Tag Archive | service-dominant logic

Traditional media is merging with social

I recently attended a doctoral thesis defense of Anna Viljakainen, who has been studying the shift from goods dominant logic (GDL) to service dominant logic (SDL) in the Nordic media industry.

Anna Viljakainen

Anna Viljakainen

According to Asle Rolland (Viljakainen, 2015) the value of journalism in the world of mass communication has based on the assumption that access to exclusive information is what creates value for the customer and to media themselves, and the most valuable kind of information has been the first release.

The tradional media industry has been mainly focused on selling goods, such as copies of print magazines, advertisements and recorded media, and measuring them by reach of audiences and number of transactions.

However, because of the proliferation of social media, the consumers have more alternatives for finding and experiencing the information, the corner stone of media industrys GDL strategy has started eroding. In response, the industry has started to servitize their offering by including reader generated content as well as offering additional services for magazine subscribers, such as discussion boards on their web properties.

Many magazines, such as Cosmopolitan and Olivia in Finland have gone as far as having virtually no editorial content at all. Almost all the material in these brands are either created by readers or by advertisers both online and in print. The role of editorial staff has been reduced into curators of said content.

At the same time, social media giants, such as the Facebook have started to diversify themselves from single destinations into variety of brands. The Facebook for example owns WhatsApp and Instagram properties.

To me, it seems like the field of media is converging into a brand driven, curated social media, where the both the content and the consumption experience is co-produced with the brands and the readers. The attention of readers (or users) has started to revolve around interesting topics or articles, rather than within a media or a medium.

Thus, probably within a decade the distinction between the traditional media industry and social media has vanished because of the shift from GDL to SDL in the media industry and platformization of the social media from the other end.

To keep the traditional media industry in the game, Viljakainen identifies that a new method a new method of measurement, a currency, where reach and effectiveness of each media can be scaled against each other is needed. Here the work is only starting, but Viljakainen might be onto something big.

(Viljakainen, 2005): https://aaltodoc.aalto.fi/handle/123456789/15384

Master Thesis: Empowering Child Sponsorship with Service-Dominant Logic

Child Sponsorship

Child Sponsorship is highly motivational form of regular giving. Largest child sponsorship organizations in Finland are currently Plan, World Vision and Fida. Picture taken from Fida’s project in Tanzania by Erkki Salo.

In this blog post, I Introduce my master thesis and share some of my personal experiences from the MBA studies. As part of my master thesis (which can be downloaded from here: Salo Erkki Master Thesis) I developed a Service-Dominant Logic based business model canvas application for child sponsorship organizations. With the help of the canvas, value propositions for the child sponsorship of the case organization Fida International were developed.

Turmoil in fundraising

Child sponsorship is a highly popular and high impact form of giving that affects to the lives of 90 million people. In child sponsorship, a donor, called a child sponsor, supports a child in a developing country through regular donations. With the support, a sponsored child receives improved chances in life. The case organization Fida International is one of these organizations with its 5200 child sponsors helping 10 000 children in poor countries.

Child sponsorship organizations, like any other charities, are facing the changing world as donor generations are aging without the younger generations filling in the gap. In order to adapt to the change, donor customers cannot be treated as passive receptors of marketing messages, but instead as co-creators of value. By co-designing services together with customers and with other stakeholders, doors can be opened for innovations.

New Business Model Canvas application for child sponsorship

The starting point of the thesis was that the Business Model Canvas (see my previous blog post) introduced by Osterwalder and Pigneur (2010) can help organizations to visualize and innovate successful business models. Despite of its strengths, it is said to represent an old paradigm of service marketing called goods-dominant logic.

The new paradigm of service marketing introduced by Professors Vargo and Lusch (2004), called the Service-Dominant Logic, challenges the Goods-Dominant Logic. In the Service-Dominant Logic, value is always co-created with customers and is solely determined by the customer.

Therefore, I decided to apply the Business Model Canvas with Service-Dominant Logic and to add also insights found from the fundraising literature and from other available business model canvas applications, such as the Lean Canvas and the Nonprofit Business Model 1.0. After the analysis, I used the original business model building blocks by Osterwalder and Pigneur, but altered the original key questions.

The developed business model canvas application was used as part of the service design process to develop value propositions of the case organization’s child sponsorship. Multiple different stakeholders were involved, and the focus was on the big picture. The chosen service-design process was the Double Diamond. As outcomes of the thesis, the case organization gained a deeper understanding of their donor customer needs and how the developed value propositions were linked to the donor customer’s public and private desired outcomes.

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Service-dominant logic in business models – a workshop with Professor Vargo

Written by Katri Ojasalo

The two trending phrases in academic and business conversations are “service-dominant logic” (SDL) and “business model canvas” (BMC). Is there a connection between them? Or are they just two extremes: the first one an academic theory and the latter one a business tool?

In fact, they are quite far from each other. We can see that the BMC is clearly based on goods-dominant logic. This comes up for example in the use of terms, such as customer segments, channels etc. So, does this tool guide businesses to focus on more irrelevant issues and neglect the guiding principles of SDL: customer value and value co-creation? This was the notion that brought a group of Finnish service researchers together.

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

Professor Vargo commenting on our working version of a SDL-based Business Model Canvas

In fall 2012, service researchers from various Finnish universities were gathered to discuss the future of service research and service competences. During the discussion, we realized a common interest in further developing the BMC, which we all had been using in different contexts in teaching, research, consulting, etc. We saw that the BMC needs adjustments to be in line with SDL. Applying SDL in practice and truly understanding value co-creation can offer a very important competitive advantage for any organization. The BMC seems to be missing this understanding of the relevance of SDL.

To discuss and further develop this issue, we first formed an informal group that was soon changed into a Special Interest Group of the Finnish Service Alliance (FSAan association of more than 100 Finnish service researchers and companies interested in service research). The Special Interest Groups (SIGs) are forums for discussing and developing specific service-related themes and they are founded by the members of FSA.

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The Evolution of Service Science

by Jenni Aranko and Ainokaisa Kostamo

This blog post examines the evolution of Service Science which aims to be a new, interdisciplinary approach to study and innovate in service. First we’ll examine what is actually meant when discussed about service and provide a definition of service as a framework for further reading. We’ll continue with arguing why there is a need for generally approved Service Science.

Then we’ll introduce the foundations of Service Science through a selection of chapters from articles and books that were published in the late 1970s. The writers have brought the key elements from their previous studies and reflected those to today’s world.

Lastly we’ll take a look at the modern Service Science which has its foundation in the Service-Dominant logic (introduced by Vargo & Lusch in 2004) and present the most essential concepts related to it. The distinction between services and goods as one of the key questions and sources of misinterpretations in the field of Service Science is also discussed.

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