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Service dominant logic (SDL), a predominant stream of marketing and service literature, defines service “as the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself” (Vargo & Lusch, 2004, p. 2), and moreover, service is exchanged for service (Lusch & Vargo, 2015). Within SDL, it should be noted that value in service offering is always co-created in which value is understood as value-in-social context, rather than value-in-use in a traditional way (Chandler & Vargo, 2011). Additionally, while value co-creation is recently ranked top priority in marketing and service research (Ostrom et al., 2015), consumer co-creation in service process is imperative for firms to advance and sustain their competitive advantages in practice (Bettencourt et al., 2014).
Equally, according to Vargo & Lusch (2016), one of SDL foundational premises is that service offerings are in large part determined by co-creation practice of consumers who are in turn considered as (economic and) social actors and resource integrators. To be specific, co-creation is active participation into service development and delivery, which both involves the combination and exchange of resources of all parties and is of socially contextual nature (Lusch & Vargo, 2015). It should be first noted that within SDL, resource can be anything, tangible or intangible, which service provider or consumer would make use for service offering (Vargo & Lusch, 2004).
Furthermore, there are three interrelated highlights of co-creation theme within SDL, which are of main interests for our study: first, service is inherently consumer oriented, co-created and relational; second, all (economic and) social actors are resource integrators; and additionally, operant resources (like knowledge, skills, relationships, competency, etc) are increasingly important for firms and consumers to co-create value; and third, value is experiential and socially contextual (Lusch & Vargo, 2015). To address these interests, we adopt a consumer view to develop our co-creation model which includes social capital and social exchange as antecedents and perceived value, satisfaction and loyalty as outcomes.
There were two reasons for our choice of all these constructs. First, being sorts of intangible asset and essentially social relationships, social capital and social exchange could be regarded as the typical operant resources within SDL (see Varo & Lusch, 2004), and hence, deserves to be the determinants of consumer co-creation behaviors. To be quite clear, these two dynamic assets could be featured as relational, experiential and socially contextual (as elaborated below), and thus to fully meet the highlights mentioned above.
Second, perceive value, satisfaction and loyalty are key relevant outcomes of consumer participation (Mustak et al., 2013), which are also believed to be crucial for service business to achieve strategic advantage (Bettencourt et al., 2014).
Toward our objective of an empirical validation for a comprehensively theoretical framework of co-creation, our study makes three key contributions. First, while outcomes of co-creation increasingly gain much attention in recent studies (see, e.g. Prebensen et al., 2017; Navarro et al., 2016), the literature considering its relevant determinants is relatively scare, and little research empirically examines these constructs in a single framework, possibly except Grissemann & Stokburger-Sauer’s (2012). To bridge this gap in literature, our model of co-creation accommodates both its antecedents (i.e. consumer social capital and social exchange) and its effects (i.e. perceived value, satisfaction and loyalty).