As we noted previously, marketing inherited a view that
value was something embedded in goods during the manufacturing
process, and early marketing scholars debated the
issue of the types and extent of the utilities, or value-added,
that were created by marketing processes. This value-added
view functioned reasonably well as long as the focus of marketing
remained the tangible good. However, arguably, it
was the inadequacy of the value-added concept that necessitated
the delineation of the consumer orientation—essentially,
the admonition that the consumer ultimately needed to
find embedded value (value in exchange) useful (value in
use). As Dixon (1990, p. 342) notes, the “conventional view
of marketing adding properties to marketing … underlies
the dissatisfaction with marketing theory that led to the services
marketing literature” (see also Shaw 1994).
Services marketing scholars have been forced both to
reevaluate the idea of value being embedded in tangible
goods and to redefine the value-creation process. As with
much of the reexamination and redefinition that has originated
in the services marketing literature, the implications
can be extended to all of marketing. For example, Gummesson
(1998, p. 247) has argued that “if the consumer is the
focal point of marketing, value creation is only possible
when a good or service is consumed. An unsold good has no
value, and a service provider without customers cannot produce
anything.” Likewise, Gronroos (2000, pp. 24–25;
emphasis in original) states,
Value for customers is created throughout the relationship
by the customer, partly in interactions between the customer
and the supplier or service provider. The focus is
not on products but on the customers’ value-creating
processes where value emerges for customers and is perceived
by them,… the focus of marketing is value creation
rather than value distribution, and facilitation and support
of a value-creating process rather than simply distributing
ready-made value to customers.
We agree with both Gummesson and Gronroos, and we
extend their logic by noting that the enterprise can only offer
value propositions; the consumer must determine value and
participate in creating it through the process of coproduction.
If a tangible good is part of the offering, it is embedded
with knowledge that has value potential for the intended
consumer, but it is not embedded with value (utility). The
consumer must understand that the value potential is translatable
to specific needs through coproduction. The enterprise
can only make value propositions that strive to be better
or more compelling than those of competitors.