How is a Service Based on Service-dominant Design Superior to Goods-dominant Design?

Abstract

Research suggests that service-dominant designs are superior to goods-dominant, but why? Few empirical studies have been conducted to explore the mechanisms and drivers of service exchange and value co-creation resulting in favorable customer experiences. This paper attempts to bridge that knowledge gap. Our aim is to answer two questions: (1) How is a service based on service-dominant logic (SDL) superior to one based on goods-dominant logic (GDL)? (2) Which aspects of the service system facilitate the co-creation of value-in-context as perceived by the customer? An experiment was carried out with a group of habitual bus travelers to plan a specific journey using two online journey planning systems, one representing a GDL informed service and the other SDL. Quantitative and qualitative data were gathered regarding the subjects' perceived experiences with the two systems. The SDL informed service system offers a better experience due largely a consequence of three key differentiators. Our principal findings thus help to establish the empirical foundation for SDL and to identify the characteristics and behaviors that set the SDL-based service system apart from the GDL-based system.