Analysis of the by Chandler and Vargo - Article Example

Topic: Contextualization and value-in-context: How context frames exchange Name Unit Date Introduction The article by Chandler and Vargo looks at how context frames the exchange1. According to the article Context plays a great role in the provision of the services and the co creation of the market. The influence of context is looked from the individual actor to the market perspective. The macro and the micro levels of the marketing are analyzed on the manner in which they influence each other. The article describes the main purpose of exchange as the being able to access the valuable products that will be able to add benefits. The main use of service dominant logic according to the article is the creation of value through multiple actors as opposed to creation by a single actor. The article has been written with a primary aim of how many actors can exchange their services in a specific context and look at the way in which context help in framing the exchange. The main aim of analysis of this article is to look on the way context frames exchange by looking at an example of services offered by the higher education institutions1. Analysis Service dominant logic involves understanding the organizations, markets and the society. The main foundation of the service dominant logic is that the organizations, markets and society are concerned with the exchange of services as opposed to goods1. This involves use of knowledge and skills. In the tertiary education sectors, the exchange of the services is the main activity. In the service market the services are exchanged for other services. The article looks at the service dominant logic as the one which gives a broad market perspective as opposed to the traditional market which is composed of goods. The logic empathises on the use of skills and knowledge as opposed to used of goods. This authors looks critically at the basis of exchange on the services perspective to create value in the market. The process of exchange that empathises on exchange of knowledge and skills helps in creating of value. This leads to the need of understanding the resources in the context. The author has succeeded in defining the service dominant market using the relevant examples. This definition gives a clear view on the service dominant market perspective and how the market functions1. The goods dominant logic is more inclined with goods as the resources and looks at marketing as a supplement to the main process of production in a firm2. Marketing in the traditional view adds value to the goods. This is in contrary to the service logic which looks at the services as resources. In the higher education, services provided are the resources. The institution is a pure service market where there is only service to service exchange3. The resources connect the actors to one another according to the article. For example, a firm looking for scarce raw product will have to compete with others to get them. This process leads to interaction of the firms hence bringing the actors together. Using the authors’ perspective, a student who wants to join a high learning institution will have to look for the best institution. Through joining the institution, the student is able to link with other actors. This makes the resources valuable since they are able to react depending on the human interference. Through this, it is evident that resources are static and can be able to contract or shrink. When the actors are involved in the same resource that they can not be able control, it leads to them being connected. For example, branding will attract different customers to a certain resource connecting them. For the university, this is a service market. The university sells its services as the credit hours or the degrees that are being awarded. According to Robert & Christopher, universities are more inclined in the provision of the credit hours which are the degrees awarded. The services are of the benefit to the others who are attracted to it. The university branding attracts the students who are connected through it3. The authors’ have excelled in explaining how the resources in the service dominant market react depending on the interactions with the actors. Knowledge of the brand between the actors is an effect from the marketing efforts of the firm4. The article looks at the brand knowledge as a resource. The brand knowledge can be looked at as a resource that changes according to the reaction of the actors. This is supported by Vargo, Maglio & Akaka, where customers are perceived to be active rather than passive5. The article recognizes that the customers have the ability to create value in an industry with other industries. In the tertiary education sector, there is understanding that the service delivery must involve other players beyond the interactions of the staff. To view the higher education sector as a service provision, it involves understanding that all the utilities that are involved as part of the services. This means that the classrooms, seat, and boards which are tangible should be taken as part of service provision. The learning enhancement services are the type of branding that can help in attracting the actors. The involved parties and facilities in the education sector are to be viewed as the bundles that help in attaining the services. The expanding or contracting of the brand knowledge as a resource is associated with the ability of the actors to maintain a strong brand which is favorable and has its uniqueness. For higher education, brand knowledge is an important resource that can help in increasing the services familiarity, reduce the existing uncertainty and increase the premiums to the firm. This article supports that the actors in a certain industry can come together and builds each other knowledge to collaborate or compete. Knowledge is a resource that is not controlled by a single actor in the industry. The article gives a clearer and concise explanation of the brand knowledge using credible sources. The type of definition relates well to the tertiary education sector. The article gives clear information regarding brand and information. This is through defining that these are resources which cannot be controlled by a single actor3. In the education sector, a student who is looking for a place for further education may be guided by a familiar institution brand. The familiar institution brand will in this case server as a resource4. This is a type of connection that a resource plays a part in. the connection to an institution through a brand familiarity is an example of how resources can connect different actors. The author elaborates that due to the past efforts by the actors and their obligation for the future services, they become connected by the context in which they are embedded1. According to the authors, the manner in which the actors see each other as resources is directly affected by the context. The actors and the contexts define each other partly. For the higher learning institutions, each actor has an effect on the context which affects others. This is evident by the way the actors affects others actors and the entire context. The author asserts that actors in the context are always integrating and making the exchange of the resources with others, this leads to the act of sharing. Through this, the context is able to change continuously. The continuous change leads to the fluidity of the market. The ability of the market to be fluidity is due to the forming by the context. This is supported by the situation that happens in the higher learning institutions where actors interact with others in different contexts affecting them. The authors have used examples and explained the fact that the context frame is the visible exchanges that are witnessed. Looking at the learning institution, the value of a lecture is produced through co creation. This is between the lecturers and students who are the actors in the sector. The context can be simple or complex depending on the type of the market. For example, the international market is more complex as it involves a larger area than domestic market5. Value is made through co creation by all the actors involved. Co creation is an important aspect in the service dominated market. This is through enhancing of the services to serve the needs of the users. For example, using technology, it becomes easier to share knowledge. In this case, technology helps in co creation. The authors view on service in context is clear and well supported using relevant materials. The authors argue that the co creation of value is influenced by the context. The evidence of the authors’ familiarity with the service in context perspective is seen through their ability to use relevant examples. Their examples are able to relate on how the context influence the service. This can be illustrated using the service delivery in the higher learning institutions. In the higher learning institutions, the joined actors who exchange services make up a context. This is due to the fluidity of the service market. Each of the actors differs in their service exchange due to the fact that context affects them6. The main issue that is pointed out by the article in relation to the context is the fact that it affects the ability to exchange the resources1. The authors propose that the context can be viewed in three perspectives. The three perspectives are micro, macro and meso level. This analysis has enabled the authors to look deep into the way in which context frames the exchange. This can be supported by Martin and Maryam who looks at the institutions in the modern context. The article specifies that knowledge and skills are unique from each other and play different roles in an economy. The article supports the fact that knowledge a valuable asset that is used by skilled person7. When an actor uses the resources to serve another actor directly, this is service at a micro level context. Indirect exchange of services leads to meso level context. When the service is done in a complex service, this implies that it is being done on a macro level. All these contexts are exhibited in the delivery of tertiary education. For example, when two actors who may be students or lecturers exchange their services, this is a micro level context. When there is exchange in a complex network, it leads to a Meta context1. Context framing the market Through critical analysis of the article, the actors interact with other actors or firms through exchange of services. A higher education institution may interact with another institution, students, lecturers or other services firms which constitute the actors. The authors have explained well on the way the context affects the market. This has been done through looking at the exchange at each level of market. The final outcome of the authors’ inquiry is the fact that the actor ability to deliver in the market is contributed by the unique context in the micro, meso, macro levels and the dynamic Meta layer. The article has been able to establish that the context is multidimensional and is affected by the level. This has pointed out that the context can not be ignored in the value co creation in the service dominant market. For example, ion the international market, the context is more complex than a local market. According to Akaka, Vargo & Lusch, the global consumer nature and the global systems dynamics makes the international market more complex8. According to the article, the stakeholders in an international market are interconnected by different institutions through sharing the services. The international market involves national and international contexts which makes it complex. The different context that the international market comprises helps in framing the exchange. For the higher learning institutions, they are involved in different contexts. The actor acts among each other and within a complex system. The institutions themselves react with other institutions through sharing of services. The complexity in which the higher learning institutions are involved in differs depending on the context. Some of the institutions are involved in service exchange across the regional market into the international market. The involvement in the international service market leads to a more complex context. The universities are capable of giving their output through classroom, campus or through online. This gives diverse context in which the services are delivered. The contexts are different and are capable of framing the output from the institution. The value that is created in the service market is contextual. This has been well illustrated by the authors through use of the relevant examples and explanation. The management of a service industry or market has to be affected by the context. The situation that a firm or a service institution finds itself in has a direct effect on the co created outcome. Service delivery is context dependent as supported by the articles and other sources. The authors have been able to explicitly explain the way in which the context frames the output in the service dominant market1. The tertiary education institutes are directly affected by the context in their service delivery as the article elaborates on the context. This is due to fact that these institutions have different actors who are in different contexts. The institutions depend on other institutions to offer distance learning. The two institutions collaborating are based on different contexts. This leads to effects on the output which can be addressed. To deliver quality services in different contexts, the higher education sectors are supposed to invest in the facilities. This will enable the institution to reduce the disparities in output that are context related. Value in the service market is achieved through exchange, the individuals actors are able to create market through trying to reconcile the tensions arising from their context due to the complex networks3. Conclusion The article has proven that the context frames the exchange in the service dominant (SD) market. The authors’ argument on the context ability to shape the market has been supported by their numerous references to peer reviewed journals. I have been able to validate the authors claim by critically evaluating the article in a theoretical perspective and looking at the implications it has on the service industry. To achieve this I have looked at the higher education institution as a service which is delivered depending on context. Through comparison with their article, it’s evident that context frames the exchange. The context in which the higher education is offered has an impact on the quality of the output. Change in the context may lead to a more complex system, micro or meso depending on the layer. The authors’ argument has been supported by other authors who have looked at the service delivery in different markets context. The difference in the context has brought out the difference in the output and the way the actors interact. The analysis of this article is important in the understanding of the marketing theory and the diverse contexts involved. The analysis is a great step in understanding the effects of contexts on the service dominant (SD) market. There is still potential for further research on the topic by looking on the way market evolves based on the context. 1. Jennifer D. C. & S. L. Vargo, ‘Contextualization and value-in-context: How context frames exchange’, Marketing Theory, Vol. 11, No. 1, 2011, pp. 35–49 2. Marcus S. & J., Gnoth, ‘Understanding the service-dominant (S-D) logic from within the firm’, Otago Forum 2 Academic Papers, Vol. 2. No.9, 2008, pp. 127-135. 3. Robert L. and C. Wu, ‘A Service Science Perspective on Higher Education, Linking Service Productivity Theory and Higher Education Reform’, Center for American Progress, Vol. 1, No. 8, 2012, pp. 1-10 4. Vargo, S. L., Maglio, P. P. & Akaka, M. A., ‘On value and value co-creation: A service systems and service logic perspective’, European Management Journal, Vol. 26. No. 1, 2008, Pp. 145–152. 5. Prahalad, C., and V. Ramaswamy, ‘Co-creating unique value with customers’, Strategy & Leadership, Vol.32, No. 3, 2004, pp. 4-9. 6. Vargo, S. L., and R.F. Lusch, ‘Service-Dominant Logic: Continuing the Evolution’, Journal of the Academy of Marketing Science, Vol.36, No. 1, 2008, pp. 1-10. 7. Martin P. & M. Purvis , ‘Institutional expertise in the Service-Dominant logic organizational context’ , Otago Forum 3 Academic Papers, Vol. 3, No 15, 2008, pp. 141-148 8. Akaka, M. A., S. L. Vargo, and R. F. Lusch, ‘The Complexity of Context: A Service Ecosystems Approach for International Marketing’, Journal of International Marketing, Vol. 21, No. 4, 2013, pp. 1–20 References Marcus S. & J., Gnoth, ‘Understanding the service-dominant (S-D) logic from within the firm’, Otago Forum 2 Academic Papers, Vol. 2. No.9, 2008, pp. 127-135. Martin P. & M. Purvis , ‘Institutional expertise in the Service-Dominant logic organizational context’ , Otago Forum 3 Academic Papers, Vol. 3, No 15, 2008, pp. 141-148 Jennifer D. C. & S. L. Vargo, ‘Contextualization and value-in-context: How context frames exchange’, Marketing Theory, Vol. 11, No. 1, 2011, pp. 35–49 Robert L. and C. Wu, ‘A Service Science Perspective on Higher Education, Linking Service Productivity Theory and Higher Education Reform’, Center for American Progress, Vol. 1, No. 8, 2012, pp. 1-10 Akaka, M. A., S. L. Vargo, and R. F. Lusch, ‘The Complexity of Context: A Service Ecosystems Approach for International Marketing’, Journal of International Marketing, Vol. 21, No. 4, 2013, pp. 1–20 Vargo, S. L., Maglio, P. P. & Akaka, M. A. , ‘On value and value co-creation: A service systems and service logic perspective’, European Management Journal, Vol. 26. No. 1, 2008, Pp. 145–152. Prahalad, C., and V. Ramaswamy, ‘Co-creating unique value with customers’, Strategy & Leadership, Vol.32, No. 3, 2004, pp. 4-9. Vargo, S. L., and R.F. Lusch, ‘Service-Dominant Logic: Continuing the Evolution’, Journal of the Academy of Marketing Science, Vol.36, No. 1, 2008, pp. 1-10. Read More