monthly service for farmers who earn an average of $2,000 a year. For a fee of $5 a quarter, it provides weather and crop- pricing information and agricultural advice. The service reaches an estimated 2 million farmers, and early research indicates that it has helped increase the incomes of more than 60% of them—in some cases even tripling incomes • By redefining productivity in the value chain Redefining productivity in the value chain" refers to the idea that companies can create economic value by optimizing their operations and supply chains in ways that benefit both the company and society. This involves looking beyond traditional measures of productivity such as cost reduction and efficiency, and instead focusing on creating shared value by improving social and environmental outcomes throughout the entire value chain. This can include reducing waste and emissions, improving working conditions and employee training, and fostering partnerships with suppliers to improve their sustainability practices. By redefining productivity in this way, companies can improve their competitive advantage while also creating societal value. ​​These improvements include better technology, recycling, and cogeneration, resulting in cost savings and reduced environmental impact. Companies such as Marks & Spencer and Coca-Cola have already implemented changes to reduce shipping distances, save water, and decrease packaging. The demand for water-saving technology has also created new opportunities for companies. • By enabling local cluster development The success of every company is affected by the supporting companies and infrastructure around it. Productivity and inno- vation are strongly influenced by "clusters," or geo- graphic concentrations of firms, related businesses, suppliers, service providers, and logistical infrastructure in a particular field—such as IT in Silicon Valley. Firms create shared value by building clusters to improve company productivity while address- ing gaps or failures in the framework conditions surrounding the cluster. A key aspect of cluster building in developing and developed countries alike is the formation of open and transparent markets. In inefficient or monopo- lized markets where workers are exploited, where suppliers do not receive fair prices, and where price transparency is lacking, productivity suffers.

perishability

you can't store services

Criteria of a good theory

- Must be possible to test it - It should survive the test

The value analysis

1. Identify all value elements 2. Estimate magnitude of value elements (e.g. level of improved compliance, increased productivity etc.) 3. Translate value elements into money •Improved compliance is translated into a reduced cost. •Increased productivity drives revenue •Value that cannot be translated into dollars and cents should be viewed as "value placeholders 4. Build the value model (the value equation) 5. Articulate value proposition(s) that speak to your (different groups of) customers 6. Create capabilities necessary and have the job done!

What are markets made of?

Buyers (demand) & Sellers (supplier) You can be both a buyer and a seller, it is not distinctive groups Interaction between sellers and buyers Channel of communication Policy, regulations (formal and informal, i.e some are sanctioned by the state) Other stakeholders ( involved for the rules and regulations) Operant (i.e knowledge and skills, apply on other resources) and operand resources ( i.e raw material) Medium of exchange (some currency but don't have to be monetary) Exchanges (exchange something for something else, constant transactions) - Interaction Goods: Product and services

Checklists for diagnosing markets

Checklist 1: Structure 1. Are there established sellers on the market? 2. Are there buyers on the market at present? 3. Are there established actors who provide services that support the market? 4. Are there established systems and forms for delivery, exchange, and payments? 5. Are there established rules and terms for purchases, product safety, storage, handling, etc? A specific market will seldom exhibit all the indications of belonging to one category. The analyst must make a rounded judgement. For example: •A largely stable market can still exhibit a few traits of market change. Kunna alla?

Chiseling out the value proposition

Chiseling out the value proposition involves refining and narrowing down the value proposition to make it more focused and resonating with the customer. Here is how it can be done: 1. Identify all benefits: Begin by creating a list of all the benefits that your product or service offers. This should be a comprehensive list based on your knowledge of the offering. Include all features and benefits, even if some may not be relevant to a particular customer. 2. Value drivers: Next, identify the value drivers - the specific benefits that represent a point of difference for customers and deliver a concrete value. These are the benefits that are most important to your customers and will drive their purchasing decisions. 3. Value placeholders: Identify the value placeholders - the benefits that represent a point of difference for customers, but whose monetary value cannot be communicated yet. These are benefits that may require further research or data to quantify their value. 4. Resonating focus: Based on customer value research, identify the one or two value drivers that will deliver the most value to the customer. These are the benefits that you should focus on in your marketing and messaging to create a resonating focus.