Using service logic to redefine exchange in terms of customer and supplier participation

Service logic emphasises value co-creation, although mostly contending that the customer alone creates actual value. Value co-creation and co-production imply customer and supplier participation, but the literature mostly omits participation issues. This paper disentangles notions of production and co-production from the creation and co-creation of value propositions, and from the assumptions underlying value-in-use. The focus is on participation in exchange by customers and suppliers and their contributions at various stages of the value creation process. The paper uses service logic to develop a process model of customer and supplier participation in exchange with three phases (production, negotiation and usage), explores why suppliers allow customer participation in value proposition creation, and the motivations compelling customers to participate. Understanding how supplier and customer participation impact on value proposition creation and on value-in-use, provides an impetus for improved targeting practices, enhanced supplier ability to compete, and more focused research.