Service-Dominant Logic 2025

International Journal of Research in Marketing 34 (2017) 46–67
Contents lists available at ScienceDirect
IJRM
International Journal of Research in Marketing
journal homepage: www.elsevier.com/locate/ijresmar
Full Length Article
Service-dominant logic 2025

Stephen L. Vargo a,⁎, Robert F. Lusch b
a
University of Hawai'i at Mānoa, Shidler College of Business, 2404 Maile Way, Honolulu, HI 96822, United States
b
Eller College of Management, University of Arizona, 1130 East Helen Street, Tucson, AZ 85721, United States
a r t i c l e i n f o a b s t r a c t
Article history: During the last decade, service-dominant (S-D) logic (1) has taken a series of significant theo-
First received on October 31, 2015 and retical turns, (2) has had foundational premises modified and added and (3) has been consol-
was under review for 5 1/2 months idated into a smaller set of core axioms. S-D logic can continue to advance over the next
Available online 18 November 2016
decade by moving toward further development of a general theory of the market and, even
more broadly, to a general theory of value cocreation. To support this theory of the market re-
Senior Editor: Christian Homburg
quires developing more midrange theoretical frameworks and concepts of service exchange, re-
source integration, value cocreation, value determination, and institutions/ecosystems. These
Keywords:
midrange theories can be partially informed by theories outside of marketing, including
Service-dominant logic
those under the rubrics of practice, evolutionary, complexity, ecological and structuration the-
S-D logic
Theory ories. Evidence-based research is also needed; opportunities exist in areas such as (1) strategy
Institutions development and implementation (2) application of complexity economics and (3) the study
Ecosystem of the service of cognitive mediators (assistants) as heuristic tools in complex service ecosys-
tems. Additionally, opportunities exist for using S-D logic as a broader framework for the
study of macromarketing, including ethics, economic, environmental and social sustainability,
as well as public policy. For each of these, the further study of institutions and institutional ar-
rangements, which facilitate coordination among actors in service ecosystems, is needed.
© 2016 Elsevier B.V. All rights reserved.
1. Introduction
Service(s) marketing began to emerge in the early 1980s as a distinct area of marketing study and has now become a major
focus of marketing scholars worldwide. Initially, probably few scholars, if any, would have envisioned that, several decades
later, service marketing might be proclaimed as a transcending perspective for all of marketing, as has been suggested by
service-dominant (S-D) logic (Vargo & Lusch, 2004a, 2004b). As Rust and Huang (2014, p. 206) have recently commented, “In-
creasingly, and inevitably, all of marketing will come to resemble to a greater degree the formerly specialized area of service
marketing...”.
Simultaneous with service(s) marketing achieving a wider impact, an idea was surfacing at IBM that, just as it (and other
firms) had to take a role in establishing the discipline of computer science, it could be similarly important for industry to take
a major role in the advocacy and development of service science. Given the substantial advancements in service(s) marketing, it
was not surprising that this effort drew, internationally, on the research of many service(s) marketing scholars and also participa-
tion from a host of other leading firms. In particular, the industry leaders of this effort, at the IBM Almaden Research Center, in
⁎ Corresponding author.
E-mail addresses: [email protected] (S.L. Vargo), [email protected] (R.F. Lusch).
http://dx.doi.org/10.1016/j.ijresmar.2016.11.001
0167-8116/© 2016 Elsevier B.V. All rights reserved.
S.L. Vargo, R.F. Lusch / International Journal of Research in Marketing 34 (2017) 46–67 47
outlining their vision of service science (Maglio and Spohrer, 2008, p. 18), suggested “service-dominant logic may be the philo-
sophical foundation for service science, and the service system may be its basic theoretical construct.”
During the mid 1990s, we began collaborating on what resulted in our (Vargo & Lusch, 2004a) first article outlining a frame-
work that has become known as “S-D logic”. The core ideas were rather simple and straightforward. First, marketing activity (and
economic activity in general) is best understood in terms of service-for-service exchange, rather than exchange in terms of goods-
for-goods or goods-for-money. In other words, it is the activities emanating from specialized knowledge and abilities that people
do for themselves and others (i.e., service, applied abilities) and the activities they want done for them, not the goods, which are
only occasionally used in the transmission of this service, that represent the source of value and thus the purpose of exchange.
Second, value is cocreated, rather than created by one actor and subsequently delivered.
As with all “new” ideas, neither of these was entirely new (c.f. Arthur, 2009). For example, Bastiat (1848/1964) had declared
that “services are exchanged for services” over 150 years ago. Likewise, Prahalad and Ramaswamy (2000) had been advocating
value cocreation for several years prior to Vargo and Lusch (2004a) and before them Ramirez (1999) had traced its recognition
back at least 300 years. In fact, S-D logic was, from its beginning, more about the identification and extension of apparent coales-
cence in the ongoing development of marketing thought, as reflected in the title “Evolving Toward a New Dominant Logic for Mar-
keting” (Vargo & Lusch, 2004a; see also Akaka, Vargo, & Lusch, 2012), than a radically new idea. That is, it has been grounded on a
foundation built by many others, as has been its progress.
Arguably, what was new was the articulation of an initial, integrated framework for thinking about value cocreation in terms of
service-for-service exchange. Services (usually plural) were re-conceptualized by abandoning the intangible-unit-of-output mean-
ing they had acquired through the industrial-, production- and goods-dominant orientation —that had grown out of neoclassical
economics and the concerns of the Industrial Revolution— for the adoption of a process meaning (see e.g., Vargo, Lusch, &
Morgan, 2006; Vargo & Morgan, 2005)—that is, service (singular).
Since its introduction, the development of this integrated framework has continued, first by inclusion of the other (than service
exchange) primary activity involved in value cocreation—resource integration—and then by explication of the idiosyncratic and ex-
periential nature of value (e.g., Vargo & Lusch, 2008). More recently, in elaborating this framework, the consideration of the role of
institutions in value cocreation has moved to the forefront. All of these developments have been captured in five core foundational
premises (FPs, of which there are now a total of 11), which have more recently (Vargo & Lusch, 2016) been identified as axioms
(see Table 1).
There have been other “turns” that have been somewhat more subtle or at least not fully captured in separate FPs/
axioms—though some have resulted in the rewording of existing FPs—and others are currently in more formative stages. Examples
of these are the move to a generic-actor (A2A) orientation and the identification of a service ecosystem as the “unit” of analysis for
value cocreation (Vargo & Lusch, 2011). There are others.
In short, S-D logic represents a dynamic, continuing narrative of value cocreation through resource integration and service ex-
change that has been constructed by an increasingly large number of academics from various disciplines and subdisciplines. Like
all narratives, while it can capture a general, underlying storyline and even document key path dependencies by identifying its
major turns, it cannot reliably predict how the story will eventually unfold. Nonetheless, the purpose of this article is to suggest
that, for S-D logic to move forward over the next decade, it needs more midrange theory development, as well as evidence-
based research. To accomplish this, we first explicate and elaborate the narrative, as it currently exists. This better enables us to
suggest a direction in which it currently seems to be pointing into the less-knowable future (approximately 10 more years).
Then we provide a clarification of levels of abstraction and aggregation in theory development, paving the way for a more detailed
discussion of midrange theory development. In that regard, we review the epistemological approaches we have used for
metatheory development and how they are also relevant for midrange theory development. Next, we consider sources of input
for midrange theory. This points us back up to the metatheoretical level and the possibility of a general theory of the market. Im-
portantly, in the spirit of the theme of this special issue on the future of marketing, we discuss seven research frontiers that lead to
seven salient research questions; each of which could probably be used to raise dozens of additional sub-questions. Finally we
offer some concluding remarks.
2. The emerging S-D logic narrative
Our intention is to offer an integrative approach that will help identify additional, needed and potentially needed, develop-
ments. We should note, however, that this is not to be confused with a prediction of the full future narrative or its impact (if
any), which we see as emergent. Indeed, had we chanced a prediction of the current S-D logic narrative and its impact
Table 1
The axioms of S-D logic.
Axiom
Axiom 1/FP1 Service is the fundamental basis of exchange

Axiom 2/FP6 Value is cocreated by multiple actors, always including the beneficiary
Axiom 3/FP9 All social and economic actors are resource integrators
Axiom 4/FP10 Value is always uniquely and phenomenologically determined by the beneficiary
Axiom 5/FP11 Value cocreation is coordinated through actor-generated institutions and institutional arrangements
48 S.L. Vargo, R.F. Lusch / International Journal of Research in Marketing 34 (2017) 46–67
10 years ago, we would have been incorrect on essentially all accounts. Having said that, we will point toward some likely areas of
impact and suggest a partial research agenda.
2.1. Foundations, bifurcations, and conceptual turns
As noted, at the heart of S-D logic is the identification of service—the application of resources for the benefit of others—as the
common denominator of economic (and non-economic) exchange. In discussing these resources, we especially noted the primary
role of operant resources, resources (such as knowledge and skills) that can act on other resources to create a benefit, rather than
the role of the relatively static, operand resources (such as natural resources), which are more commonly considered. This concep-
tualization of service naturally reflected, at least in part, the first major bifurcation in thought that led to S-D logic and was mo-
tivated by the intractability of the question regarding the difference between goods and services, a question that, despite long
deliberations by service scholars as well as economists, was more abandoned than resolved (Vargo & Morgan, 2005).
The S-D logic solution was a transcending conceptualization of service (a process, usually expressed singularly)—i.e. as noted the
use of one's resources for another actor's benefit—that depicted service as superordinate to goods and services (units of output,
usually plural). In other words, as Gummesson (1995) had noted some years before, “activities render services, things render ser-
vices.” Given that it is redundant to speak of intangible units of output, called “services,” as being created to provide service, the
former is generally not a concept used in S-D logic. Instead, the framework suggests that service can be provided either directly or
indirectly (e.g., through a good).
2.2. Zooming out: from resource application to resource integration
Partly due to the editorial focus of the Journal of Marketing (Vargo & Lusch, 2004a), as well as to the latent influence of tradi-
tional models, the initial perspective was relatively dyadic and micro-level focused and somewhat managerially oriented. A major
turn occurred therefore with the attempt to zoom out to reveal the bigger picture. Initially, that zooming out exposed other actors,
at first generally seen as other firms (e.g., “competitors” and “suppliers”). It then extended to customer connections (e.g., family,
peers, etc.), all involved in service-for-service exchange, thus, at least part of the broader context (Akaka, Vargo, and Lusch, 2013).
But closer examination revealed that all of these actors exhibited foundational commonalities in addition to service-for-service
exchange—resource-integration activities. That is, the (especially operant) resources used in service provision were both the source
and the combined outcome of service-for-service exchange. This led to the identification of FP 9, later designated Axiom 4 (Vargo
& Lusch, 2008), an FP/Axiom that seems to have resonated particularly strongly among S-D logic scholars and others. It also re-
vealed a network structure (Chandler & Vargo, 2011), but one that had dynamic, recursive properties beyond those typically attrib-
uted to networks. It was becoming increasingly apparent that the key to value cocreation was the ongoing interplay of resource
creation and application afforded through reciprocal exchange and differential access and integration.
Full realization of this dynamism, however, required an additional turn. As we argued in Vargo and Lusch (2011), an essential
step toward fully grasping the process and extent of value cocreation is the “need to overcome (mis)conceptual problems associ-
ated with the notion of a ‘producer,’ as a creator of value, and a ‘consumer,’ as a destroyer of value. Briefly stated, all actors (e.g.
businesses, individual customers, households, etc.) engaged in economic exchange are ‘similarly’, resource-integrating, service-
providing enterprises that have the common purpose of value (co)creation. This had been partially reflected in the wording of
FP9: “all social and economic actors are resource integrators” (Vargo & Lusch, 2008) but more fully captured in the somewhat
tongue-in-cheek proclamation that “it's all B2B” (Vargo & Lusch, 2011), which was subsequently rephrased ‘more neutrally’ to
“A2A” (actor to actor). In addition, it also moved the network orientation to at least a rudimentary conceptualization of a service
ecosystem, as will be discussed.
2.3. Bridging to the future
There are two major theoretical S-D logic orientations that are closely aligned and intertwined with each other. These have
been emerging the last several years and appear to have the potential to capture the dynamic structures of markets: ecosystems
and institutional theory. They are revealed through the ongoing process of zooming out or, probably more accurately, using oscil-
lating foci (Chandler & Vargo, 2011)—looking at the same phenomena from different levels of aggregation. They also are topics that
have been mentioned in our (and others') previous writing, including a recent major update and extension of S-D logic (Vargo &
Lusch, 2016). However, they are dealt with here as “bridging concepts” (topics, research streams) because, on the one hand, their
significance for understanding value cocreation has been more introduced than fully explored and, on the other hand, we antici-
pate that their full exploration will set the stage for much of the future S-D logic development. In short, they will likely complete
the core foundation for much of the continuing progress of S-D logic.
2.3.1. Service ecosystems

As one zooms out from dyadic interactions and discreet transactions, the first thing noticed is that these dyadic interactions do
not take place in isolation, but rather within networks of actors, of which the dyad is just a part. These networks can be seen at
various levels of aggregation (e.g., macro, meso, micro). Structurally then, these networks reflect what S-D logic captures axiomat-
ically in the resource-integration specification of Axiom 3. Likewise, they emphasize that the benefit (value) realized by a
beneficiary (e.g., a “customer”) does not occur in isolation either, but rather through integration of the resources from many
sources, thus best understood as holistic experiences (FP9/Axiom3 and FP10/Axiom4).
At first glance, it might appear that there is little new here, just the acknowledgement that service provision, value cocreation
and value realization take place in networks, as sociologists Granovetter (1973), Burt (1992) and various scholars in marketing
(e.g., Achrol & Kotler, 1999) have been telling us for some time. Partially, this would be a correct evaluation. However, the S-D
logic framework adds several key characteristics that are not in all cases typical of these network conceptualizations. Most obvious
among these is that the connections represent service-for-service exchange, rather than just connections of resources, people, or
product flows; thus, in S-D logic, network actors are linked by common, dynamic processes (service provision). Second, the actors
are defined not only in terms of this service provision (resources applied for benefit) but also in terms of the resource-integration
activities that the service exchange affords. Finally, the network has a purpose, not in the sense of collective intent but rather in the
sense of individual survival/wellbeing, as a partial function of collective wellbeing. The study of purpose or purposeful behavior has a
long history in philosophical thought concerning concepts of teleology and, more contemporarily, teleonomy (Pittendrigh, 1958).
The latter focuses more on complexity, emergence and self-organizing systems (Christensen, Anthony Scott, Berstell, &
Nitterhouse, 2007), which are crucial characteristics of service ecosystems. This literature fits well as we try to understand how
wellbeing of individuals is both contingent on and contributes to a dynamic network, in which the resources of the actors are
being continually updated. It also indicates the need for a subtle but significant shift in orientation among actors, away from
the primacy of conflict and toward the primacy of cooperation and coordination. Unpacking how this “purposeful,” cooperative ac-
tivity leads to value cocreation will be a major underlying theme for the next 10 years, as will be discussed below.
2.3.2. Institutions
This coordination for value cocreation implies mechanisms for the facilitation of these resource integration and service-for-ser-
vice exchange activities. As partially discussed in Vargo and Lusch (2016), this is the role of institutions and institutional arrange-
ments. Institutions are the humanly devised rules, norms, and beliefs that enable and constrain action and make social life at least
somewhat predictable and meaningful (Scott, 2008), what North (1990) calls “rules of the game.” Institutional arrangements refer
to higher-order assemblages of interrelated institutions (sometimes referred to as “institutional logics”). Thus, S-D logic has recent-
ly identified the service ecosystem, partially conceptualized in terms of institutions, as the unit of analysis for value cocreation. Ser-
vice ecosystems are defined as “relatively self-contained, self-adjusting system of resource-integrating actors connected by shared
institutional arrangements and mutual value creation through service exchange” (Vargo & Lusch, 2016, p. 161).
With the addition of institutions and service ecosystems to S-D logic's foundational concepts, we believe S-D logic can begin to
be something more than the lens, framework, and perspective, as we have characterized it up to now. That “something more” can
take several forms, each with its own potential impact. At a minimum, it affords the completion of a relatively coherent narrative
of value cocreation through resource integration and service exchange, coordinated by shared institutional arrangements that de-
fine nested and overlapping service ecosystems (see Fig. 1).
Fig. 1. The narrative and process of S-D logic. Note: Vargo and Lusch (2016).
2.3.3. Further exploration of bridging concepts

The conceptual exploration of service ecosystems and institutions has just begun. Thus, we expect, over the next 10 years,
much of the metatheoretical work in S-D logic to be focused on these concepts. Importantly, as we argue later, for S-D logic to
be useful beyond a metatheoretical level will necessitate midrange theory development. Some of the kinds of questions that
need to be addressed both at a metatheoretical and at a midrange-theoretical level are:
• How do service ecosystems assemble?
• How do service ecosystems adapt and evolve?
• What determines the resiliency of service ecosystems?
• How do keystone actors in an ecosystem establish their position?
• How do service ecosystems innovate and how do they foster market emergence?
• How can ecosystem service(s) be integrated and fostered by service ecosystems?
• What are the institutions and institutional arrangements that allow service ecosystems to hold together and function?
• Are there particular institutions that are more relevant or that may need to be developed for digitally based service ecosystems?
• How can the institutional perspective be used to study innovation, market emergence and market plasticity as well as the decay
of firms or industries and even markets?
• How does the work of institutional maintenance continue, yet allow for organizations to explore and experiment with new in-
stitutional rules and confront risk and uncertainty and be able to survive and in some cases prosper?
Predictably, there are many more, related questions. However, as will be discussed, in all cases, midrange theory development
of ecosystems and institutions, which are intended to support a metatheory of the market, might benefit from existing theoretical
frameworks, such as those associated with culture, shared meaning, social change, and human ecology. Before exploring further
theory development in S-D logic, however, it is useful to clarify the intertwined conceptual issues of abstraction and aggregation;
a common challenge for all of science.
3. Levels of abstraction and aggregation
Whereas this “zooming out” has, in our opinion, lent itself to a more generic, holistic, experience-based theoretical framework,
its discussion has also led to some apparently paradoxical confusion. For example Wilkie & Moore (2006) described S-D logic as
managerially focused whereas others (e.g.,Gronroos & Voima, 2013) have described it as purely macro-level focused, and thus
not applicable to micro-level (managerial) phenomena. In a sense, these attributions are both correct and incorrect, primarily be-
cause they confuse two meanings of “levels.” As shown in Table 2, one has to do with the level of aggregation (e.g., societal, market,
or dyadic exchange). The other has to do with the level of abstraction (e.g., metatheoretical, midrange, or micro-foundational). S-D
logic is of course primarily focused on meta-level theory development but not solely at a macro-level of aggregation. In fact, we
would characterize it as equally, macro-, meso-, and micro-focused in relation to aggregation. Furthermore, as Chandler and
Vargo (2011) noted, it is essential to alternately zoom in and zoom out in order to understand phenomena at any level (aggrega-
tion) of interest. That is, one cannot fully understand the activity (e.g., brand selection) at one level without viewing it from an-
other (e.g., brand community).
Theoretical levels, on the other hand, have to do with levels of abstraction, rather than aggregation. Zooming in and out across
levels of abstraction might also be useful, in that theory at one level can inform theory at another (e.g., midrange to macro or vice
versa). One can also construct metatheory without directly addressing lower-level theory, at least initially, but perhaps somewhat
ironically, if not arguably, it should however address all levels of aggregation. This has been our (Lusch & Vargo, 2014) primary
emphasis, though not an exclusive one. It has also been of primary emphasis for some, though far from all, S-D logic focused
scholars (e.g., Brodie, Hollebeek, Juric, & Ilic, 2011; Flint & Mentzer, 2006). These mixed emphases will be particularly useful mov-
ing forward; given that now the (metatheoretical) narrative of S-D logic has become more fully articulated, lower-level (of ab-
straction) theory will increasingly become the focus. That is, whereas we see continuing attention being paid to metatheory, at
all levels of aggregation, we see much of the development efforts associated with S-D logic to be more midrange and micro-
level theoretical in nature, thus lending itself to direct testing, verification, and application.
Table 2
Levels of aggregation and abstraction
Levels Aggregation
Macro level (e.g., societal, community – Meso level (e.g., Micro level
national, global, local) “industry”/market, cartel) (e.g., transactions, sharing)
Meta-theoretical
(e.g., S-D logic, cocreation of value) Primary focus to date
Midrange-theoretical
Abstraction/ theory
(e.g., engagement, coproduction)
Increasing attention, looking forward
Micro-theoretical
(e.g., law of exchange, decision making)
4. Toward midrange theories
To date, our response to questions concerning normative application of S-D logic has typically been that metatheoretical devel-
opment was necessarily primary because, without an adequate theoretical foundation, premature application would likely result in
frustrating efforts. However, we also pointed out that the S-D logic lens enables practitioners to develop their own novel ap-
proaches to the opportunities and challenges they face in their company or the market. Moreover, S-D logic has been synthesized
from other, existing metatheory and midrange theory, as well as the observation of the activities of practitioners. As noted, over
the next decade, we anticipate the more purposeful generation of S-D logic-consistent, midrange theory, which will enable it to
become more prescriptive and conducive to empirical evaluation, further contributing to its development.
A note on midrange and micro-level theory is important here. As indicated, we are talking primarily about an emphasis on the
level of abstraction (see Table 2). Thus, this meaning of midrange (or middle-range) is close to that discussed by Merton (2012,
p.448):
theories that lie between the minor but necessary working hypotheses that evolve in abundance during day-to-day research
and the all-inclusive systematic efforts to develop a unified theory that will explain all the observed uniformities of social be-
havior, social organization, and social change.
From this conceptualization of midrange theory as bridging metatheoretical and micro-theoretical levels one might conclude
that this increased specificity is the same as that referred to in discussion of “microfoundations,” which has emerged in recent
literature. However, whereas there seems to be some confusion about the term, Barney and Felin (2013, p.145) insist that “aggre-
gation is the sine qua non of microfoundations,” as most other treatments of the concept seem to support. This would of course
place it on a different continuum (i.e., aggregation — micro level) in our levels model (see Table 2).
Importantly, there is no attempt here to privilege levels of aggregation or levels of abstraction or even to suggest that they are
as orthogonal as Table 2 implies – more likely, they are best considered to be oblique. Rather, it is just to point out that the ap-
proach has been to develop metatheoretical models applicable to all levels of aggregation, anticipating that future activity will in-
creasingly deal with more specific, midrange theoretical models. In all likelihood, this will of course promote hybrid approaches,
since more meso- and micro-theoretical concepts are often suitable for addressing phenomena at particular levels of aggregation.
This hybrid analysis appears to be what Storbacka, Brodie, Bohmann, Maglio, and Nenonen (2016) have done in the investigation
of engagement as microfoundational to value cocreation. Thus, while we focus on midrange and micro-level theoretical develop-
ment, we expect that much of it will be done through hybrid analysis.
More generally, the current and future developmental process for S-D logic can be viewed as three interrelated and iterative
processes as illustrated in Fig. 2, involving an increasingly large, worldwide community of transdisciplinary scholars and diverse
practitioners. As noted, the developmental process began with an analysis of other, existing meta-level paradigms, which led to
the development of a partial, synthesized metatheoretical lens and lexicon. Whereas some of this work has been at least initially
completed, the process is ongoing and iterative. Another part of the process is the development of midrange theories, frameworks
and models, seen from macro-, meso-, and micro levels of analysis. Evidence gathering and application is an additional part of the
process. As stated, the whole process is recursive. For instance, the metatheoretical development rests on both midrange theory, as
indicated, and evidence, both from observation and existing literature, which serves as a kind of evidence in its own right.
Fig. 2. The recursive research process.

5. Toward an integrative framework for midrange theory development
At the core of S-D logic related midrange theory development is the issue of how to apply our collective skills, experiences and
knowledge (operant resources), to provide benefit to households, practitioners, policy makers and others. If there is no benefit, by
definition, there is no value in use and, thus arguably, the bridge from metatheory to application has failed. However, we have
proceeded cautiously about defining this benefit, through midrange theory, too quickly. We believe it is now time to actively en-
courage the bridge between metatheory and midrange theory. Likewise, it is time to begin to encourage more evidence-based re-
search informed by this midrange theory to better bridge theory and practice.
As indicated, whereas we don't think it is possible to predict specific theoretical content and its impact approximately 10 years
out, we do believe that both the need and evidence from current research efforts point toward the further development of S-D-
logic informed theories of market-based value creation. Guided by S-D logic as an overarching framework, we see these (1) devel-
oping through a synthesis of existing and ongoing midrange marketing and transdisciplinary research (2) informed by other
metatheoretical frameworks implied by S-D logic and (3) supporting (accomplished through) many of the same epistemological
processes used in the development of S-D logic in its current form. A potential integrative approach for this development is
shown in Fig. 3. This figure covers the primary past and anticipated epistemological approaches, a representative sample of
supporting metatheoretical models and theories, as well as categories of midrange theories, organized around the axioms of S-D
logic. Only the “theories of service-exchange” category is populated with specific sources of input, and then only partially so.
The intent here is only to provide the framework for the potentially endless set of midrange theories, built on a shared foundation,
rather than to be comprehensive and constraining. We believe that the combined efforts of other interested scholars, with their
particular interests, knowledge and skills, will be essential to the task of filling in the specifics. We do however urge developing
an understanding of the epistemological approaches that we have used in the framing of S-D logic; we think they are also broadly
applicable to midrange theory development.
6. Epistemological approaches
Pulling these meta- and midrange- theoretical frameworks into a unified, coherent theoretical framework will be a fairly chal-
lenging task. This is in part because the disciplines and subdisciplines drawn on have their own conceptualizations for similar phe-
nomena, if not different ontologies. Some of this work is already in process, as noted. However, some of it will require extensive
effort, especially as scholars attempt to cut across disciplinary and subdisciplinary boundaries. We offer no simple solution to this
ages-old, interdisciplinary research challenge. However, we can review the primary epistemological methods used in our own the-
ory building, through the synthesis of numerous research streams. Arguably these can also be helpful in the development of ad-
ditional meta- and midrange theory and frameworks.
6.1. Solving tensions and paradoxes
The S-D logic framework grew out of a desire to simplify, to solve tensions and paradoxes. Among those was the paradox that
service economies were seen as tertiary, following agricultural and industrial phases, but “services” were often defined in contrast
to goods, as possessing negative qualities—intangibility, heterogeneity, inseparability, and perishability (see Vargo & Lusch,
2004b)—suggesting that advanced economies “produced” inferior (to goods) products. Something also seemed wrong with the
idea that “service economies” did not exist prior to industrialization. The general principle is that tensions and paradoxes often
point toward areas in which theory building (meta and midrange) is needed. Thus, they should be embraced and resolved (see
Lewis, 2000). There are a number of paths toward this end. Some that we have found useful and expect to aid in further theory
development are briefly discussed below.
6.2. Conceptual inversions
Conceptualization is an institutional process. In fact, concepts and their related models and relationships become so dominant
that they are taken for granted to be true. This is good in that they provide heuristics for cognition. But they also need to be
reevaluated and often challenged. S-D logic grew, in part, out of the reconsideration of the relationship between goods and “ser-
vices,” with the latter being seen as a special case of the former—essentially, intangible goods. But, as we looked to contemporary
and historical literature, we found exceptions to this thinking, suggesting that goods are actually a special case of service, the com-
mon denominator of exchange. For us and apparently many others, this inverted conceptualization began to relieve the tension
between the two concepts. As S-D logic developed, we began to see other instances in which the traditional conceptual relation-
ships seemed to be inverted (Lusch & Vargo, 2014). Examples are managerial and entrepreneurial approaches to marketing, and
competition and cooperation, with the former becoming the special cases of the latter, respectively.
6.3. Transcendence
To transcend is to see beyond what we have learned to perceive. This frequently involves higher-order abstractions, which can
capture a broad range of specific phenomena. Often this helps to resolve conflicts or artificial distinctions as the preceding discus-
sion of “inversions” illustrated. As noted, when S-D logic was introduced (Vargo & Lusch, 2004a), we argued that the conceptual
Fig. 3. Toward an S-D logic informed, general theory of the market.
distinction between goods and services was flawed and caused problems in economics, marketing, and national income account-
ing, among other endeavors. It was resolved by making “service” (singular) a transcending concept that includes a tangible good as
a special case of service provision, a distribution mechanism. A more recent transcending conceptualization is the adoption of ge-
neric “actors” (Vargo & Lusch, 2011) and the identification of common activities in relation to value creation, rather than myopi-
cally pre-assigning roles, such as “producer’ and “consumer.”
6.4. Reframing and reconciliation
S-D logic is, and will increasingly be, transdisciplinary both in meta- and midrange-theory development and in application. This
makes the syntheses of knowledge difficult, since different disciplines (or subdisciplines) often use different terms for similar phe-
nomena or the same term with different conceptualizations. Much of the work has been and will be concerned with finding or
developing a more robust lexicon, through reframing previous concepts and reconciling differences in language. For instance, S-
D logic reframes “value” from a property of output to an experiential outcome, a measure of a change in viability, wellbeing. A
market is reframed from something that is fixed or "out there" to be entered to something that is imagined, created, institution-
alized and performed. Likewise, innovation is not about inventing things but about developing systems for value cocreation.
6.5. Evidence-based research
Metatheory is relatively difficult to confirm directly based on empirical investigation. However, midrange theory is not so
constrained. Thus, as we move toward theory development at lower-levels of abstraction, we anticipate that S-D logic generated
theory will be increasingly subjected to empirical scrutiny. This is of course as it should be. Empirical confirmation and disconfir-
mation are essential to further development of robust theory.
This increased ability to subject theory to empirical scrutiny does not however suggest that evidence-based research is just
now entering the picture. Much of S-D logic was motivated and informed by practitioner observation. Some of that has been ex-
ploratory, cased-based research, involving observations of successes and failures of practices that could not be adequately ex-
plained by existing theory and models. Some of this theory-driving evidence has come from rigorous academic research. Often,
however, it has been consolidated in practitioner-focused publications, like Harvard Business Review and Sloan Management Review,
as well as books based on practitioner experiences. This combined, top-town, theory-driven, evidence-based testing of midrange
theory and bottom up, practice-driven, theory-generating activity is of course an ongoing, iterative process.
7. Sources of input
Broadly speaking, there are three sources of input for theory development: (1) S-D logic and other metatheoretical frameworks,
(2) existing midrange theory, especially that which is already being developed from S-D logic, both within and outside of market-
ing, (3) and micro-theoretical, practical observation, often from practitioners, academic consultants and others. Each of these is
briefly highlighted.
7.1. Source of input: metatheory
S-D logic of course provides the primary theoretical framework. However, the narrative, as it presently exists, has been in-
formed by or implies other metatheory. Among the most important are institutional theory, systems theory, complexity theory
and complexity economics, and evolutionary theory.
7.1.1. The institutional perspective

As discussed, we (Vargo & Lusch, 2016) recently brought the institutional perspective to S-D logic axiomatically and find it in-
tegral to both metatheoretical and midrange-theoretical advancement. Historically, marketing in general has not included much
institutional thought, at least identified as such—for exceptions see, for example, Arndt (1981) and Duddy and Revzan (1953).
Fortunately, institutional thought recently seems to be increasingly nudging its way into marketing. Of particular note are studies
by Carson, Devinney, Dowling, and John (1999), Humphreys (2010), and Dolbeck and Fischer (2015). This signals what we think
represents an opportunity for a significant contribution, not only to S-D logic but also to marketing in general. As discussed in
Vargo and Lusch (2016), some nonmarketing scholars have suggested that institutions are the core subject matter and building
blocks of the social sciences in general. We agree, though not so much in a reductionist, atomistic sense, as in a systemic and
processual sense, with institutionalization as a core process of value cocreation. We try to capture that in the discussion of insti-
tutional arrangements as integral to service ecosystems. Combined with the S-D logic narrative, we think the integration of insti-
tutional thought in the marketing literature becomes more focused and directional and allows exploration of important questions,
as suggested above.
Fortunately, there is a great deal of institutional literature from outside of marketing from which to draw. As discussed in more
detail in Vargo and Lusch (2016), these can be found in most social science disciplines, such as economics, political science, soci-
ology and organizational theory. However, the specifics of institutional theory often vary among these disciplines (for an overview
see Scott, 2008) and require some degree of reconciliation (see discussion). We suggest that not only can these reconciled
literatures contribute to S-D logic but also that S-D logic might provide a theoretical framework that can contribute to this recon-
ciliation and to the general advancement of institutional theory.
The midrange theoretical derivative of institutional theory is often identified under the rubric of “institutional work” (e.-
g., Lawrence, Suddaby, & Lecca, 2009) —the creation, maintenance, and disruption of institutions. We anticipate its role to become
considerably more evident in S-D logic (see Vargo, Wieland, & Akaka, 2015). In fact, this is already beginning to take place
(e.g., Koskela-Huotari, Edvardsson, Jonas, Sörhammar, & Witell, 2016)
7.1.2. Practice theory

Closely aligned with institutional theory is the loosely defined research stream of practice theory. Practices can be understood
as institutionalized activities – linked “doings and sayings” (Schatzki, 1996)—that constitute the “social.” This perspective not only
resonates especially well with the role of “operant resources” indicated by S-D logic, but also the role of institutional-arrangements
in service ecosystems. As with institutional theory, the diverse views of practice theorists can be difficult to reconcile with each
other, but we believe that the potential benefits to the advancement of S-D logic is worth the effort. Additionally, S-D logic
might serve as a framework to assist with this reconciliation. In marketing, significant contributions from practice theory can be
found in the work of Kjellberg and colleagues (e.g. Kjellberg & Helgesson, 2006; Korkman, Storbacka, & Harald, 2010; see also
Schau, Muñiz, & Arnould, 2009), with the latter two specifically linking practice theory and S-D logic. There are a number of
others. We have been increasingly embracing practice theory as both metatheoretically and midrange-theoretically fundamental
to S-D logic since our adoption of an actor-to-actor orientation (Vargo & Lusch, 2011).
One particular form of practice theory, Actor Network Theory (ANT) (Latour, 2005), might be especially worth noting. Among
other things, it warns against the potential pitfalls of reifying levels of aggregation, since all practices are entangled, suggesting a
“flat world” understanding. While we continue to talk in terms of levels of aggregation, we acknowledge that, the purpose is pri-
marily analytical. Even then, we (1) try to be vigilant in connecting the levels through some variation of structuration theory
(e.g., Giddens, 1984) and (2) suggest oscillating foci (Chandler & Vargo, 2011), as previously discussed. This analytical, oscillating
focus-approach also has an additional advantage: it makes more evident the whole-is-more-than-the-sum-of-its-parts nature of
systems. That is, it more readily reveals emergent properties of systems.
ANT also advises that material objects have agency. In one sense, this is not too far from Orlikowski's conceptualization of
sociomateriality (e.g., Akaka & Vargo, 2013; Orlikowski & Scott, 2008). However, it likely takes on special meaning as S-D logic
takes an ever-increasing deep dive into ecosystems as ontologically foundational, in which the separation of material and imma-
terial, as well as animate and inanimate objects, is likely to necessarily become increasingly blurred. Practically, these distinctions
are already failing us, as we move closer to a full understanding of a true Internet of Things (IoT).
7.1.3. Systems and ecosystems theory

Perhaps it goes without saying that, as presently constituted, S-D logic needs to be informed by systems thinking. This means
more than just acknowledging interconnectedness. It requires a profound ontological shift in how we see the subject matter of
science. As Capra and Luisi (2014) point out, it requires a shift in perspectives from parts to wholes, from objects to relationships,
from measuring to mapping, from structures to processes, and from Cartesian certainty to approximate knowledge. Thus, it differs sig-
nificantly from the more mechanistic underpinnings of scientific thought that have provided its paradigmatic foundation for
centuries.
Alderson (1951), notably writing in a philosophy journal, expressed some of his early thoughts on this matter when he advo-
cated the need for systematics for problems of action. Later Alderson (1965) pointed out the importance of systems thinking to
marketing (see also Adler, 1967) and tried to nudge it toward general systems theory (GST) but, arguably, neither marketing or
systems thinking was quite ready at that time. With the advent of complexity theory and complexity economics, that “readiness”
situation might now be changing. Given the service ecosystems turn in S-D logic, it is essential to its further development. In ad-
dition to our writings, this has already begun (e.g., Frow et al., 2014). We expect this to be facilitated by an increasing, general
ecosystems orientation (e.g., Adner, 2013; Iansiti & Levien, 2004; Lusch, Sagarin, & Tang, 2016) in marketing and business in
general.
The term “ecosystems” has its roots in “natural” science, and is generally attributed to Tansley (1935), who considered ecosys-
tems as the “basic units of nature.” He discussed them in terms of “holistic,” “quasi-organisms” since organisms cannot functionally
be separated from their environments, both organic and inorganic. This conceptualization resonates with ANT, notions of
sociomateriality, and current S-D logic thinking, as discussed. This is somewhat different from some, more-limited, contemporary
treatment of business ecosystems, which tend to use the term ecosystems metaphorically to discuss networked constellations of
firms, often centered on a central actor. Moreover, as we move forward, we see the whole “human” versus “natural” conceptual
divide beginning to break down.
7.1.4. Complexity theory and complexity economics

Tightly aligned with, if not subsets of, systems theory are the study of complex adaptive systems—dynamic systems character-
ized by feedback and self-adjustment—and the closely aligned complexity economics, —both primary subject matter of the Santa
Fe Institute. Complexity theory studies the repeating patterns and order behind what often appears to be complicated activities
and processes.
Complexity economics is of course the study of these phenomena in the economy. It differs considerably from neoclassical eco-
nomic thought in that it assumes out-of-equilibrium states and systems evolution. As Arthur (2015. p. 182) indicates: “Common to
all studies of complexity are systems with multiple elements adapting… to the world – the aggregate pattern—they create." As he
notes elsewhere (pp. 136–37), “The economy forms an ecology for its technologies, it forms out of them, and this means it does
not exist separately.” He continues, “Notice the circular causality at work here. Technology creates the structure of the economy,
and the economy mediates the creation of novel technology (and therefore its own creation)” (cf. Giddens, 1984). Technology here
is the application of useful knowledge (Arthur, 2009; Moykr, 2002) and that useful knowledge is captured in S-D logic as “operant
resources,” which, when applied for benefit, is defined as “service” (see Akaka & Vargo, 2013).
Complexity theory and complexity economics are still young and their application to service ecosystems has only recently
begun. However, we see integration and advancement critical to S-D logic, since service ecosystems are complex adaptive systems,
by definition, and value cocreation is a complex adaptive process. This is one of the biggest research and theory development chal-
lenges, given that, even in biology and zoology, the study of ecosystems is still in relative infancy and continues to result in as
many unresolved questions as answers.
7.1.5. Evolutionary theory

Institutional, practice, and systems theory all have several common characteristics. Perhaps most important to the advancement
of S-D logic is that they are all evolutionary, in the sense that future states and structures are built on foundations formed by past
states and structures. In addressing technology, Arthur (2009) speaks of “combinatorial evolution,” in claiming that no completely
new technologies are ever created but, rather, are formed out of recombination of parts of existing ones. While his discussion was
technology specific, we see the principle more generally applicable to the formation of institutional arrangements and fundamental
to understanding value cocreation through resource integration.
Given the postulated overlapping and nested nature of service ecosystems in S-D logic, concepts of co-evolution (e.g., Nelson,
1994) and inclusive fitness (e.g., Gardner & Foster, 2008) are likely to be particularly useful in informing S-D logic, both in terms
of meta-and midrange theory. Likewise, we expect them to contribute to the discussion of value, especially as conceptualized in
terms of change in the viability of a system (Lusch & Vargo, 2014).
7.2. Sources of input: existing midrange theory
Academic marketing has a long tradition of borrowing theories, frameworks and models from other disciplines. For example, as
a field, it originally rested on a framework adopted from economics; much of consumer behavior has been built on the literature
from midrange theories in psychology and social psychology; and much of the literature for Consumer Culture Theory (CCT)
comes from midrange theories of anthropology and sociology. It would be futile to try to capture all of the midrange theories
from outside of marketing that might be used here but a few obvious candidates are transaction cost analysis (TCA), resource-
based theories of the firm, social exchange theory, various theories of justice and ethics, effectuation theory, etc. The potential
list is infinite. A major task will be the reconciliation of such concepts among these theories and with S-D logic, as discussed above.
7.3. Source of input: practitioner observation
Contrary to at least some conventional wisdom, academics don't lead marketing thought as much as they make sense of it, re-
port it, codify it, and disseminate it. Often, the “front line” in this process is the consolidation of recent observations of shifting,
successful practices by practitioners, consultants and consulting academics as reported in the trade press—books and business pub-
lications, such as Harvard Business Review (HBR), Sloan Management Review, and California Management Review (there are of course
others).
While these sources sometimes are lacking in academic rigor, we have found that they make up for it in their timely, cutting-
edge thought concerning practices in the world of business. Thus, they often both signal the need and provide the seeds for de-
velopment of new or revised midrange theory. Consolidating these by linking them through current metatheoretical frameworks,
often updating these frameworks in the process, is the academic task.
In the development of the original S-D logic framework, we found sources such as Prahalad and Ramaswamy (2000), Prahalad
and Hamel (1990), and Normann and Ramirez (1993) from HBR, among others, particularly useful in signaling changes in contem-
porary thought. Since then, we have reconciled core ideas from additional sources. Examples are forward-looking and reframing
ideas such as “lean consumption” (Womack & Jones, 2005), “jobs to be done” (Christensen et al., 2007), “ecology as strategy”
(Iansiti & Levien, 2004), as well as many of the insights of Normann (2001). There are of course many others. We expect much
of the midrange theory development to be stimulated by similar observations of practice.
8. Ongoing S-D logic midrange theory development: vectors of diffusion
Despite the early perception that S-D logic is uniquely concerned with “services” marketing, S-D logic is not uniquely about any
single sub-discipline of marketing. In fact, it is not even uniquely about marketing, at least in the traditional sense of the word.
Instead, S-D logic offers a perspective, for seeing economic and social phenomena differently. That is, evidence seems to be mount-
ing that the S-D logic narrative offers not only a more robust model for understanding the traditional subject matter of marketing
(e.g., branding, marketing communications, social marketing, and supply chains, etc.) but also for social phenomena in general,
than do traditional models.
Fortunately, even as we (Vargo & Lusch, 2004a; Vargo & Lusch, 2008) and others were focusing on meta-level theory, some
scholars were developing more midrange and micro-level theory (e.g., Brodie, Saren, & Pels, 2011). That is, notably, the emerging
S-D logic narrative has found considerable resonance outside the subdisciplines of marketing, in various contexts.
Hence, we highlight here some of this impact. This overview is not intended as a comprehensive review of the tens of thou-
sands of citations of the work of S-D logic scholars. Rather, it is intended to highlight how S-D logic has been broadly impacting
marketing and other fields of research, even in its pre-theory stage—that is, to point out major research directions that are in pro-
cess of being explored and likely become the focus of additional midrange theory development. As noted, we anticipate that this
diffusion and theory building will accelerate as the S-D logic narrative continues to evolve into a systemic view—the service eco-
systems perspective. In a subsequent section, we will indicate some additional, major areas in which we see additional develop-
ment of S-D logic theory building.
Table 3A
S-D logic vectors of diffusion within marketing.
Marketing subfield Focus/implications Reference
Branding Insights from S-D logic to business-to-business branding. Branding becomes a communicative Ballantyne and Aitken (2007)
interaction process and brand value is (dis)confirmed in use by customers.
Building a research agenda based on S-D logic to understand brands as collaborative, value Merz et al. (2009)
co-creation activities of firms and all of their stakeholders
Drawing on S-D logic to build a conceptual model for designing and planning the customer Payne et al. (2009)
experience involved in co-creating brands.
Using S-D logic and its actor-to-actor approach to understand user-generated content about Halliday (2016)
brands.
Customer Exploring the theoretical foundations of customer engagement by drawing on relationship Brodie et al. (2011)
engagement marketing theory and the S-D logic.
Drawing S-D logic to extend the customer engagement concept beyond the moment of purchase. Vivek et al. (2012)
Customer perceived Synthesizing S-D logic and social construction approach to understand value as Edvardsson et al. (2011)
value value-in-social-context.
Extending S-D logic discussion on value by characterizing value as an experience. Helkkula et al. (2012)
Consumer culture Positioning consumer culture theory (CCT) and S-D logic as natural allies. Arnould (2007)
theory (CCT) Synthesizing consumer culture theory (CCT) and S-D logic to study value cocreation in brand Schau et al. (2009)
communities.
International Applying S-D logic and its service ecosystems approach to international marketing. Akaka, Vargo, and Lusch
marketing (2013)
Logistics/Supply chain Linking performance based logistics to S-D logic Randall et al. (2010)
management S-D logic perspective on the cocreation of logistics value (logistics as a context, logistics services) Yazdanparast et al. (2010)
S-D logic as an informative framework for value chain management. Flint and Mentzer (2006)
The perception of supply chains as value cocreation networks through S-D logic – an elaboration Tokman and Beitelspacher
and research opportunities. (2011)
Marketing Synthesizing S-D logic and dialogical orientation to broaden the framework of marketing Ballantyne and Varey (2006)
communication communication.
Examining the intersection of S-D logic and integrated marketing communication (IMC) through Duncan and Moriarty (2006)
the concept of brand “touchpoints”.
Using S-D logic and the concept of co-production to study marketing communication through Bacile et al. (2014)
personal media.
Marketing strategy Facilitating the integration of ethical accountability in marketing decisions through S-D logic. Abela and Murphy (2008)
Using S-D logic to guide marketing thought and practice for achieving and sustaining strategic Bettencourt, Lusch and Vargo
advantage. (2014)
Explicating how operant resource perspective of S-D logic can influence relationship marketing Madhavaram, Granot, and
(RM) strategy success. Badrinarayanan (2014)
Social marketing Infusing services thinking, including S-D logic, to social marketing to implementing effective Russell-Bennett et al. (2013)
midstream social marketing.
Extending social marketing by applying (and adapting) the principles, concepts and theories of S-D Luca et al. (2015)
logic.
Value propositions Applying S-D logic to offering strategies and conceptualizing value propositions as of Cova and Salle (2008)
customer-network value propositions.
Drawing insights of S-D logic for understanding the dynamics of value propositions. Kowalkowski (2011)
Exploring value propositions in the context of S-D logic through a multi-stakeholder perspective. Frow and Payne (2011)
8.1. Vectors of diffusion within marketing
The diffusion of S-D logic within marketing has been into virtually all of its subdisciplines (see Table 3A). The rubric of integrat-
ed marketing communications (IMC), unifying the different forms of marketing communications, was quickly linked to ideas
spawned by S-D logic by Duncan and Moriarty (2006). Simultaneously, Ballantyne and Varey (2006) synthesized S-D logic with
a dialogical orientation to broaden the framework of marketing communication. More recently S-D logic and its concepts have
been used to study, for example, marketing communication through personal media (Bacile, Ye, & Swilley, 2014) and user-
generated content about brands (Halliday, 2016).
The link between S-D logic and branding was also established early (Ballantyne & Aitken, 2007). Here, S-D logic has been used to pro-
vide a more holistic perspective of brands as cocreated by all of the firm's stakeholders (Merz, He, & Vargo, 2009) and to understand
cocreated brands as integral outcomes of the relationship experience that unfolds over time (Payne, Storbacka, Frow, & Knox, 2009).
In supply chain management, scholars have started to think in terms of value networks and systems, due to the influence of S-
D logic (see e.g. Flint & Mentzer, 2006; Tokman & Beitelspacher, 2011). In addition, Randall, Pohlen, and Hanna (2010) have used
insights from S-D logic to inform -performance based- logistics and others have focused on the cocreation of logistics value (see
e.g., Yazdanparast, Manuj, & Swartz, 2010).
Table 3B
Transdisciplinary vectors of S-D logic diffusion
Application field Focus/implications References
Arts philosophy and Using S-D logic to discuss arts as a resource that is integrated into everyday life. Boorsma (2006)
creative industries Guiding the practices of the creative industries by drawing on S-D logic and the metaphor of a “value Hearn et al. (2007)
creating ecology”.
Design thinking/service Linking service-dominant (S-D) logic and design science to advance service system design. Chen and Vargo (2010)
design Drawing from S-D logic to see designing for service as an exploratory process that aims to create new Kimbell (2011b)
kinds of value relation between diverse actors within a socio-material configuration.
Ecosystem services (ES) Infusing S-D logic and the ecosystem service approach from natural sciences to create a Matthies et al. (2016)
service-dominant value creation (SVC) framework.
Education Applying concepts of SDL such as cocreation to foster engagement, learning experiences and Jarvis et al. (2014)
outcomes in large classes.
Exploring the implications of S-D Logic for business education. Semeijn, Semeijn, and
Caniëls (2011)
Engineering Examines the challenges and opportunities of product-service systems for manufacturing firms. Isaksson et al. (2009)
Advocating a “paradigm shift from leadership in technology to leadership in use” by drawing upon Meier et al. (2011)
S-D logic and other supporting literature.
Health Applies S-D logic to examine the importance of oncology patients’ participation in the value Rehman et al. (2012)
co-creation process and its effect on perceived quality.
Draws on S-D logic to build a research agenda to use value co-creation as a basis for studying patient Hardyman et al. (2015)
engagement in micro-level encounters in health care.
Authors propose a new paradigm for envisioning value in health care based on S-D logic. Joiner and Lusch (2016)
Information Extending information systems research by placing service and service metaphors as core aspects of the field. Alter (2010)
systems/computer Connecting service-oriented architecture (SOA) and S-D logic have been used to develop an ontology Yan et al. (2010)
science for collaborative manufacturing.
Innovation studies An expanded and strategic view of discontinuous innovations through as SDL lens. Michel et al. (2008)
Reconciling diverging views on innovation by drawing on S-D logic and its service ecosystems perspective. Vargo et al. (2015)
Management Urging management education and research to adopt a service-dominant logic perspective and Ford and Bowen (2008)
related concepts.
Drawing upon service systems thinking and S-D logic to build an internally consistent framework for Subramony and Douglas
management research dealing with organizations, employees and customers in the context of services. Pugh (2015)
Examining S-D logic as a conceptual foundation to address strategies and guide new businesses in Pels (2012)
emerging economies.
Public Administration Draws insights from S-D logic to public management to develop a (public) service-dominant logic. Osborne et al. (2013)
Service science Establishing S-D logic as a foundation for service science and the service systems as a basic unit of analysis. Maglio et al. (2009)
Draws on S-D logic when casting service science as a transdiscipline based on symbolic processes Spohrer and Maglio (2010)
that adaptively compute the value of interactions among systems.
Tourism Demonstrates the importance of S-D logic in uncovering the role played by co-production and Shaw et al. (2011)
co-creation in the tourism industry.
Uses S-D Logic as a framework for advancing understanding of intangible assets within the hotel industry. FitzPatrick et al. (2013)
Grounded in S-D logic, the study examines how IT enables value co-creation in tourism. Cabiddu et al. (2013)
S-D logic and consumer culture theory (CCT) were quickly identified as "natural allies" (Arnould, 2007) and their synthesis has
been used, for example, to examine value cocreation in brand communities (Schau et al., 2009). By reconceptualizing value, not
just from “value-in-exchange” to “value-in-use,” but also to “value-in-context” (Vargo, Maglio, & Akaka, 2008), including “value-
in-social-context” (Edvardsson, Tronvoll, & Gruber, 2011) and "value-in-cultural-context" (Akaka, Schau and Vargo, 2013), S-D
logic offers several interesting research avenues for the discussion on customer-perceived value as an experiential and socially con-
structed phenomenon (see e.g., Helkkula, Kelleher, & Pihlstrom, 2012). S-D logic has also been identified as the theoretical foun-
dation for the development of the emerging customer engagement concept (see e.g., Brodie et al., 2011; Hollebeek, Srivastava, &
Chen, 2016; Vivek, Beatty, & Morgan, 2012).
S-D logic, as discussed, began with something of a marketing management focus (Vargo & Lusch, 2004a). More recently, S-D
logic is shown to facilitate a seamless integration of ethical accountability in marketing decision-making (Abela & Murphy, 2008)
and used to guide practitioners to achieve and sustain strategic advantage (Bettencourt, Lusch, & Vargo, 2014). In relation to offer-
ing strategies, Cova and Salle (2008) applied S-D logic to conceptualize value propositions as customer-network value propositions.
Also, the multi-stakeholder nature (Frow and Payne, 2011) and the dynamic aspects of value propositions (Kowalkowski, 2011)
have been explored. The newest application areas of S-D logic within marketing sub-disciplines include international marketing
(Akaka, Vargo and Lusch, 2013) and social marketing (Luca, Hibbert, & McDonald, 2015; Russell-Bennett, Wood, & Previte, 2013).
8.2. Transdisciplinary vectors of service-dominant logic diffusion
We have been pleased with the receptivity of many disciplines beyond marketing to the S-D logic perspective, sometimes, in
somewhat surprising areas of inquiry (see Table 3B). Management is a major business discipline that has generally not had much
of a focus on service or customers, however, Ford and Bowen (2008) have urged management education and research to adopt a
service-dominant logic perspective. More recently, Subramony and Pugh (2015) note that management research dealing with or-
ganizations, employees and customers in the context of services needs an internally consistent framework and suggest one by
drawing upon service systems thinking and S-D logic. In the field of public administration, Osborne, Radnor, and Nasi (2013)
argue that S-D logic is more relevant to public management than the previous manufacturing focus and build a research agenda
for a “public-service dominant” approach.
From very early on, S-D logic was identified as the philosophical foundation for service science—a transdiscipline based on sym-
bolic processes that adaptively compute the value of interactions among systems (Maglio, Vargo, Caswell, & Spohrer, 2009;
Spohrer & Maglio, 2010). Information systems and computer science have also increasingly drawn upon S-D logic (see
e.g., Alter, 2010; Yan, Ye, Wang, & Hua, 2010). Most recently, MIS Quarterly published a whole special issue with a focus on service
innovation in a digital age (see Barrett, Davidson, Prabhu, & Vargo, 2015).
Engineering education and research have traditionally had a strong product or goods focus. However, some engineering
scholars draw upon S-D logic and other supporting literature to advocate a “paradigm shift from leadership in technology to lead-
ership in use” (Meier, Völker, and Funke 2011, pg.1177). They suggest that product-service systems (PSS) direct manufacturing
firms to focus on meeting “customer needs rather than the physical hardware itself” (Isaksson, Larsson, and Rönnbäck 2009,
pg.329). Design thinking and especially service design have found alignment with S-D logic (see e.g., Kimbell, 2011a). Chen and
Vargo (2010) use S-D logic to link design thinking, design science, and IT in an effort to move the latter toward a full transition
to a true “service orientation.”
Within innovation studies, Michel, Brown, and Gallan (2008) provide an expanded and strategic view of discontinuous innova-
tions by deploying S-D logic; Lusch and Nambisan (2015) provide a broadened view of service innovation in the digital age
grounded in S-D logic that includes service ecosystems, service platforms and value cocreation; and Vargo et al. (2015) reconcile
different ‘types’ of innovation activities by drawing on the service ecosystems perspective. The latter argue that institutionalization
processes (i.e., institutional work)—the maintenance, disruption and change of institutions—are central to innovation for both tech-
nology and markets.
In addition to these examples, there are numerous others: S-D logic has been increasingly explored in tourism management
(see e.g., Cabiddu, Lui, & Piccoli, 2013; FitzPatrick, Davey, Muller, & Davey, 2013; Shaw, Bailey, & Williams, 2011). Education
scholars have proposed that S-D logic, and specifically cocreation, can be a way to foster engagement, learning experiences and
outcomes in large classes (Jarvis, Halvorson, Sadeque, & Johnston, 2014). The relevance of a broadened perspective provided by
S-D logic has also been acknowledged in the health disciplines (see e.g., Hardyman, Daunt, & Kitchener, 2015; Rehman, Dean, &
Pires, 2012), arts philosophy (Boorsma, 2006), and creative industries (Hearn, Roodhouse, & Blakey, 2007). S-D logic is even find-
ing its way into the ‘natural’ sciences. A recent study integrating S-D logic and the Ecosystem Services (ES) approach argues that “a
shared service-dominant approach provides an opportunity for deeper inter-disciplinary discussion between natural and business
sciences” (Matthies et al. 2016, pg.51). The use of S-D logic in all these areas illustrates the broad applicability of S-D logic. Impor-
tantly, it also provides evidence that marketing can contribute foundational theory to other academic disciplines, rather than just
borrowing theory from them, as has been more typically the case.
9. Toward a general theory of the market
As noted, S-D logic clearly has had a descriptive and explanatory impact on subdisciplines and research streams in marketing as
well as on other disciplines, through a growing number of scholars who have participated in its advancement. This explanatory
ability is significant in its own right. However, to overlook the additional potential of the ecosystems orientation, as it relates to
the role of self-adaptive systems and institutional arrangements in resource integration and value cocreation through service ex-
change, misses the true significance of S-D logic. In fact, we have been told by numerous scholars that, to them, the continual ex-
tension of the narrative is beginning to move the status of S-D logic from a “lens,” orientation,” and “perspective” toward a theory.
That is, the narrative provides not only the core concepts for it also establishes at least the beginning of a nomological network of
value cocreation through resource integration and service exchange. Although our focus now is about using the narrative to help
direct the development of a general theory of the market (see Fig. 3), S-D logic as a meta-framework can also be used to inform
and theorize about non-market forms of value cocreation.
Since early in the explication of S-D logic, we (e.g., Lusch & Vargo, 2006; Lusch & Vargo, 2014; Vargo, 2007) have suggested
that it could lend itself to a general theory, initially, not so much through a general theory of marketing as through a more foun-
dational general theory of the market. That is, we agree with Arndt (1985) when he says, “In marketing, the problem is rather
one of spinning off a basic science from a problem solving discipline” and note that marketing has evolved more from normative
science than from basic science. Likewise Venkatesh, Penaloza, and Fuat (2006, p. 252) have argued, “The term market is every-
where and nowhere in [marketing].” In other words, whereas the subject matter of marketing is (should be) the market, academic
marketers have not so much studied it in a positive sense as they have explored normative marketing decision rules (Vargo, 2007).
Thus, while there have been numerous calls for a general theory of marketing (e.g.,Alderson, 1965; Bartels, 1968; Hunt, 2002), we
have advocated for some time (North, 1990; Vargo, 2007; Vargo, Lusch, Akaka, & He, 2010), that the overarching task in marketing
is development of a general theory of the market. Importantly we have never claimed that S-D logic is either a positive or normative
theory but we agree, that it is moving closer to theory status and see it developing rapidly in that direction over the next decade.
S-D logic might also have the ability to contribute to Alderson's (1957) potentially more important, 50-year old challenge:
“What is needed is not an interpretation of the utility created by marketing, but a marketing interpretation of the whole process
of creating utility [i.e., value] (Alderson 1957, p.69).” We suggest that the S-D logic narrative can potentially contribute to that goal.
However, in so doing, it might be able to do even more than Alderson implied, by providing an understanding of value cocreation
that extends beyond a general theory of the market to inform economics and other business, as well as other, non-business dis-
ciplines dealing with value cocreation (e.g., sociology, political science, etc.). However, for this to happen, several additional tasks
need to be addressed.
10. Research Frontiers
Soon after the publication of “Evolving…” (Vargo & Lusch, 2004a), we began to get inquiries or questions from academics about
the directions, both positve and especially normative research motivated by S-D logic should and would take. Other than to sug-
gest a vision of it serving as a foundation for a general theory of the market, as noted, in most situations, we avoided sharing de-
tailed thoughts. This was because we believed the directions were (1) at the time unknowable and (2) would be cocreated by a
community of interested scholars of S-D logic (both supportive and critical), rather than by us. We believe it is now possible to
look forward with somewhat more clarity. In the following sections, we highlight some of the most salient of these, and suggest
eight research questions with the hope that doing so will not constrain, but rather motivate, participation by others leading to the
generation of a broader and more detailed agendum.
10.1. Dynamic strategy development and implementation
Integrating frameworks and theories on strategy development and implementation with the complexity of service ecosystems
is a major research opportunity. A successful S-D logic-informed strategy is dependent on a firm's ability to develop ongoing, dy-
namic, cooperative relationships that enable access to and integration of resources resulting in new resources (Lusch & Vargo,
2014). This suggests that the related inquiry entails questions of (1) whether or not marketing strategy development should be
less about the traditional marketing management decisions (e.g. the marketing mix) and more about the location of the firm
with respect to the various service ecosystems in which it participates, and (2) how to foster relationships and cooperation
with other actors—versus how to beat the competition. In brief, the most central questions for addressing strategic decisions in
marketing and management are those concerned with the ecosystems in which a firm operates and the firm's collaboration
with other actors (Johanson & Vahlne, 2011).
Despite considerable research in strategic marketing and management, there is relatively little related to the implementa-
tion of strategy. Often there is a conceptual separation between the senior executives who make strategy and the lower level
managers and employees who execute the strategy. In all cases employees are fundamentally internal service providers as
they apply their knowledge and skills to benefit each other and the firm. However, they are seldom treated as service providers
and beneficiaries.
Evidence suggests that poor implementation is frequently the cause for failures in strategy (Hickson, Miller, & Wilson, 2003;
Nutt, 1999). S-D logic, with a focus on viewing customers, suppliers and all employees as operant resources, as well as its dialog-
ical, relational, and cocreation orientation, can play a role in theorizing about how to develop more effective strategy implemen-
tation. Part of this may include bringing middle level managers and other service ecosystem actors (suppliers) into the strategy-
development process, suggesting the salient research question: how can strategic planning and implementation be cocreated with
multiple stakeholders and what is the impact of these cocreation processes on the firm and its stakeholders?
10.2. Market, economy and complexity economics
We expect to witness an increasing intersection in the study of markets, the economy and complexity. Together these inquiries
are in search of understanding non-linear, non-equilibrium, dynamically evolving service ecosystems filled with risk and uncer-
tainty. Big data will become a major way to capture real-time system dynamics not only in marketing but also in economics
and other social sciences.
10.2.1. Market and economy

Throughout the last two hundred years, multiple schools of economic thought have emerged and often competed with each
other. Although not inclusive of all schools of thought, the major schools are: Classical, Neoclassical, Marxist, Keynesian,
Austrian, Schumpetrian, Institutional, and Behavioral. Neoclassical economics propelled economics from a philosophical view on
political economy to a science with laws (such as supply, demand, declining marginal utility) that could be mathematized to
form iron laws from which predictions could be made. The neoclassical model is still prominent in economic and business educa-
tion and often in public policy making. It has also experienced longevity as a mathematical modeling framework with many ap-
plications to marketing.
Nonetheless, it could be argued that the six schools that followed the neoclassical school (Marxist, Keynesian, Austrian,
Schumpetrian, Institutional, and Behavioral) developed because of the inability of the neoclassical model to explain many, if not
most, economic phenomena. Perhaps one of the most surprising omissions in neoclassical economics is a lack of focus on innova-
tion and entrepreneurship. As Coase and Wang (2011 pg.1) observe “…how new goods and services and new ways of production
are constantly invented in the economy, how production and innovation are organized, and what forces are at work are rarely on
the research agenda in economics. It is extraordinary that the process of production is virtually invisible in economic theory.” The
focus of neoclassical economics is on resource allocation in a static world, with decisions made by rational economic actors. S-D
logic focuses on how actors integrate resources, accessed from multiple sources, to create new resources for value cocreation.
This process continually generates innovation and dynamism in the market that, at the same time, makes the market more
risky and uncertain (Lusch & Vargo, 2014). One inversion of S-D logic is from seeing management as a general function of business
to seeing entrepreneurship as the major function, of which management is a part. Viewing marketing management from an en-
trepreneurial perspective and conducting research in this direction is needed.
According to the American Economic Association, “Economics can actually be defined a few different ways: it's the study of
scarcity, the study of how people use resources, or the study of decision-making” (AEA 2016). Notably, as North (1990) suggests,
economics is not focused on the study of the market and, in most regards, lacks a theory of the market. However, more broadly, it
neither focuses on the economy nor offers a theory of the economy. An economy involves many things other than markets or their
aggregates, such as substitutes for economic exchange (i.e. sharing, self service, gift giving, forced exchange), institutions and in-
stitutional arrangements (both formal and informal), tacit knowledge, relationships, and networks to name a few. Consequently, a
salient and broad reaching research question becomes: how can S-D logic incorporate various schools of economic thought but also
serve as a foundation for developing a theory of the market and the economy as precursor to a more general theory of society?
10.2.2. Complexity economics

As stated, we are encouraged by what is becoming known as “complexity economics” (Arthur, 2015), because it allows for the
study of economic and social actors under more realistic assumptions, such as non-linearity, actor created rules that can become
law-like through institutionalization, within a network of other actors (what we call a service ecosystem). Complexity economics
is synergistic with computational economics (Beinhocker, 2011; Tesfatison & Judd, 2006), which integrates computer science and
learning with economics. Marketing scientists are using computational economics tools such as agent-based modeling (Tay &
Lusch, 2005, 2007), cellular automata (Goldenberg, Libai, & Muller, 2001, 2002), genetic algorithms (Liu, Ram, Lusch, & Brusco,
2010) and other tools from computer science to model and understand complex service ecosystems and the broader economy
comprising them. This suggests another salient research question: how can concepts from complexity economics be used to develop
a general model of a complex service ecosystem that could then be used to further research on markets and the economy?
10.2.3. Cognitive computing

The science of cognitive computing is emerging (Spohrer, 2016). Humans are on the edge of dramatically expanding their cog-
nitive abilities by the use of cognitive assistants/mediators. These assistants/mediators assist humans individually and collectively
to be able to navigate in an increasingly complex non-linear dynamic world and also to deal with the resultant complex problems
and decisions. Hence cognitive computing is inextricably linked to our prior discussion of the economy, markets and complexity
economics. Spohrer and Banavar (2015) foresee “cognition as a service” and hence as becoming more and more of a market-
facing resource. Cognitive assistants or mediators begin to address issues of bounded rationality and procedural rationality that
was a key focus of Herbert Simon (1978). Simon was less concerned with the economists' focus on what decisions are made
and more concerned with “procedural aspects of decisions, especially to deal with uncertainty, and more generally, with nonequi-
librium phenomena” (Simon, 1978, p. 494). He advocated artificial intelligence, computational complexity, and cognitive simula-
tion, topics that have developed over the last half-century, especially within information technologies, thus enabling cognitive
computing.
We foresee a strong alignment of cognitive computing with S-D logic, through service ecosystems, that will increasingly include
many smart service systems. Smart service systems are a type of sociotechnical system, in which cognitive assistants/mediators
become resources to obtain and provide service. This presents an opportunity for marketing and other behavioral scientists to use
behavioral decision labs to study how cognitive assistants/mediators improve or weaken individual and group choice and deci-
sions. In addition, we expect that researchers in neuroscience and neuromarketing (Lee, Broderick, & Chamberlain, 2007;
Reimann, Castano, Zaichkowsky, & Bechara, 2012; Zurawicki, 2010) will begin to study (1) how cognitive assistants/mediators
alter brain activity and influence a host of marketing phenomena, such as brand choice, value assessment, and new service (“prod-
uct”) adoption, as well as (2) the behavior and decision-making of marketing managers (and other actors), who will increasingly
rely upon cognitive assistants/mediators for marketing analytics and decision support. The rapidly developing area of cognitive
computing motivates the following salient research question: will cognitive assistants/mediators, such as WATSON, as they become
part of smart service systems, improve or hinder decision-making of marketing personnel and consumers?
10.3. Big data
Big data (also known by other names)—large, often difficult to analyze datasets generated in the course of business —have been
key sources of information for marketing analytics. The study of big data has continued to evolve (Chen, Chiang, & Storey, 2012)
from several decades ago, when it was primarily based on database management systems, which analyzed structured content
within the organization. In marketing, this led to the development of CRM tools and applications, including the modeling of life-
time shareholder value with predictors, such as advertising, research and development and brands. Approximately 15 years ago,
big data analytics began to include web-based unstructured content analyzed with text and web analytics. This enabled firms to
interact directly with customers and use cookies, allowing organization to gather data to understand customer preferences and
needs. It also ushered in the analysis of user-generated content and social media that were then analyzed with computational lin-
guistic tools to capture sentiments.
Currently a third era of Big Data is emerging (Chen et al., 2012), primarily facilitated by the global rise in smart phones and
tablets replacing less-mobile computers. Further bolstering this era will be the Internet of Things (IoT) and embedded systems.
We find this era very well aligned with S-D logic because it enables, through data analytics, a new breed of enterprises that
adapt to and create system dynamics (Zeng & Lusch, 2013). In brief, Big Data allows for real-time data capture of actor-centric be-
havior using mobile and sensor-based content through advanced analytics (e.g., network analytics, text analytics, nonlinear dy-
namic modeling) and a host of computational tools (such as genetic algorithms, fuzzy logic, neural networks and agent based
modeling). Thus a salient research question is: how can Big Data be used to capture actor centric behavior and provide the means
to calibrate nonlinear, dynamic models of market actors (e.g., suppliers, firms, customers) in a service ecosystem?
10.4. Macromarketing
The focus in marketing on marketing management and consumer behavior has largely overtaken marketing thought during the
last several decades (Lusch, 2007; Wilkie & Moore, 2003). There are virtually no doctoral seminars, MBA courses and undergrad-
uate courses on macromarketing, marketing phenomena viewed from a macro level of aggregation. Seldom do doctoral students
pursue dissertations in this area and the major journals are almost void of related content. The record in Europe is a bit better.
Recently a clear signal of the general lack of concern for macromarketing is evident in the complete absence of the broader envi-
ronment and context within which firms function in the "Big 7 Intellectual Challenges" identified by the leadership of the
American Marketing Association (AMA, 2016) (https://www.ama.org/publications/MarketingNews/Pages/7-big-problems-
marketing.aspx, accessed on May 10, 2016).
S-D logic presents a framework that can inform macromarketing theory and research. Opportunities around ethics, environ-
mental sustainability, social sustainability and public policy are plentiful. We offer a few thoughts.
10.4.1. Ethics
Service and S-D logic can contribute to a normative framework for marketing and business (Abela & Murphy, 2008; Vargo &
Lusch, 2008). S-D logic and its foundational premises have been shown to be consistent with an integrative justice model. This
provides multinational corporations (MNCs) focusing on fast growing markets such as China, India, and Brazil with guidelines
for operational practices that help fairly allocate the benefits and burdens among many actors and stakeholders (Laczniak &
Santos, 2010). Others have suggested that the concept of service, with its implicitly ethical connotations, can bridge to higher-
order ethical principles, so they can generate better business practice (Guitian, 2015). Arguably, there are a host of contemporary
business issues, such as information privacy, artificial intelligence, cognitive assistants, and rights of various stakeholders, for which
S-D logic inspired midrange theories coupled with evidence-based research may prove helpful. In that regard, the study of busi-
ness ethics from an S-D logic perspective would need to incorporate the institutions and institutional arrangements that help to
massively coordinate actors in the service ecosystem and society. For instance, some business practices may be considered ethical
or unethical depending upon the institutional framework within which they are nested. Thus changes in ethical practices may re-
quire institutional innovation. This would be a meaningful and valuable area of study, as more nations move to more market based
economies but are still coordinated by institutions put in place for a different type of economy. A salient research question is: can
S-D logic and institutional theory be used to investigate the process and types of institutional innovation that could foster ethical decision
making?
10.4.2. Environmental sustainability

In our initial contribution (Vargo & Lusch, 2004a), we briefly discussed the work of Malthus (1798) and his predictions about
how population growth would soon outstrip resources. Today, we still face that debate, coupled with more than 200 years of ad-
ditional data that shed light on the potential vulnerability of natural resources. We also witness the impact of a much larger global
population and many more nations moving toward economic development and using more natural resources. Some of this has
been mitigated by technology (i.e., applied operant resources), which has expanded the usable supply of resources, such as petro-
leum. However, we are seeing more recognition by nations and businesses that they need to be proactive in creating business
practices that are environmentally sustainable. S-D logic, with its focus on service ecosystem viability and resiliency, can be
used as an informative and robust framework for environmental sustainability. An area that we have suggested for particular
focus is ecosystem service(s) (Lusch & Vargo, 2014). An interdisciplinary team (Matthies et al., 2016) recently developed a frame-
work by integrating practices into a service ecosystem, S-D logic approach. We encourage more collaboration with biologists and
zoologists, as well as other scientists on environmental sustainability. This line of thought leads to another salient research ques-
tion: how can S-D logic and ecosystem service(s) be used to advance environmental sustainability?
10.4.3. Social sustainability

Over the last decade, we have witnessed increased discussion about issues of social sustainability and the extent to which so-
cieties, based on different ways of organizing, exchange. S-D logic, with its dynamic, service ecosystems and level-of-aggregation
(i.e micro, meso and macro) lens, reveals an evolutionary history and evolving future. Furthermore, S-D logic embraces a multiple
stakeholder orientation (Frow & Payne, 2011; Lusch & Webster, 2011), which might enable a better recognition of both negative
and positive externalities that influence social sustainability. Finally, S-D logic, with its focus on the role of institutions and insti-
tutional arrangements in coordinating diverse human actors, might provide additional guidance for addressing many of these is-
sues. It might also be used to facilitate the evaluation of numerous government proposals that are being offered around the globe.
An S-D logic inspired inquiry into social sustainability also represents an opportunity for evidence-based research, as noted.
There are many natural experiments on issues such as the differential impact of various exchange and governance systems,
which could be used to examine the viability and performance of these systems—for example, comparisons of El Paso, Texas
and Juarez, Mexico or North and South Korea. There are also opportunities for within-country studies, contrasting cities as the
“units” of comparative analysis or, more broadly, between cities across the globe. Application of ecological theory, including
human ecology, might inform our understanding of these cross-sectional and longitudinal variations between and among cities,
based on a host of factors that influence social sustainability. Examples of useful data are new business startups, patent filings,
amount and dispersion of household incomes as well as income mobility, education levels, health and crime, tax rates of all
forms, employment growth, etc. This suggests another salient research question: how can S-D logic, informed by ecological theory
be used to understand issues of social sustainability?
10.4.4. Public policy

There are a host of public policy issues emerging in society, for which traditional legal standards based on G-D logic —defini-
tions of markets, focused on products and views of firms in terms of dyadic transactions, rather than extended networks of rela-
tions or value constellations— are ill equipped to inform. These issues bring forth a variety of questions, such as where does legal
liability fall for a market offering; whom is responsible when value propositions are coproduced among firms, suppliers and cus-
tomers; where does fault lie if an actor makes poor decisions using cognitive assistants/mediators; and what role do (should) gov-
ernments play in fostering institutions and institutional arrangements in global service ecosystems that stretch across many
geopolitical areas?
Additionally, most nations have anti-competition/antitrust policies. We believe that S-D logic can add substantially to the re-
finement of these policies, since existing frameworks define markets in terms of product form. S-D logic focuses on flows of service
and also resource-integrating, value-cocreating practices. This implies that, rather than just compete, firms typically collaborate
with other firms—what is known as “coopetition” (Nalebuff & Brandenburger, 1996)—to offer more compelling value propositions,
often in the development of new forms of service solutions. This cooperation is often considered anticompetitive and thus incon-
sistent with current ways of seeing marketing, and actual practice. Increasingly, scholars and public policy makers are understand-
ing markets from a network and ecosystems perspective (Moore, 2006), implying the need for change in public policy. Research in
this direction can also benefit from an S-D logic inspired theory of the market and value cocreation (see earlier section on this
topic) and possibly of the economy. This argues for attention to the question: how might public policy be modified to be come
more beneficial to society by encouraging collaboration and coopetition among firms in national and global service ecosystems and
what governance (institutional) safeguards would be necessary?
11. Concluding comment
A theory of the market has implications that extend far beyond the focus of marketing, at least as the latter is traditionally con-
ceived. In this view, marketing is seen as one of the social sciences, occupying a small corner of the domain called economics and
business. However, from an S-D logic perspective, it is potentially much more. That is, if understood in its broadest sense, market-
ing is about creating value, through exchange, rather than as the techniques of the marketing department of a firm. From this per-
spective, value cocreation becomes the purpose of society, rather than a subset of social activity. That is, it could be argued as much
that society exists to support the "market", broadly conceived, as it could be argued that the market exists to support society—the
former is no doubt one of several potentially disquieting implications of S-D logic, but what other purpose does society have be-
sides value cocreation?
Much of the impetus for these kinds of implications of S-D logic comes from the addition of institutional thought to the S-D
logic narrative (Vargo & Lusch, 2016). We have been discussing the critical importance of the service-for-service nature of value
cocreation for the last 10 years and will not repeat that here. However, when the generative nature of resource integration is com-
bined with the generalizability and scalability of institutionalization, the theoretical potency of all three orientations is increased.
We have noted Alderson's (1957) pronouncement concerning “a marketing interpretation of the whole process of creating utility,”
and S-D logic's potential for contributing toward that end. However, Alderson's comment has implications that extend far beyond
marketing, to business and economics, and potentially to society, as noted. Similarly, though a political scientist, Nobel Laureate
Ostrom (2005) inquired:
Can we dig below the immense diversity of regularized social interactions in markets, hierarchies, families, sports, legislatures,
elections, and other situations to identify universal building blocks used in crafting all such structured situations…to build use-
ful theories of human behavior in the diverse range of situations in which humans interact? Can we use the same components
to build an explanation for behavior in a commodity market, as we would use to explain behavior in a university, a religious
order, a transportation system, or an urban economy?
Her answer was “yes” and her universal building blocks were institutions. We agree on both counts and suggest that the S-D
logic narrative, inclusive of institutions, has the potency to morph into not only a theory of the market, contributing to a theory of
marketing, but also to a general theory for social science.
S-D logic is still in its infancy, yet it has, arguably, already developed from a framework to a narrative of near-theory status. It
has outgrown its marketing-specific focus to gain business and economics-wide, if not societal, relevance and applicability. It has
also moved from obscurity to one of the most cited literature streams in business. As noted, if one were to have asked us in 2004
where S-D logic would likely be in 10 years, we would have missed in our predictions in almost every regard. Despite this reso-
nance and development of additional structure, the task of looking into the future is not simpler now than it was 10 years ago. In
part, this is, consistent with the dictates of S-D logic, due to its own cocreated and emergent nature. Thus, its continued emergence
is not only unknown but also unknowable.
What we can point to, however, are the directions in which it seems to be headed: (1) toward a cohesive general theory (2) to-
ward more specific, empirically testable and practically applicable, midrange theory and (3) toward expanded influence, both from
and on, diverse disciplines and research streams, (e.g., institutional theory, practice theory, systems theory) and emerging micro-
level research initiatives (e.g., omni-channels, effectuation theory, reconfiguration theory). We also can be sure that most of this
work will not be done by us, but rather by the increasing number of scholars who seem to be finding the S-D logic perspective
useful to their work and desire to contribute. As always, all are welcome.
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International Journal of Research in Marketing 34 (2017) 46–67

Contents lists available at ScienceDirect

Full Length Article

Service-dominant logic 2025

2. The emerging S-D logic narrative

Axiom 1/FP1 Service is the fundamental basis of exchange

2.1. Foundations, bifurcations, and conceptual turns

2.2. Zooming out: from resource application to resource integration

2.3. Bridging to the future

2.3.1. Service ecosystems

2.3.3. Further exploration of bridging concepts

3. Levels of abstraction and aggregation

4. Toward midrange theories

Fig. 2. The recursive research process.

5. Toward an integrative framework for midrange theory development

6.1. Solving tensions and paradoxes

6.2. Conceptual inversions

6.4. Reframing and reconciliation

6.5. Evidence-based research

7.1. Source of input: metatheory

7.1.1. The institutional perspective

7.1.2. Practice theory

7.1.3. Systems and ecosystems theory

7.1.4. Complexity theory and complexity economics

7.1.5. Evolutionary theory

7.2. Sources of input: existing midrange theory

7.3. Source of input: practitioner observation

8. Ongoing S-D logic midrange theory development: vectors of diffusion

Marketing subﬁeld Focus/implications Reference

8.1. Vectors of diffusion within marketing

Application ﬁeld Focus/implications References

8.2. Transdisciplinary vectors of service-dominant logic diffusion

9. Toward a general theory of the market

10. Research Frontiers

10.1. Dynamic strategy development and implementation

10.2. Market, economy and complexity economics

10.2.1. Market and economy

10.2.2. Complexity economics

10.2.3. Cognitive computing

10.3. Big data

10.4.2. Environmental sustainability

10.4.3. Social sustainability

10.4.4. Public policy

11. Concluding comment

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