A New Perspective on Value Creation and Marketing’s Dominant Logic: An Abstract
Few would argue that the success of any firm is tied to its ability to create value. Yet the concepts of value and value creation remain poorly understood. Debates regarding the nature of value have been raging on many fronts – in philosophy, economics, and marketing. However, like the quest for “The Theory of Everything” in the physical sciences, marketing scholars have yet to develop a comprehensive theory of value that incorporates the multidimensional nature of value and explains how value is created. This void is problematic for practitioners, scholars, and stakeholders. How can marketers create what is not understood? How can scholars study what is not clearly defined? Moreover, how can stakeholders measure what is not properly articulated? When faced with the task of creating value, uncertainty about what value “is” leads to unclear managerial priorities and muddled metrics, resulting in suboptimal outcomes.
The current paper seeks to address these challenges by introducing the concept of comprehensive value. We first trace the evolution of value concepts in the marketing discipline as evidenced by the historically dominant logics driving scholarship and practice. We then demonstrate that the evolution of the value concept has been plagued by an unspoken assumption that value must be either intrinsic (value in goods) or extrinsic (value in services). To move beyond this assumption, we turn to physics as a metaphor to demonstrate that, rather than an inert and static trait, value is a dynamic, phase-based attribute created within the marketing system. Finally, from the systemic view of value and value creation, we offer several propositions for marketing scholars.
CVL revives the insights offered from goods-dominant logic and incorporates the emerging societal value perspective to develop a more complete marketing paradigm. Our framework reconciles the discrepancies and gaps left by both goods- and service-dominant logics and the lack of clarity concerning the role of societal value. CVL suggests that marketing researchers must account for the tangible, intangible, and societal components inherent in product offerings when determining value and recommending strategies to practitioners. Moreover, CVL contributes to practice by reconciling the challenges in implementing service-dominant logic in processes designed to create value in physical goods along the supply chain while still allowing for the central role of the customer advocated by SDL. As the research and practice in marketing continues to evolve, a new logic is needed to guide the evolution.