Marketing as a Service Exchange

Marketing as a service exchange

Foreword

I took my first overseas trip to Singapore in 1994 and since then have often asked myself the question why my country Vietnam is so poor. What makes the difference between Vietnam and Singapore? What makes the difference between Ho Chi Minh City and the Lion City? Like most kids of my age, I am taught in schools that Vietnam is the rich country because we possess "Golden forests", "silver seas" and because our mountains are full of "ores and minerals". If such natural resources are abundant and could make us rich, why my country is still so poor?

Over the last 17 years as I am growing up professionally, travelled to many parts of the world and obtained new skills and knowledge, I gradually find the answer to that question. Set aside any other reasons such as wars and politics, what now persuades me that my country is poor is because of the our failure to recognize what we have in terms of resources and consequently our failure to identity is required of us to develop and utilize these resources to be a richer country.

What does my question have to do with this final paper on my Marketing course?

As I read the various materials recommended by Prof Stephen L. Vargo and attended his lectures on Marketing Management, I am opened up to the whole new world of "marketing". Not only do I now understand the profound meaning of the word "resource", I am delighted to have grasped the latest concepts involving "marketing". I have a clearer picture of what is expected of me as an individual person to upgrade the quality of my life, the quality of my family and my community. As a manager of my business unit, what my company and I should have in place to be successful in the business world.

"Marketing as Service Exchange" by Professor Stephen L. Vargo

In this part I will present the latest views on the nature and role of marketing by Professor Stephen L.Vargo as well as the management implications in the context of the world's economy.

Contrast to traditional wisdom which defines goods as tangible objects and identifies the nature and success of marketing with the ability to sell as many of such objects (products) as possible, Professor Vargo' view of marketing as the whole process of exchanging service of service(s). Under this view, "products" encompass any tangible and intangible subject matters offered or circulated in the marketplace in exchange for other service(s) of some kind. In this exchange process, the ownership of communication and appreciation of values rests with not only the service generator (the firm, the producer) but also the service beneficiary (or the customer).

Emphasizing that "service" has indeed always been the root cause and outcome of all human transactions, Professor Vargo clearly conveys that a firm's role of marketing does no longer center around the firm's product itself. "Seeing the primacy of service, goods in fact are means not the purpose itself" as said by Professor Vargo in VEMBA 4 class, HCMC April 22, 2011. Marketing is about selling applied operant resources which are based on skills, knowledge and competencies and these resources are never limited. In fact, operant resources increase in quality and value over time as they are utilized. There is no base for firms to compete any more. As "the purpose in life is to serve clients and not to fight competition" (said by Professor Vargo), marketers and managers should always aims at engaging themselves and the customers in co-creating new values for their existing products while working their new ways to come up with new products (and services) to service the best interests of the customers. This effort nowadays will be made possible thanks to the revolution of innovative technology and economic approaches.

To capture above concepts of "Marketing as Service Exchange" in today's business world, Professor Vargo and his co-authors SD have introduced the Service-dominant Logic. Under this Logic, the authors "reject the traditional distinction between goods and service" and the marketing is viewed as "a continuous series of competitive social and economic processes focused on exchange opportunities involving value propositions that offer to contribute to some combination of individual,