It's all B2B…and beyond: Toward a systems perspective of the market

Abstract

The delineation of B2B from ‘mainstream’ marketing reflects the limitations of the traditional, goods-dominant (G-D) model of exchange and a conceptualization of value creation based on the ‘producer’ versus ‘consumer’ divide. Service-dominant (S-D) logic broadens the perspective of exchange and value creation and implies that all social and economic actors engaged in exchange (e.g., firms, customers, etc.) are service-providing, value-creating enterprises; thus, in this sense, all exchange can be considered B2B. From this perspective, the contributions of B2B marketing (and other sub-disciplines) can be seen as applicable to ‘mainstream’ marketing. This generic, actor-to-actor (A2A) orientation, in turn, points toward a dynamic, networked and systems orientation to value creation. This article discusses this systems-oriented framework and elaborates the steps necessary for developing it further into a general theory of the market, informed by the marketing sub-disciplines, marketing practices, and disciplines external to marketing.

Introduction

A state arises, as I conceive, out of the needs of mankind; no one is self-sufficing, but all of us have many wants…. Then, as we have many wants … and many persons are needed to supply them, one takes a helper for one purpose and another for another; and when these parties and helpers are gathered together in one habitation, the body of inhabitants is termed a state. And they exchange with one another, and one gives and another receives under the idea that exchange will be for their good.

As the global, networked economy becomes more pervasive and its nature more compelling, it is (should be) becoming increasingly clear that we rely on one another through the voluntary exchange of applied skills and competences (Vargo and Lusch, 2004, Vargo and Lusch, 2008a). Consequently, one might think that the above quotation is contemporary; it is, however, from Plato's The Republic (360 BCE/1930), published over 2000 years ago.

Despite a globally interdependent world, the simple truth behind Plato's words often seems to be missed: we are all similarly human beings serving each other, through exchange, for mutual wellbeing. Perhaps his statement therefore punctuates our (Vargo and Lusch, 2004, Vargo and Lusch, 2008a; see also Vargo, 2007) contention that it is important to develop a logic of and for the market (and society) and marketing that transcends time, geography, and the sometimes myopic conceptualizations of academic silos. It was in the spirit of this contention that we previously used a ‘linguistic telescope’ to zoom out to a broader, more transcending view of economic exchange and suggested (Vargo & Lusch, 2008b) “It's all B2B.”

Since our early collaborative work on what has become known as service-dominant (S-D) logic, we have tried to nudge marketing thought away from fragmentation and toward a more unified theoretical conceptualization and framework. A first step was to suggest transcending the ‘goods’ verses ‘services’ divide with ‘it is all about service.’ More specifically and more recently, we recognized a need to overcome (mis)conceptual problems associated with the notion of a ‘producer,’ as a creator of value, versus a ‘consumer,’ as a destroyer of value, and have reflected this in one of the newer central tenets of S-D logic: all social and economic actors are resource integrators (Vargo & Lusch, 2008a — as captured in foundational premise (FP) 9). That is, all parties (e.g. businesses, individual customers, households, etc.) engaged in economic exchange are similarly, resource-integrating, service-providing enterprises that have the common purpose of value (co)creation — what we mean by “it is all B2B.”

We initially picked ‘B’ because, given the most commonly used designations of ‘B’ (business) and ‘C’ (consumer), economic (and social) actors come closest generically to what is captured by ‘business,’ rather than ‘consumer.’ Stated alternatively, a business is thought of as enterprising, a characterization that we find also more fully captures the activities of those with whom they exchange, than is implied by ‘consumer’ — which has rather passive, final connotations of a ‘target’ with a primary activity of using stuff up, rather than creating and contributing. Additionally, B2B scholars have been among those at the forefront in the conceptualization of generic ‘actors’ involved in value-creation processes.

However, we now intend to zoom out even more with our linguistic telescope and use perhaps a more abstract designation such as ‘actor-to-actor’ (A2A) (see Vargo, 2009), which Evert Gummesson also has recently indicated to us that he is adopting, and is consistent with our adoption of the generic term ‘actor’ (e.g. Vargo & Lusch, 2008a, FP9) in our writings, as well as the convention of most Industrial Marketing and Purchasing (IMP) Group scholars (e.g. Håkansson & Snehota, 1995). Interestingly, it is also consistent with Bagozzi (1974) who, in writing about marketing as an organized behavioral system of exchange, defined the exchange system as a “set of social actors, their relationships to each other, and the endogenous and exogenous variables affecting the behavior of the social actors in those relationships” (p. 78).

The A2A designation, taken together with another of S-D logic's tenets — value is always co-created (Vargo & Lusch, 2004, FP6) — point away from the fallacy of the conceptualization of the linear, sequential creation, flow, and destruction of value and toward the existence of a much more complex and dynamic system of actors that relationally co-create value and, at the same time, jointly provide the context through which ‘value’ gains its collective and individual assessment (Giddens, 1984, p. 25; Slater, 2002. P. 60). That is, they point beyond an anything-to-anything perspective to a systems orientation. A systems orientation is important to both academics and practitioners because it has different implications for understanding and applying principles of value co-creation, as is particularly essential in an increasingly interconnected, and thus increasingly dynamic, world. There is perhaps a certain irony in this position; it implies that we must move toward a more macro, systemic view of generic actors in order to see more clearly how a single, specific actor (e.g. a firm) can participate more effectively.

Our purpose here is partly to elaborate further the claim that it is all A2A (or B2B) — that is, at an appropriate level of abstraction, all actors are fundamentally doing the same things, co-creating value through resource integration and service provision. But, perhaps more important, it is also our purpose to point toward what becomes possible once we have normalized the actors: (1) cross-fertilization among what have been seen as fragmented sub-disciplines and (2) a better vision of the collaborative, systemic nature of value creation and the implications for marketing theory and practice.

To accomplish these purposes, we first establish the historical roots of the producer–consumer characterization and briefly explore the role of B2B and other sub-disciplinary scholars in shifting the focus toward a more complex and relational model of value creation. We then outline an S-D logic conceptualization of value creation and its implications for not only a network-based model, but also a systemic model. We then briefly discuss how practice can inform marketing theory and why a practice-informed and S-D-logic-based understanding of markets and marketing, that integrates sub-disciplinary knowledge, might provide better insights into the practice of marketing.