SW2 Flashcards
What is „service“?
„Service is the application of knowledge and skills to provide benefits to others.“
The Services shift, from products to services -> Value is created not in the product but in the
job to be done – the problem you solve for customers
What is a service in the “phase oriented service concept”?
potential, process, and result.
*potential : *
Ability and willingness of the service provider to
perform service
Ex.: human resources
*process: *
Interactive process between service provider and customer
- customer integrates own resources (“external factor”)
result:
Outcome achieved for the customer as result of finished process
− outcome is always immaterial
Why are services important?
What are the Economic Sectors?
Primary sector: Agriculture
* Secondary sector: Manufacturing
* Tertiary sector: Services
* Quaternary sector: Information Services ( communications, transport,..)
* Quinary sector: Human Services (health, education,…)
What are some factors for the shift from product to service economy ?
*Demography and Society: *
People are getting older = more services in the field of pleasure, wellness, health and care services
People are becoming increasingly mobile= more services like Uber, Flixbus, Car-, Bike- and E-Scooter Sharing
Academisation of society = more education-related services
*Change of cultural values: *
Working women = more family and household related services
Need for sustainability = new services in the field of sharing economy, end of ownership
Prosperity and shift in demand:
Rising per capita income
= furniture, clothing and cars are bought
= demand for travel and entertainment (services) rising
Globalisation and competition
Cross-border trade in goods and services, simplification of imports
= Differentiation and customer loyalty through services (e.g. machine configuration,maintenance, financing services)
- Digitisation and technological progress *
Innovative tangible assets are combined with product-related services
= App economy, network, cloud, hosting services, payment, social media services
What are the “ 2 roles” in a service?
- provider
- client
What does the provider do in a service?
The provider «applies knowledge and skills» to provide a benefit to clients
What does the client do in a service?
Typically, clients pay for a service with money, but this is not always the case
What are the 5 value dimensions?
- Functional Value
- Financial Value
- Social Value
- Emotional Value
- Conditional Value
Define functional value
Performs a specific function: “Saves time”. “Makes something easier”.
Define Financial value
Creates financial wealth: “Saves money”, “Allows me
to earn money”. “Can be sold later”. “is cheaper than alternative”
Define Social Value
Affects my social position: “I am part of a group”, “Others
admire me”
Define Emotional Value
Gives me good feelings: Means something to me: “I
feel great when using it”, “Reminds me of my grandpa”
Define Conditional Value
specific conditions at the time of making the
decision: “easy to get right now”
What are the 2 value concepts?
Value in Exchange and
Value in Use
What is value in exchange and how is it generated?
is created in the provider sphere through the production and sale of a product/service
Product or service for a value in exchange (e.g. the price on the market)
What is value in use and how is it generated?
is created in the customer sphere through the consumption of the product/service
What is the value that this object/service produces when you use it?
− „Value“ is non-financial in most cases: emotional, social, …
− Value is expressed in the value proposition
What is the Service Dominant Logic?
Value is value-in-use
* only the customer creates value by using the service/product. The product/service itself
does not have any intrinsic value
* a provider may only make a „value proposition“. If a customer accepts this proposition, the
provider will realize his promise. Only then value is generated – in an interaction of
provider and client
* thus, value is always co-created!
E.g. a Laptop
SDL believes that the value of a laptop only unfolds through the practical, efficient, secure or
even fun information processing it enables a customer to do. Following this logic, the
individual utility value of the laptop could even be increased over time, e.g. by offering
personalised software.
What is the Goods-dominant logic?
Value is value-in-exchange
* value is created when a product is made that can be sold on the market
* value is seen as something “added” to products by the firm
* goods acquire value during the design and manufacturing process
* customer has nothing to do with value creation – in fact, customer destroys value by using a product
E.g. a Laptop
value created from production and is realized
through the exchange of computer for money.
With every year of use the laptop loses transaction value.
What is the unit of exchange in the Goods Dominant Logic
The good
What is the role of goods in the Goods Dominant Logic
Unit of output that has a value
What is the role of the customer in the Goods Dominant Logic
uses the value created by the supplier
What is the process of value creation in the Goods Dominant Logic
supplier embeds value in the goods
What are the resources used the Goods Dominant Logic
material/ machines,…
