Elements to organize the third place that promotes sustainable relationships in service businesses
Introduction
The background of servitized economy is not only based on the facts of providing enough products by matured industrialized society but also on social issues such as change of lifestyle to individualized one. Many people have lost their own place in society to be themselves. We live in a world of modernization, urbanization, and technical digitalization [1]. These huge changes have caused individualized lifestyles and culture. All activities have become personal, such as those with mobile phones, ‘walkmans’ (personal handy audio equipment), iPads, and even TV sets. It is mentioned not only ‘bowling alone’ [2] [3] but also ‘watching alone’ [4] [5]. That means increasing issues with less human communication and social capital [6] in modern society.
All practical needs are simultaneously satisfied with effective modern urban facilities such as convenience stores or personal door-to-door delivery systems. People do not need to accommodate daily provisions between neighborhoods as they can buy them in convenience stores that are open 24 h a day. These situations have separated lifestyles from those of other people, and diluted blood relationships and relationships in neighborhoods. Globalization and diverse values have pushed people in this direction. People have not welcomed the sharing of rights or properties. Commons [7] have been divided into private properties [1] to avoid the burden of close relationships. This situation has increased external services instead of shared activities. We can find the dilution of shared realm. The maintenance of commons has been outsourced to external service businesses [8] [9].
Service is based on the win–win relationship between service provider (SP) and service receiver (SR) with value co-creation [10] [11]. The importance of shared realm was recognized as the third place in such contexts and there were many new communities in the advanced business models [12]. Promoting relationship between SP and SR is very important for sustainable service business [13] [14]. In addition to experience value, it is also pointed out that ethical element of what the service realizes, what it means to his/her sense of value i.e., element of perspective, and emotional value of personal preference or attachment, i.e., element of personalization [14] as shown in Fig. 1.
There were researches about six P's elements i.e., basic three elements as product, people, and physical evidence, and additional three elements as perspective, personalization, and program to drive the process of maturing relationship between SP and SR. The transition model of customer and the relationship shows the community as the most matured form of relationship between them (Fig. 1) [15] [14]. When they come to the stage of creating a community, the relationship between them has been somewhat transformed from that of the early stage with confrontation between both parties to the final stage of co-owners pursuing the same direction. Both parties stand on the same side sharing a common destination. It is important to recognize the position of the third place as a core module of the community [16] [17].
This paper focuses on the third place, which is formed through the process of establishing in-depth service relationship between SP and SR, as a different side of community from customer perspective. The purpose pf this paper is to analyze what kinds of factors are necessary to promote sustainable relationships in the service business model, by using a case study.
This paper has five parts. The chapter begins with literature survey. Then, authors define the research methods as case studies, and next case studies are conducted. Then the authors discuss implications and finally show conclusions.
Section snippets
Literature review
Vargo and Lusch insisted on the Service Dominant Logic (SDL) for service business instead of Goods Dominant Logic (GDL) [10] [11]. Time dimension is an important element in service business. Sustainability is more important in service business than in product selling. Trading physical products ends up with delivery -value in exchange, where value is defined a priori to the transaction. On the contrary, service requires continuous relationship with customer, that is to say value in use, value in
Research methods
This research is an explorative case study using semi-structured interviews in open-ended nature [42], because the subject of service science is a relatively new academic area [42] [43] across multiple fields, where business practice is precedent to theory. According to Yin's definition, it is defined as ‘Case study is an empirical inquiry that investigates a contemporary phenomenon in depth and within its real-life context, especially when the boundaries between phenomenon and context are not
Case profiles
We selected cases from Japanese, European, and American companies, and in each types of the third place, which were well-known for their in depth service businesses. These cases are related to technology which is a knowledge structure of developing a process to organize the third place as part of a social design [47] [48] [49]. Innovation consists of not only the development of technologies, products, sales-routes, purchasing sources, but also organizations and processes [50]. Consequently, it
Implications
The implications of this paper are to analyze how the third place is developed and attain an important role to establish in-depth relationship between SP and SR. We extracted five factors to form and sustain the third place. These structures mean implications below;
- i
We also analyzed the necessary five factors to form and sustain the third place i.e., shared space, shared objectives, shared time, self affirmation, and economic sustainability. The structure of the third place offers a theoretical
Conclusion
It has been important for service businesses to develop long term relationships with customers by introducing the third place. We conducted case studies to analyze an excellent service model. We classified the third places to four types, i.e., -communication, private space, meaning focus, knowledge focus types. We found five elements to organize them, i.e., -shared space, shared objectives, shared time, self affirmation, and economic sustainability. These are the critical frameworks to
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