Journal of Services Marketing

Extending the context of service: from encounters to ecosystems

Melissa Archpru Akaka Stephen L. Vargo
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Melissa Archpru Akaka Stephen L. Vargo , (2015),"Extending the context of service: from encounters to ecosystems", Journal of
Services Marketing, Vol. 29 Iss 6/7 pp. 453 - 462
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 Extending the context of service:
from encounters to ecosystems
Melissa Archpru Akaka
Department of Marketing, University of Denver, Denver, Colorado, USA, and
Stephen L. Vargo
Department of Marketing, University of Hawaii at Manoa, Honolulu, Hawaii, USA

Abstract
Purpose – The purpose of this paper is to extend conceptually the context of service beyond service encounters and servicescapes by applying a
service-ecosystem approach to context and experiential view on value.
Design/methodology/approach – We develop a conceptual framework of an extended service context that is based on an S-D logic,
service-ecosystems view.
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Findings – The service ecosystem approach proposed here contributes to the advancement of “services” marketing research by extending the
context of service in two ways: its emphasis on service as the basis of all exchange allows the consideration of all instances of value-in-use,
in-context, to be considered as a service experience; its conceptualization of context broadens the time/place dimensions that conventionally restrain
research in service encounters and servicescapes beyond physical, social, symbolic and relational dimensions to consider the multiplicity of
institutions across a wider socio-historic space.
Research limitations/implications – This paper offers a broad conceptual framework for considering an extended view of service context. Future
research is needed, both conceptual and empirical, to identify more specific components of service context and how they influence evaluations of
experience.
Practical implications – Extending the scope of service context draws attention to the participation of customers and other actors in the
co-creation of the service context, as well as the experience. This points toward the need to consider the competences and skills of customers as
well as their socio-historic perspective in the design and development of a servicescape or more specific service encounter.
Originality/value – We offer a dynamic perspective of service context to help further the reach of services marketing research by extending the
context of service across a variety of exchange encounters and pointing toward institutions as a central influence on phenomenological views of
experience.
Keywords Co-creation, Context, Service ecosystem, Institutions, Service-dominant logic, Service experience
Paper type Conceptual paper

1. Introduction the marketing of services and goods (e.g. Vargo and Lusch,
2004b). In 2003, a study featuring a panel of distinguished
The study and practice of “services” marketing was born out
services marketing experts raised some important issues
of the need to understand and deal with “unique” market
regarding the foundations of the field (Grove et al., 2003).
offerings that are not effectively explained by goods-centered
This research, published in the Journal of Services Marketing,
models (Judd, 1964; Rathmell, 1966; Shostack, 1977). These
suggested that:
distinctions have helped to highlight dynamic aspects of
exchange the nature of services – e.g. products that are [. . .] many among [the] panel expressed concern that the term “services
marketing” may be too limiting and observe[d] that the service versus goods
intangible, heterogeneous, inseparable and perishable (IHIP) distinction may be obsolete as a means of directing attention to the nature
(Zeithaml et al., 1985); as well as direct interactions between of services (Grove et al., 2003, p. 115).
firms and customers (e.g. Gummesson, 1987) – and the Since then, work has been done to extend the scope of service,
context within which service occurs – e.g. service encounters beyond distinguishing characteristics of services and goods, as
and servicescapes (Bitner, 1990, 1992). Although the well as direct interactions between firms and customers. In
distinguishing characteristics of services (verses goods) have particular, more recent conceptualizations of service
helped services marketing into a mature sub-discipline, emphasize experiential views on value, which points toward
questions have been raised regarding apparent differences in service as the basis of all exchange (e.g., Maglio and Spohrer
2008; Vargo and Lusch 2004; 2011).
Consider two people having dinner in a restaurant. One
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new things to eat. The other person grew up eating a limited
variety of foods and has reservations about tasting new things.

Journal of Services Marketing

29/6/7 (2015) 453–462 Received 24 March 2015
© Emerald Group Publishing Limited [ISSN 0887-6045] Revised 16 May 2015
[DOI 10.1108/JSM-03-2015-0126] Accepted 21 May 2015

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 Extending the context of service Journal of Services Marketing
Melissa Archpru Akaka and Stephen L. Vargo Volume 29 · Number 6/7 · 2015 · 453–462

The service encounter – interaction between the customer and and Lusch, 2004a). The underlying premise of S-D logic is
the firm – for each person will likely lead to different outcomes that service – the application of competences for the benefit of
because of their past experiences and preferences, as well as another – is the basis of all exchange. It is important to note
potential differences with employees (Bitner, 1990; that the S-D logic conceptualization of service distinguishes
Surprenant and Solomon, 1987). In addition, the servicescape – between service (singular) as the application of resources for
physical and social surroundings of this encounter (Bitner, the benefit of another and services (plural) as particular types of
1992; Rosenbaum and Massiah, 2011) – will also influence market offerings with unique characteristics (e.g. IHIP)
each customer’s experience differently (e.g. one person likes (Vargo and Lusch, 2008). This is an important distinction
the décor and presence of other customers and the other because an S-D logic conceptualization of service (singular)
person does not). Thus, restaurant settings have been helps to broaden the context of service, as opposed to services
generally classified as service contexts, based on the (plural), research to include all interactions that underlie
distinguishing features of services mentioned above. social and economic exchange. Rather than focusing on
Now, imagine if these same two people purchased a specific value-in-exchange, or the price paid for something, S-D logic
frozen meal produced by the same restaurant. It is quite likely redirects attention toward value-in-use, or a market experience
that each person will still have a unique experience due to (Holbrook, 2006), in a particular context – i.e. value-in-context
differences in preferences as well as past experiences and (Vargo et al., 2008). In other words, an S-D logic view focuses
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socio-historic, institutional structures that frame a particular on value as phenomenological and contextual, which points
experience (Akaka et al., 2015). In fact, the latter scenario may toward the centrality of customers’ perspectives and
offer more variation than the first because depending on the participation in value creation (i.e. value co-creation). Over
customers’ ability to cook, the experiences may be completely the past decade, S-D logic has been developed, revised and
different. Although the restaurant encounter would be extended through the participation of a growing number of
classified as a service context, generally, the frozen meal services marketing (and other) scholars and their various
encounter would not. This is because focusing on products research interests (see Lusch and Vargo, 2014).
(services versus goods) highlights differences in terms of IHIP The ongoing development of S-D logic has extended an
characteristics and direct/indirect interaction between firms array of service-related research and highlights the importance
and customers. Alternatively, focusing on experiences, rather of understanding IHIP aspects of exchange (Zeithaml et al.,
than the products, draws attention toward phenomenological 1985) as well as interaction (Gummesson, 1987) and
perspectives of experience and the social structures that relationships (Grönroos, 1995) in value creation. However,
influence them (Akaka et al., 2015). This makes it clear that S-D logic’s conceptualization of service extends the context of
any “type” of encounter offers opportunities to uniquely service beyond specific types of exchange encounters to that
co-create value. which frames all exchange encounters (Vargo et al., 2008).
The purpose of this paper is to extend conceptually the Furthermore, recent research regarding service ecosystems
context of service by drawing on a dynamic service-ecosystems extends the foundational premises of S-D logic (see Lusch and
approach to context and an experiential view on value (Vargo Vargo, 2014) and underscores the complexity of the context
and Lusch, 2008). This broad, systemic approach is grounded that frames value creation, as well as exchange (Akaka et al.,
in an evolving service-dominant (S-D) logic (Vargo and 2013). For example, rather than focusing on the co-creation of
Lusch, 2004a, 2004b, 2008) and points toward the context of value as direct firm/customer interactions (e.g. Grönroos and
service as a complex and dynamic social and economic system, Voima, 2013), a service ecosystems approach considers the
composed of networks of actors and the institutions that guide direct and indirect interactions of multiple actors in value
them (Akaka et al., 2013; Chandler and Vargo, 2011). In this co-creation. More specifically, this approach emphasizes the
view, interactions among different actors are influenced by importance of socio-historic contexts of value creation by
socio-historic structures, or institutional arrangements – considering how aggregated levels (i.e. micro, meso and
interrelated sets of institutions (e.g. norms, meanings, macro) of interaction and institutions influence experience
symbols, etc.) – and value is uniquely experienced and (Akaka et al., 2015; Vargo et al., 2015).
phenomenologically determined (Akaka et al., 2015). Based As noted, the aim of this article is to contribute to a deeper
on this, we argue that the context of service is not limited to understanding of the nature of service context; how it
specific “types” of encounters or physical and social spaces. dynamically frames the creation of value and evaluation of
Rather, the context in which service emerges and value is experience. To this end, we develop a conceptual framework
(potentially) created might (or might not) involve the of an extended service context that is based on an S-D logic,
exchange of goods (i.e. tangible products), and is nested service-ecosystems view. We first explore the context of
within broader social and cultural structures (i.e. institutional service by discussing the literature regarding service
arrangements) and dynamic systems of service-for-service encounters, servicescapes and service ecosystems. We then
exchange. In short, S-D logic provides an alternative highlight the experiential nature of value by discussing prior
framework to address concerns that have been raised by research that establishes a phenomenological conceptualization
services marketing scholars regarding: the nature of services, of service experience (Helkkula, 2011; Helkkula et al., 2012). We
the scope of services and services and value creation (Grove align a service ecosystems view of service context with a
et al., 2003). phenomenological view of service experience and draw
The foundational premises of S-D logic were introduced in attention toward how institutions influence and are
the marketing literature in 2004 as an alternative perspective influenced by service experiences; how both context and
for considering how value is created through exchange (Vargo experience are co-created. We conclude with a discussion of

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Melissa Archpru Akaka and Stephen L. Vargo Volume 29 · Number 6/7 · 2015 · 453–462

the implications of a systemic approach to service context In the short run, [service encounters] are the social occasion of economic
exchange in which society allows strangers to interact [. . .] In the long run,
and directions for future research. encounters provide the social occasions in which buyer and seller can
negotiate and nurture the transformation for their accumulated encounters
into an exchange relationship.
2. Extending the context of service
This research draws attention toward particular outcomes,
The context of service is a central feature of service research. such as customer satisfaction (short-term effects) and
As mentioned, service has been traditionally distinguished as firm-customer relationships (long-term effects) (Czepiel,
having particular characteristics, such as intangibility, 1990). One is directly related to the other – i.e. customer
inseparability, heterogeneity and perishability (Zeithaml et al., satisfaction leads to long-term relationships and, arguably,
1985), as well as direct interactions among firms and long-term relationships increase satisfaction. In short, the
customers (e.g. Gummesson, 1987). However, questions have consideration of service encounters as a primary context of
been raised regarding the usefulness of the distinction between service focuses on dyadic interactions (short- or long-term)
services and goods (e.g. Grove et al., 2003; Vargo and Lusch, between firms and customers that are influenced by peripheral
2004b). In this section we review conventional approaches to phases and actors (e.g. other customers), which, in turn,
conceptualizing service context – i.e. service encounters and influence satisfaction with a particular core service offering.
servicescapes – and offer a broader service-ecosystems
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approach to transcend the services verses goods distinction

and provide a more dynamic and inclusive perspective of 2.2 Servicescapes
service context. Shortly after research on service encounters began, the context
of service was extended to investigate the servicescapes (i.e.
physical and social spaces) that frame service encounters
2.1 Service encounters (Bitner, 1992). Bitner (1992) provides a typology of
Early in the development of services marketing, the servicescapes – self-service, interpersonal services and remote
“inseparable” (Zeithaml et al., 1985) and “interactive” services – to highlight differences in the level of importance of
(Gummesson, 1987) qualities of service resulted in a stream of aesthetics of physical spaces and their influence on both
research focused on studying service encounters. Bitner (1990, employees and customers. In particular she argues:
p. 69, emphasis in original) argues that “in many cases, those
[. . .] in interpersonal servicescapes, special consideration must be given to
discrete encounters are the service from the customer’s point the effects of the physical environment on the nature and quality of the social
of view”. Surprenant and Solomon (1987, p. 87) state: interaction between and among customers and employees (p. 58 emphasis in
original).
The service encounter is a dyadic interaction between a customer and a
service provider. The nature of this interaction has been recognized to be a Importantly, Bitner (1992) extends the context of service
critical determinant of satisfaction in the service (cf. Czepiel et al., 1985). beyond the firm/customer interaction to consider the
In other words, the service encounter represents the context in “environment-user” relationship, and how it influences
which service is exchanged between a firm and a customer and satisfaction in service exchange.
satisfaction/dissatisfaction is determined. Although Bitner’s (1992) conceptualization of servicescapes
As interest in service encounters grew, studies began to largely focused on man-made, physical aspects of the
explore the roles (of firms and customers) in direct environment, the literature regarding servicescapes has since
interactions, as well as the expectations of exchange associated been extended beyond physical environments to include
with those roles (e.g. Arnould and Price, 1993; Solomon et al., symbolic, natural (e.g. Arnould et al., 1998; Rosenbaum and
1985). Scholars also began investigating the emotional Massiah, 2011), and social surroundings (e.g. Johnstone,
responses of customers (Johnson and Zinkhan, 1991) and 2012; Tombs and McColl-Kennedy, 2010). Arnould et al.
multiple phases within a service encounter – e.g. peripheral (1998, p. 90) explicate the relationship between service
service performance, core service performance and post-core encounters and servicescapes by suggesting “we can think of
service peripheral performance (Walker, 1995) – that servicescapes as nested products of managerial strategies and
influence satisfaction. Furthermore, the evaluation of service customer inputs”. In other words, servicescapes are “staged”
encounters has been extended to investigate how the presence environments that are constituted by both firms’ and
of and interactions with other customers influence the overall customers’ resources and perspectives. Arnould et al. explain
service experience (Davies et al., 1999; Kim and Lee, 2012). that substantive (i.e. physical creation of contrived
However, even though these social interactions might be environments) and communicative (i.e. how the environment
studied in a particular instance (Surprenant and Solomon, is presented or interpreted) staging make up the service
1987) or may occur over time and space (Arnould and Price, context that is the servicescape.
1993), they are generally focused on “the direct interaction Tombs and McColl-Kennedy (2003) add to the physical
between a customer and service provider” (Surprenant and and symbolic context of service to include a
Solomon, 1987, p. 87). “social-servicescape” as well. In their view, the context of
Importantly, this stream of research generally centers on service centers on the purchase occasion, which is based on
understanding how service encounters influence satisfaction the idea that “within a specific interval of time and space,
(e.g. Bitner, 1990; Bitner et al., 1990; Surprenant and certain behaviors are expected regardless of the individual’s
Solomon, 1987) and, subsequently, lead to the development personality or recent experiences” (p. 459). In this way,
of long-term relationships (e.g. Czepiel, 1990; Gummesson, service encounters are a central aspect of servicescapes
1987). Czepiel (1990, p. 13) recognized that these because the time/place component of interaction is a critical
interactions have both short- and long-term effects: feature of service experience. However, in addition to the

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 Extending the context of service Journal of Services Marketing
Melissa Archpru Akaka and Stephen L. Vargo Volume 29 · Number 6/7 · 2015 · 453–462

purchase occasion, Tombs and McColl-Kennedy (2003) also More specifically, S-D logic points toward the need to
recognize the influence of social density (e.g. crowding of consider multiple actors that directly and indirectly contribute
people) on evaluations of service experience. In a later study, to value creation (Vargo et al., 2008) and the multiplicity of
the authors recognize that the indirect interactions among institutions that frame the evaluation of experience, and the
customers influence the quality of a servicescape as well co-creation of value (Akaka et al., 2013).
(Tombs and McColl-Kennedy, 2010). However, this social
context is largely tied to the physical space within which a
2.3 Service ecosystems
service occasion (i.e. service encounter) occurs.
Recent discussions regarding service ecosystems (Vargo and
Moving beyond physical and time/space dimensions,
Lusch, 2011) help to build on and extend this intersection of
Rosenbaum and Massiah (2011, p. 481) include socially
servicescape and S-D logic (Nilsson and Ballantyne, 2014).
symbolic and natural dimensions in their conceptualization of
Service ecosystems have been defined as “relatively
servicescapes. The authors propose that:
self-contained, self adjusting system[s] of resource-integrating
[. . .] the socially symbolic dimension extends Bitner’s work by suggesting actors connected by shared institutional arrangements and
that a consumption setting also contains signs, symbols, and artifacts that
are part of an ethnic group’s symbolic universe and possess specific, often mutual value creation through service exchange” (Lusch and
evocative meanings for group members. Vargo, 2014, p. 161; Vargo and Lusch, 2016). In this view,
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Moreover, they argue that the “natural dimension moves the context of service, as well as value co-creation, is socially
Bitner’s work into public health by showing how a constructed through the exchange and application of operant
servicescape may possess restorative qualities”. In addition, resources (e.g. knowledge and skills) among multiple actors.
Johnstone (2012) further investigates the social aspects of More specifically, the networks of actors, and the institutions
servicescapes and finds that social dimensions extend beyond that guide them, are continually reproduced through the
social density or indirect interactions among other customers. enactment of practices (c.f. Giddens, 1984), which drives both
In his study of how non-commercial relationships influence stability and change in markets (Akaka et al., 2013; Vargo
market-place experiences, Johnstone found three additional et al., 2014).
social dimensions of servicescapes: Systemic approaches to conceptualizing service context can
1 nurturing and supporting non-commercial relationships; also be found in the work regarding service science and service
2 the need for social connection; and systems (e.g. Maglio and Spohrer, 2008). This research points
3 identifying with place. toward interaction among people, technology and
organizations as driving forces for the co-creation of value and
Importantly, these findings suggest that social needs, such as the context for service exchange. S-D logic and its service
feeling like an “insider”, sometimes have a greater impact on ecosystems perspective have been aligned with the discussion
positive evaluations of experience than physical or time/space on service systems (Chandler and Lusch, 2014; Vargo et al.,
servicescape attributes. 2008) and the dynamic systems through which service is
These conceptualizations of service context (i.e. service exchanged. However, the research regarding a service
encounters and servicescapes) have been well developed in ecosystems view has added to the complexity of this service
services marketing literature and provide important insights context by considering the central role of institutions in both
into understanding how customer experiences are evaluated value creation and exchange (Akaka et al., 2013; Vargo et al.,
during direct interactions between firms and customers during 2015). Thus, a service ecosystems perspective not only
particular, even extended, time/place encounters. However, considers how interactions within networks of actors and
rapid technological advancements (Bitner et al., 2000) and the technology influence experience, but also emphasizes the
growth of global markets have drawn attention to the need for importance of the socio-historic contexts, made up of multiple
broader and more dynamic frameworks for understanding the institutions, that guide those interactions and value
processes and outcomes associated with services in general, determination (Akaka et al., 2013).
and services marketing in particular (Grove et al., 2003). The study of service ecosystems has begun to explore how
Acknowledging these market dynamics, Nilsson and service experiences occur within extended networks of
Ballantyne (2014, p. 375) ask, “Is the servicescape concept interaction and intersecting institutions, which influence and
still adequate in the contemporary service environment?” The are influenced by ongoing efforts to co-create value (e.g.
authors point toward the need for a more dynamic Akaka et al., 2013; Chandler and Lusch, 2014; Vargo et al.,
conceptualization of service, and connect the servicescape 2014). Broadly speaking, a service-ecosystem perspective
concept with an S-D logic perspective. provides a richer, more dynamic conceptualization of service
Nilsson and Ballantyne’s (2014) review of the S-D logic context than traditionally studied in services and
literature reveals that there is little to no overlap between prior services-marketing research. This extended view sheds light
work regarding servicescapes and S-D logic. However, the on how various service contexts – i.e. service encounters (e.g.
authors find that at this intersection “servicescape is revealed Bitner, 1990; Surprenant and Solomon, 1987) and
as a context for service containing social dimensions critical to servicescapes (e.g. Bitner, 1992), as well as service systems
the co-creation of the service experience, which are not (e.g. Maglio and Spohrer, 2008) – are related through
well-understood” (p. 375, emphasis added). This suggests aggregate levels of interactions and institutions (e.g. Akaka
that conceptualizing servicescapes from an S-D logic et al., 2013; Lusch and Vargo, 2014) and, perhaps most
perspective moves the service context beyond particular time/ importantly, how these contexts concurrently influence, and
space events and direct interactions between service providers are influenced by, service experiences (e.g. Helkkula, 2011).
and customers (i.e. service encounters and servicescapes). In particular, this framework integrates prior literature

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 Extending the context of service Journal of Services Marketing
Melissa Archpru Akaka and Stephen L. Vargo Volume 29 · Number 6/7 · 2015 · 453–462

regarding various “services settings” through a meta-layer lens avenues that highlight the phenomenological service
with which researchers can oscillate among the nested levels of experience as the foundation for all business” (Helkkula,
interaction and institutions (i.e. service context) in their efforts 2011, p. 381). Largely because of hedonic connotations
to understand how experiences are evaluated and value is associated with the term “experience”, Vargo and Lusch
jointly created (Chandler and Vargo, 2011). (2008) have argued for the term phenomenological, rather
It is important to note that shifting to a service-ecosystem than experiential, in describing value creation. Importantly, in
view does not reduce the importance of service encounters and an S-D logic view, service experience can be conceptualized as
servicescapes in influencing service experiences. Rather, this hedonic and/or utilitarian, but is fundamentally centered on
approach helps to explain further the relationship between value-in-use (Sandstrom et al., 2008), or, more specifically,
service encounters and servicescapes, by framing them both value-in-context, rather than value-in-exchange (Vargo et al.,
within service ecosystems (Vargo and Lusch, 2011). In this 2008).
view, the contexts that constitute service can be considered at In other words, rather than focusing on the price paid for
aggregate levels (micro, meso and macro) of interactions and something in markets (i.e. value-in-exchange), emphasizing
institutions. In addition, a focus on institutions suggests that phenomenological aspects of service points toward value as
changes in service context, and thereby in service experience, created through the application of a market offering (i.e.
can be made through changes in social structure (i.e. value-in-use) in a particular context (i.e. value-in-context).
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institutions). The maintenance and change of institutions Sandstrom et al. (2008, p. 118) draw on this view of S-D logic
in service ecosystems occurs through an iterative and recursive and make an important connection between service
process called institutionalization (Vargo et al., 2015). The experience and value-in-use by arguing:
following section continues the discussion of a service
ecosystem perspective by elaborating how institutions frame [. . .] a service experience is the sum total of the functional and emotional
outcome dimensions of any service [. . .] the service experience is always
experience at aggregate levels of service context. individual and unique to every single customer and every single occasion of
consumption, and it assumes that the customer is an active co-creating part
3. How service context frames experience: of the service consumption process.

toward an institutional perspective In addition, this phenomenological view of experience aligns

with Ramaswamy’s (2011, p. 195 emphasis in original)
The underlying need for understanding a dynamic approach
argument that:
for service context is evident in the research that aims to better
● “value is a function of human experience”; and
understand what influences the creation of value and the
● “experiences come from interactions”.
evaluation of experience (e.g. Akaka et al., 2015; Helkkula
et al., 2012). Recently, Helkkula (2011) conducted a Growing attention toward phenomenological aspects of
systematic literature review to more clearly conceptualize the service experience (e.g. Helkkula, 2010; Helkkula et al., 2012;
construct of service experience. Based on this research, she Sandstrom et al., 2008) draws attention toward the need for a
identified several approaches that guide the investigation of broader scope of service context that moves beyond the impact
service experience and discussed how each perspective of service encounters on satisfaction. Furthermore, a
relates to services marketing and management. Her findings phenomenological view of experience suggests that all
reveal three general characterizations of service experience experiences are unique and dependent upon variations in
in the literature: outcome-based, process-based and social and cultural contexts (Akaka et al., 2013). Thus, a
phenomenological. service-ecosystems view suggests that all exchange-related
The discussion of service context above reveals differences experiences are service experiences (Akaka et al., 2015) and are
in the focus of service experience across particular views of co-created (Prahalad and Ramaswamy, 2004) through the
context as well. For example, the study of service encounters interactions among firms, customers and other stakeholders.
generally focuses on how direct interactions between firms and Recent work regarding value co-creation from a service
customers influence satisfaction and the development of ecosystems view points toward the idea that socio-historic
relationships – e.g. outcome-based approach to service
contexts strongly influence phenomenological views on value
experience – and also point toward short- and long-term
and the evaluations and reevaluations of experience (e.g.
effects of service encounters and pre- and post-evaluations of
Akaka et al., 2015).
service – e.g. process-based approach to service experience
Vargo et al. (2015) draw on Scott (2001) to define
(Czepiel, 1990). In addition, research on servicescapes focus on
institutions as “humanly devised rules, norms and meanings
satisfaction, social connections and healing as a core outcomes
that enable and constrain human action”. Based on this, they
related to service experience (Rosenbaum and Massiah,
argue for institutionalization – the maintenance and change of
2011), but also considers how other dimensions of service
institutions – as a driving force for value co-creation, as well as
context (physical, social, social-symbolic and natural)
innovation and market formation. In addition, Akaka et al.
contribute to the overall process by which services are
(2013) explore how the complexity of social context is largely
experienced.
According to Helkkula (2011), recent phenomenological based on intersecting and overlapping institutions, particularly
characterizations of service experience align with an S-D logic across distinct cultural groups. They argue:
view of service. She argues that although much of the work When similar institutions guide the actors entering an exchange encounter,
done from a phenomenological perspective is focused on the interaction is more likely to be successful. However, if the institutions
differ between actors (which is often the case in cross-cultural exchange),
hedonic experiences, “The hedonic service experience has the likelihood of a successful interaction, in which both parties derive value,
inspired research in marketing and opened new research may be reduced (Akaka et al., 2013, p. 9).

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This points toward institutions as a critical factor not only in the and empathetic approach – ask, observe, test – the consumers are still being
investigated from the vantage point of the provider.
co-creation of value and positive evaluations of experience, but
also in the co-destruction of value (Plé and Chumpitaz Cáceres, He further argues that by extending the scope of service
2010). It is important to note that although a service-ecosystem context to “see the same service from two vantage points, that
perspective allows for “zooming out” (Vargo and Lusch, 2011) of the consumer and that of the provider we can more easily
to consider and contextualize broad socio-historic structures, the appreciate that the context of each of them is radically
interactions among individual actors remain a central aspect of different”. This points toward the need for a service
experience as well (Akaka et al., 2015). ecosystems perspective that removes the distinction between
“producers” and “consumers” focusing on an actor-to-actor, or
4. The extended context of service A2A, view of value creation (Vargo and Lusch, 2011).
Although the conceptualization of servicescapes broadens the
The movement toward a service ecosystems view does not
scope of service context beyond a dyadic interaction, this view
minimize the importance of research regarding particular
also remains focused on the firm’s ability to create and deliver
service encounters or servicescapes. Rather, as will be
discussed, conceptualizing context through a service a service experience. It is also tied to underlying distinctions
ecosystems lens enables the situating of service encounters between services and goods (e.g. IHIP) and continues to
emphasize the need to study particular contexts that do not fit
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(i.e. interactions between firms and customers) and

servicescapes (e.g. physical and social environments) within well with traditional, goods-centered models.
service ecosystems. Importantly, just as an ecosystems Alternatively, the consideration of a service ecosystems view
perspective of service helps to inform the understanding of of service context requires researchers to reconceptualize
direct interactions between firms and customers, the study service as the application of resources for the benefits of others
of service encounters helps to inform the nature and dynamics and the basis of all exchange (Vargo and Lusch, 2004a, 2008),
of servicescapes and service ecosystems. rather than a product with unique characteristics. This
Table I, and the subsequent discussion, provides a broader definition of service automatically opens up the scope
framework for considering how aggregate levels of service of service context beyond traditional perspectives of service
context – e.g. service encounters and servicescapes – are settings as differentiated from the production and
nested within service ecosystems and influence evaluations of consumption of goods. As mentioned, an S-D logic, service
service experience. In other words, it is the multitude of ecosystems perspective provides an alternative view that
interactions and multiplicity of institutions (i.e. institutional removes the “producer-consumer” divide by suggesting that
arrangements) that create phenomenological perspectives of customers are always co-creators of value (Vargo and Lusch,
value, and experience. Furthermore, as mentioned, a 2008). This focus on service as the basis of all exchange also
service-ecosystem approach is based on the idea that all transcends the goods-verses-services distinction (Vargo and
exchange is service exchange, and, thus, the study of particular Lusch, 2004a) and allows for the conceptualization of
service encounters and servicescapes, as well as service interaction among multiple actors throughout markets.
ecosystems, is not restricted to any particular “type” of firm or Nilsson and Ballantyne (2014, p. 377) argue that:
industry. This is elaborated below.
S-D logic also reminds us that service interaction and determinations of
The conceptualization of service context as a service value-in-use can occur in many contexts other than a traditional, retail
encounter focuses on direct interactions, particularly between servicescape. The home, office and farmers’ markets are obvious examples,
as well as the widening appeal of the internet as a service setting.
firms (or their employees) and customers. Although this
perspective provides important insights to understanding This S-D logic view of servicescape aligns with Sanstrom
interaction between firms and customers and how firm efforts et al.’s (2008, p. 120) view that “Value in use is the evaluation
influence satisfaction, on its own it limits the understanding of of the service experience [. . .] value cannot be predefined by
the many environmental factors that contribute to value the service provider, but is defined by the user of a service”.
creation and the evaluation of experience. According to These phenomenological views on service experience draw
Gummesson (1994): attention toward an even broader scope of service context, the
The purchasing behaviour of consumers is being studied, particularly at the socio-historic structures (i.e. institutional arrangements) that
service encounter. Although researchers attempt to use a customer-focused frame particular places and processes of service exchange.

Table I The extended context of service

Components of context Service encounter Servicescape Service ecosystems
Conceptualization of service Market offerings that involve Self-service, interpersonal services, Application of knowledge and
direct interaction between remote services skills for the benefit of others
firm and customer
Focal relationship(s) Firm-customer dyad Firm-customer; customer-customer Networks of multiple actors
Parameters of service Peripheral and core service Contrived physical space with Socio-historic structures;
interactions physical, social, symbolic and intersecting and overlapping
natural dimensions institutions
Service experience Satisfaction, relationship Satisfaction, social connection, Phenomenological value
healing determination

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Importantly, a service-ecosystems view highlights the by service customers within their phenomenological lifeworld
embeddeness of micro, meso and macro levels of interaction contexts” (p. 61). One of the central arguments the authors
and institutions that contribute to value creation (Chandler make is that “the context for value in the experience is not
and Vargo, 2011). It is critical to note that these levels are determined by the service provider, but rather by the
relative, rather than fixed, and each constitutes the other – i.e. individual’s lifeworld”, and this experiential type of value is
the macro does not exist without micro and meso and vice “temporal in nature and subject to change”. In other words,
versa (c.f. Latour, 2007). For example, a restaurant encounter phenomenological views on experience, and value, are
is influenced by micro-level institutions that guide the influenced by dynamic service contexts and subject to
interactions between a customer and an employee (i.e. service continual change. In this way, both service context and service
encounter). These micro-level interactions and institutions are experience are co-created through the actions and interactions
nested within meso-level institutions such as what to wear and among multiple actors.
how to tip at a particular restaurant (i.e. servicescape). Extending the context of service using a service ecosystem
Furthermore, these micro-level and meso-level institutions are perspective not only provides insight to phenomenological
nested within wider socio-historic contexts, such as the conceptualizations of service experience (i.e. diverse
institutions tied to national culture and social norms for what interactions and institutions influence experience), but also
to eat and how to eat it. Although dyadic interactions between sheds light on how service contexts are formed (and
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firms and customers are often considered as a micro level, this reformed). This is important because adopting a service
is not necessarily the case. Furthermore, these aggregate levels ecosystem approach to service context requires the
of interactions and institutions are not limited to specific consideration of how social processes (e.g.
“types” of exchange encounters. Rather, they can be applied institutionalization) shape service experiences, and vice versa.
to other situations, such as the frozen meal example, because In particular, this service-ecosystem approach to context and
in all cases, the firm and customer interactions (e.g. meal phenomenological view on experience suggests that both
purchase and preparation) are nested within varying levels of service context and service experience are continually
institutions and influence the evaluations of experience. reconstituted through the enactment of practices as well as the
To account for a dynamic socio-historic perspective on reconfiguration of institutions and systems over time (Akaka
context (Akaka et al., 2015), a service ecosystem perspective et al., 2013).
also offers a meta layer of analysis that enables researchers to This emphasis on institutions highlights the social and
oscillate among different levels (micro, meso and macro) of cultural context that exists beyond direct interactions between
aggregation and institutional structure to better understand firms and customers (i.e. service encounters) and the physical
how value is created. In this light, although multiple actors in and social environments that surround them (i.e.
a particular encounter may share some institutions and servicescapes). Most importantly, it broadens the scope of
institutional arrangements (e.g. national culture), they may service context, as well as service experience, to include all
diverge across other institutions (e.g. religion or political market interactions and their associated institutions. In other
parties), which can influence the evaluation of a given words, because service is the underlying driver of exchange
experience. Thus, researchers wanting to gain a deeper (Vargo and Lusch, 2004a) and experiences are influenced by
understanding of a particular service encounter (e.g. a direct and indirect interactions among multiple actors, the
restaurant encounter) can look at institutions associated with context of service is not limited to particular “types” of
its particular servicescape (e.g. physical and social products or encounters. Furthermore, by focusing on how
environment) as well as broader socio-historical contexts (e.g. institutions influence experience, it becomes clear that unique
local or national culture) that can potentially contribute to experiences often emerge from differences in institutions and
value creation and influence the phenomenological evaluation socio-historic perspectives rather than heterogeneity of
of a service experience (see Akaka et al., 2013). products, as traditional services models might suggest. This
view of service context provides insights into the dynamics of
5. The co-creation of experience and context service experiences that can help to guide future research in
exploring how both service experience and service context are
When a service ecosystem perspective frames the study of
co-created (Akaka et al., 2013).
service encounters and servicescapes, phenomenological
experiences are always considered to be co-created through
the actions and interactions of multiple actors integrating and 6. Conclusion
exchanging resources to enhance the value of their lives and The framework proposed here contributes to the advancement
the lives of others. Thus, service experiences are not based on of services marketing research by extending the context of
discrete moments in time through direct interactions between service in two ways:
firms and customers; rather, experiences emerge throughout 1 its emphasis on service as the basis of all exchange allows
dynamic service contexts. These service contexts are formed the consideration of all instances of value-in-use,
and reformed through iterative and recursive social and in-context to be considered as a service experience; and
cultural processes, and service experiences are evaluated and 2 its conceptualization of context broadens the time/place
reevaluated over time and space (Akaka et al., 2015). dimensions that conventionally restrain research in service
Helkkula et al. (2012) develop the concept of “value in the encounters and servicescapes beyond physical, social,
experience” (VALEX), which ties an S-D logic view of value symbolic and relational dimensions to consider the
with a phenomenological view of experience. They define multiplicity of institutions across a wider socio-historic
VALEX as “the value that is directly or indirectly experienced space.

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In this view it is the actions and interactions of multiple actors service experience as well as the context within which that
and their associated institutions that contribute to the experience occurs. Managers may be able to pinpoint specific
co-creation of experience (often through evaluation of an social factors that can be leveraged, such as a brand or brand
experience) as well as context – be it service encounters, community, to enhance the overall service experience of a
servicescapes or broader service ecosystems. particular service encounter. Increasing the experiential value
This service-ecosystem perspective provides an alternative of particular service encounters and/or servicescapes can
approach for conceptualizing how value is created, and potentially help to increase the likelihood of developing
experiences are evaluated (Vargo and Lusch, 2004a, 2008). long-term relationships with customers as well.
Importantly, S-D logic emerged from an effort to integrate For researchers, the extended service context allows for
and extend prior research that focused on the application of service-centered concepts and frameworks can be
competences for the benefit of others (i.e. service) as the basis reconsidered outside of their traditional “services” (i.e.
of exchange. This alternative logic of exchange has drawn services-verses-goods) frame and applied to a wider scope of
attention toward “experiential” and “phenomenological” social and economic exchange. This can lead to research that
aspects of value and falls in line with Holbrook’s (2006) view explores a variety of questions regarding the role of goods in
of value as an evaluation of an experience, which influences the extended service context. For example, researchers might
and is influenced by broader values and social structures address the question, “How does the co-creation of service
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(Penaloza and Mish, 2011). Furthermore, S-D logic broadens context and experience occur through the efforts of traditional
the context of service research as a whole because, in this view, ‘goods-based’ organizations?” This would enable a fresh look
“there are no meaningful differences between services and at manufacturing firms who are struggling to understand how
tangible goods or between service firms and manufacturers” to compete in a dynamic and rapidly changing environment.
(Martin, 2012). This broad approach to service has been In addition, rather than separating services components from
recognized as an important theoretical framework for goods components in particular organizations, researchers
advancing the study of service (Martin, 2012; Ostrom et al., might consider “What are the roles of different ‘types’ of
2010) and potentially providing a foundation for developing a market offerings in the co-creation of service?” Based on this,
science of service (Maglio and Spohrer, 2008). we could also consider a reclassification of service context
The extended context of service, based on a service (similar to Bitner’s (1992) typology of servicescapes) through
ecosystems view, refocuses researchers to a broader range of an S-D logic, service-ecosystem view. In other words, “How
market offerings than previously considered to be part of might we reclassify service contexts if we remove the
services settings. It puts service at the forefront of social and goods-versus-services distinction?” This might help to
economic research because all exchange is essentially service uncover what components of service context, such as
driven. In this way, “all market-related experiences can be institutions, are most influential in evaluating different
considered as service experiences and all market contexts can experiences.
be considered as service contexts”. The emphasis on This extension of the context of service is an initial step in
institutions in service ecosystems and service contexts suggests developing a deeper and more dynamic understanding of how
that phenomenological views on value and evaluations of service experiences are co-created throughout markets. The
experience are driven largely by differences in institutions, framework presented here suggests that past work becomes
rather than products. Conceptualizing context as aggregate even more important as the context of service expands.
levels of institutions also provides insight to the embedded Services marketing researchers have made important strides
nature of service, such that all service encounters and in studying and explaining dynamic exchange-related
institutional arrangements are embedded within a variety of phenomena and providing critical insights to what service
servicescapes and both are nested within broader service experience is and how it is collaboratively created. However,
ecosystems. the development of S-D logic over the past decade (see Lusch
The idea that both service context and service experience and Vargo, 2014) and the undeniable need for more dynamic
are not restricted to specific “types” of market offerings and frameworks to help understand the complexities of advances
in technology and globalization indicate that there is much
are co-created through the integration and exchange of
work to be done. We hope that this perspective helps to renew
resources has important implications for researchers and
and inspire further work in this exciting field.
managers wanting to enhance service experiences. For
managers, extending the scope of service context draws
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Further reading
spatial influence of customers on other customers in the Kiser, L.L. and Ostrom, E. (2000), “The three worlds of
social-servicescape”, Australasian Marketing Journal, Vol. 18 action: a metatheoretical synthesis of institutional
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No. 3, pp. 120-131. approaches”, Polycentric Games and Institutions, Vol. 1,

Vargo, S.L. and Lusch, R.F. (2004a), “Evolving to a new pp. 56-88.
dominant logic for marketing”, Journal of Marketing, Vol. 68
No. 1, pp. 1-17. About the authors
Vargo, S.L. and Lusch, R.F. (2004b), “The four service
marketing myths remnants of a goods-based, manufacturing Melissa Archpru Akaka is an Assistant Professor at the
model”, Journal of Service Research, Vol. 6 No. 4, University of Denver. Her research interests include value and
pp. 324-335. value co-creation, collaboration in innovation and market
Vargo, S.L. and Lusch, R.F. (2008), “Service-dominant logic: (re)formation. Melissa Archpru Akaka is the corresponding
continuing the evolution”, Journal of the Academy of author and can be contacted at: Melissa.akaka@du.edu
Marketing Science, Vol. 36 No. 1, pp. 1-10.
Vargo, S.L. and Lusch, R.F. (2016), “Institutions and axioms: Stephen L. Vargo is a Shidler Distinguished Professor and
an extension and update of service-dominant logic”, Journal Professor of Marketing at the University of Hawai’i. His
of the Academy of Marketing Science. primary research areas are marketing theory and market
Vargo, S.L., Maglio, P.P. and Akaka, M.A. (2008), “On value strategy. He received AMA’s Harold H. Maynard Award for
and value co-creation: a service systems and service logic “significant contribution to marketing theory and thought”,
perspective”, European Management Journal, Vol. 26 No. 3, and the AMA/Sheth Foundation Award for “long-term
pp. 145-152. contributions to the field of marketing”.

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