Service Dominant Logic is a mindset for a unified understanding of the purpose and nature of organizations, markets and society. Marketing researchers Robert F. Lusch and Stephen L. Vargo presented new perspective to marketing and termed it as SD logic of marketing (2004). The SD Logic is concerned with service in exchange of service and the marketing thought embraces the concepts of value-in-use and co-creation of value. Thus the firms are instructed to market with customers rather than market to customers (SDL, Sdlogic. net).
According to Philip Kotler (1997), the importance of physical products lays not so much in owning them as obtaining the services they render. The SD Logic redefines the long standing concept of goods and services providing a new relationship between the consumer and the firm. The concept explains that the firms producing tangible goods are transmitting their services to the customer. The concept considers the customer as a co-producer of value who is continuously involved in improving the quality of product with the firm.
The much necessary and evolving shift in the dialog of marketing initiated by the SD logic has necessitated the firms to provide customized solutions, realized through interactions and relationships imbibing the essence of logic in to the strategy board game. The market-driven capabilities like market sensing and customer relating are pivotal to the firm employing SD logic. All organizational capabilities must be aligned with the strategic theme that provides directions to the firm to set strategic priorities in order to deliver superior relational value.
The SD logic views marketing in terms of continuous flow of value and service rather than units of output, opening many new strategic marketing opportunities. This has and will deeply impact the marketing function of the firms which is now the customer-consulting function, where the marketer will be the buying agent on a long term relational basis to source, evaluate and purchase the skills that the customer needs.
The new SD logic will require the marketing efforts to be a two-way communication process characterized by dialogue predominantly controlled by the customer. The new marketing strategy theory might be based on resource advantage theory, building on role of competencies in co-production of value and competitive advantage. The integrated marketing communication would emphasize on dialogue with the customer using powerful relational tools like brand identification, value perception and repeat patronage (Brodie, Little & Motion, 2008).