Co-creation, co-production and co-design in Service Dominant Logic

As most people who will find they way here will now, co-creation is one of the big things in service design. As service design thinking gets more and more inspired by service dominant logic, service designers will however find themselves facing a new use and meaning of the term co-creation. In discussing the issue with various people of the past year or so, I found that there is a need for clarification of the various meanings of the term co-creation.

Below is a sub-chapter to an article which never was finished (nor will be) in which I aimed at exploring how the terms co-creation, co-production and co-design are used within the service dominant logic framework. It is written in academese, but hopefully it can still be helpful anyway.

The notion that services are created and consumed in the same moment has been highlighted within service management since the early 1980s. This fact was seen as one of the fundamental traits which separated services from products as stated in the IHIP-framework (intangibility, heterogeneity, inseparability of production and consumption, perishability) as formulated by Zeithaml, Parasuraman, & Leonard (1985): 
 
“Inseparability of production and consumption involves the simultaneous production and consumption which characterizes most services. /../ Since the customer must be present during the production of many services (haircuts, airplane trips), inseparability “forces the buyer into intimate contact with the production process” (Cwami and Langeard 1980, p. 8).” (Zeithaml, Parasuraman, & Leonard, 1985, pp. 33-34) 
 
As service management has evolved the importance given to the joint production of a service between customer and company has only increased. In the current leading school of thought, the service dominant logic (S-D logic), this was originally formulated as one of the original eight foundational premises (FP) in the form of: 
 
“FP6: The customer is always a coproducer.” (Vargo & Lusch, 2004, p. 10) 
 
S-D logic has had a huge impact on service marketing, and four years after discussion on the implications of it and the formulations of the FPs the authors Vargo & Lusch published an updated and expanded version of their original list of foundational premises in which FP6 had been reformulated as follows: 
 
“FP6: The customer is always co-creator of value.” (Vargo & Lusch, 2008, p. 7) 
 
The main change in this context is that Vargo & Lusch changed from using the word co-producer to co-creator. Their argument for doing so is: 
 
“Clearly, S-D logic is primarily about value creation, rather than “production,” making units of output. The emphasis was intended to be on the collaborative nature of value creation, but that emphases could easily become lost in the connotations of “production.” Because the distinction between co-creation of value and co-production is critical to the S-D logic thesis, we changed FP6 to refer to co-creation the first time we had a chance.” (Vargo & Lusch, 2008, pp. 7-8) 
 
That is, co-creation for Vargo & Lusch deals with the notion that customer and employees jointly create the value which the service delivers to the customer. Vargo & Lusch (2008) do however not completely discard the term co-production, rather they view it as being a part of co-creation – in the form of the customer being a part of developing the underlying processes of the service. They hold this to be extra relevant when goods are used as a part of the value-creation (Vargo & Lusch, 2008). Co-production “can occur through shared inventiveness, co-design, or shared production of related goods, and can occur with customers and any other partners in the value network” (Lusch & Vargo, 2006, p. 284). 
 
To summarize, Vargo & Lusch use three different co-terms in a hierarchical order to define how a service is delivered. Stakeholders can be involved in co-designing the service structure – especially the goods used in the service delivery – as a part of co-production of the service system. This co-production of the system provides the fundament on which the customer and employee jointly co-create the value of service as it is delivered and used.

As you can see, the terms co-creation and co-production thus have inverted meaning in the service dominant logic context compared to in a service design context.

References

Lusch, R. F., & Vargo, S. (2006). Service-dominant logic: reactions, reflections and refinements. Marketing Theory, 6(3), 281–288.
Vargo, S., & Lusch, R. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1-17.
Vargo, S., & Lusch, R. (2008). Service-dominant logic: Continuing the evolution. Journal of the Academy of Marketing Science(36), 1-10.
Zeithaml, V. A., Parasuraman, A., & Leonard, L. B. (1985). Problems and Strategies in Services Marketing. Journal of Marketing, 49(2), 33-46.

The three Vargo & Lusch ones are available for download through http://sdlogic.net/publications.html, the Zeithaml et al one through a Google Scholar search.