However, under service dominant logic physical products and services are fused together at a deep level. This assumes the presence of physical products and other products (i.e., services). In other words, the goal of management was to maximize this exchange value, which was divided into production of value by the company and consumption of value by the customer. The customer’s role has been considered that of paying the price of the product to the company and consuming it. An enterprise aims to build value into its products (including both physical products and services) and get its customers to recognize the high level of that value. Traditionally it has been the enterprise that plays the main role in creating value. Q: Specifically what kinds of things are referred to by advancing the shift toward a service economy? We need to adopt service dominant logic that fuses products and services, advancing a shift toward a service economy that delivers holes, not drills. The fact that we have reached a critical state in which simple pursuit of product performance alone is not enough to do business can be seen in the difficult straits seen among manufacturing companies. They want a quater-inch hole. It can be said that Japan, which experienced economic growth as a manufacturing country, focused too much on improving the performance of the drill. There is an old maxim in the world of marketing that says that People don’t want to buy a quater-inch drill. This is an attempt to rearrange economic theory through integration and fusing of products and services, revising the previous basic assumption that attempted to separate economic activities into products and services. However, about 10 years ago a paradigm shift took place with the rise of service dominant logic. In the past service research saw products and services as polar opposites and stressed the importance of shifting to services. What is important is that economic activities themselves shift toward services. However, a shift to a service economy does not simply mean that industry shifts to services. About 70% of Japan’s GDP comes from service industries. Japan and the developed countries of Europe and North America are excellent examples. As an economy matures, it needs to shift toward services. The fact that they have begun attracting considerable attention in recent years is closely related to the changes that have taken place in the structures of the economy and industry. Research in the fields of service management and marketing is relatively new, with a history of only about 50 years. Q: Would you start by explaining what kinds of things are referred to by service research and service marketing, the subjects of your research?
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