From Goods to Services: The Rise of Service-Dominant Logic

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Last Updated: September 17, 2022

This article provides a summary of three research papers that cover topics such as marketing with integrity, the interface of value creation and service process, and An ecosystem service-dominant logic? The summary was written during a master’s degree course as an assignment. Papers are referenced at the the end for further reading.

Service-Dominant Logic:

Service-dominant logic is a marketing approach that emphasizes the co-creation of value between customers and firms rather than the production and exchange of goods. This approach offers an ethical and collaborative way to engage with customers that is becoming increasingly popular in today’s market.

Goods Dominant Logic:

In contrast, goods-dominant logic focuses on the production and exchange of tangible goods as the primary center of excellence. This approach was exemplified by the 4Ps (product, price, promotion, and place), which were formulated to help firms sell goods to consumers. However, over time, the market has shifted towards service-dominant logic, which emphasizes the importance of intangibles such as knowledge, skills, and processes that drive the creation of value.

Difference between Service dominant logic and goods-dominant logic:

One of the key differences between these two approaches is their focus on operant resources. In goods-dominant logic, the focus is on the inputs and outputs of the production process. In service-dominant logic, the focus is on the resources and processes that are used to create value for customers. This means that firms that embrace service-dominant logic are more likely to focus on co-creating value with customers rather than simply producing goods and selling them.

To achieve this, firms need to take a holistic approach to marketing that goes beyond the traditional 4Ps. This involves taking a stand on what they believe in (purpose), understanding the passion of their customers (passion), and following through on the experience of using their product or service (experience).

Summary in Table format

Goods dominant logicService dominant logic
Tangibles: unit of exchange was the keyIntangibles: knowledge, skills and processes driving the whole force
Standardization: batches were produced it was a seller marketsIndividuation: where every customers are being discovered and explored
Focus on operant resources and outputFocus on operant resources and processes
Make and sellIndividuation: where every customer is being discovered and explored
Firms produce values, Customers destroy it

The nature of business has also changed, as firms are now looking to create a lifetime bond with their customers. However, this is not enough, as it is more important to create co-creation values. Customers are no longer passive players in goods-dominant logic but are active in service-dominant logic.

In service-dominant logic, the focus is not on the production of a good, but on the value that it brings when it is used in context. For example, a car may be used for commuting instead of driving, which is seen as a solution rather than simply owning a car. Service-dominant logic emphasizes that value is co-created by multiple actors, including the customer.


The experience of using a product or service is also more important than owning it. Companies like Spotify, Car2Go, Netflix, car rental companies, and Airbnb are all examples of firms that offer an experience rather than simply selling a product. Rolls Royce no longer sells engines to airlines; instead, they rent engines. Signify does not sell light bulbs; they sell lighting solutions by providing lights to cities and districts.

service dominant logic and GDL difference

What is Compartmentalization:

Compartmentalization is a common problem in modern business, where “ethics” is viewed as a separate entity from the core operations. However, ethical considerations should be an integral part of any business decision-making process. When profit-seeking becomes the sole focus, tensions arise between the desire for profit and the well-being of customers. This tension can result in misleading advertising, deceptive pricing, and a lack of transparency, among other issues.

 The emerging S-D logic provides a more fertile ground for ethical marketing, with fewer ethical tensions. Ethical research standards are critical for trustworthy outcomes, and collaboration, coordination, and cooperation are essential to the research process. Ethical standards promote values such as trust, accountability, mutual respect, and fairness. 

Watch the video by Professor Glenn Parry on Vargo & Lusch “Evolving to a New Dominant Logic for Marketing

What is Transhumanism

It is a philosophical movement that seeks to break through the biological boundaries of humans through science and technology, promoting human enhancement. However, ethical considerations must be taken into account when exploring the expansion of physical and cognitive abilities and the pursuit of immortality.

Consciousness and Duty: Ethics for Researchers and their Teams

For researchers and their teams, ethics means having goodwill and doing what is right, not because it feels good or produces good outcomes, but because it is the right thing to do. Deontology provides a clear set of rules for ethical conduct, promoting the idea that no exceptions should be made in decision-making processes. People should not be treated as tools, and everyone should be treated equally.


Consciousness research is an area of study that can provide meaningful results. As a researcher, it is important to be conscious of both the external and internal situation, including disciplines, honesty, moral values, promises, and confidentiality, as well as the potential harm to society, the environment, and other living beings.

Research can serve different purposes, including information gathering and exploratory studies, descriptive studies, theory testing, explanatory studies, and predictive studies. Research participants play a critical role in the research process, volunteering to participate in human subject research after giving informed consent.


Finally, it is essential to be conscious of the internal and external situation when conducting research. Internal factors include discipline, honesty, moral values, promises, and confidentiality, while external factors include no harm to ecology and society. Overall, SDL offers a more comprehensive and customer-centric approach to marketing and business strategy, which is increasingly relevant in today’s interconnected and service-oriented economy.


  • Abela, A.V. & P.E. Murphy (2008). Marketing with integrity: ethics and the service-dominant logic for marketing. Journal of the Academy of Marketing Science, 36 (1), 39-53.
  • Makkonen, H. (2015). The interface of value creation and service process: a categorization of the relevant perspectives and an integrative framework. Journal of Business Management, 8 (3), 476-497.
  • Matthies, B.D., D. D’Amato, S. Berghäll, T. Ekholm, H.F. Hoen, J. Holopainen, & L. Valsta (2016). An ecosystem service-dominant logic? Integrating the ecosystem service approach and the service-dominant logic. Journal of Cleaner Production, 124, 51-64.

Also, read what is a service by

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