Dynamics of value propositions: insights from service‐dominant logic

Abstract

PurposeThis paper aims to examine the notion of value propositions (promises of reciprocal value between service providers and their customers), value‐in‐exchange and value‐in‐use, all within the conceptual context of service‐dominant (S‐D) logic.Design/methodology/approachResponding to calls in the recent literature for an academic critique of S‐D logic, its key constructs, and its application in marketing situations of varying complexity, the paper presents a conceptual analysis of the determinants of value emphasis in value propositions from the S‐D perspective.FindingsFour guiding principles are derived from a rigorous analysis of the relevant literatures. Ways are discussed in which firms might achieve greater flexibility in designing their market offerings, and thus manage different customer segments using different value propositions. The general conclusion is that the ability to communicate a firm's value propositions strategically and effectively is a new area for the development of competence at the core of competitive advantage.Research limitations/implicationsThe findings pave the way for empirical research into the dynamics of value propositions. Since the main focus of the conceptual framework is on the customer‐provider dyad, future studies should broaden coverage to multilateral settings and networked environments.Practical implicationsFactors that determine the relative emphasis in value propositions between value‐in‐exchange and value‐in‐use are discussed, and the management implications derived from each of the four principles identified.Originality/valueThe paper elaborates the application of S‐D logic in marketing by investigating the determinants of relative emphasis of value propositions.