The goods-dominant model of customer value involves a ratio of benefits received in exchange for sacrifices given. Service-dominant logic suggests a different view with the idea that all value is co-created by the customer. But value measurement challenges persist, and definitions of co-creation vary. These problems arise, in part, because goods-dominant thinking about value is largely set aside in the application of SD logic. Yet, the classic goods-dominant customer value model can be blended, joined, and advanced with theoretical principles from SD logic such as co-creation.
Firms no longer rely on simple product quality improvements or additional service benefits to increase value with their offerings. Additionally, they must support direct value creation through co-creative platforms. But how does co-creation interact with benefits and sacrifice in the formation of customer value? What is the magnitude of the impact on customer value from co-creation relative to benefits and sacrifice? This paper suggests a framework to explore and extend the classic customer value model with the inclusion of a co-creative component. Research propositions within the context of lateral exchange markets suggest how benefits, sacrifice, and this third component work together to increase customer value.
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Merkle, Adam, "Best of Both Worlds: Blending Logic to Expand the Customer Value Model" (2019). Association of Marketing Theory and Practice Proceedings 2019. 9.