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https://dspace.jaist.ac.jp/

Title

Service Mediator Model for Value Co‑Creation
Based on Service Dominant Logic

Author(s)Doan, Mihn Chau; Shirahada, Kunio; Kosaka,
Michitaka

Citation

Journal of Service Science and Management, 6(1):11‑19Issue Date

2013‑03

Type

Journal Article

Text version

publisher

URL

http://hdl.handle.net/10119/11414

RightsCopyright (C) 2013 Scientific Research
Publishing. Mihn Chau Doan, Kunio Shirahada andMichitaka Kosaka, Journal of Service Science andManagement, 6(1), 2013, 11‑19.
http://dx.doi.org/10.4236/jssm.2013.61002

Description

Japan Advanced Institute of Science and Technology

Journal of Service Science and Management, 2013, 6, 11-19
doi:10.4236/jssm.2013.61002 Published Online March 2013 (http://www.scirp.org/journal/jssm)

Service Mediator Model for Value Co-Creation Based onService Dominant Logic*
Minh Chau Doan, Kunio Shirahada, Michitaka Kosaka
School of Knowledge Science, Japan Advanced Institute of Science and Technology, Nomi, Japan.
Email: kosa@jaist.ac.jp
Received January 12th, 2013; revised February 15th, 2013; accepted February 28th, 2013

ABSTRACTA new mediator model for Information service firms (ISFs) is proposed based on Service dominant logic. In this model,
mediators create a shared contextual place and it plays an important role in connecting and managing supply and demand to provide superior services. The mechanism of value co-creation based on service dominant logic in businessactivities through a suitable service field organized by mediator firms for interactions by all participants. This mechanism is demonstrated through case studies of the framework of Hitachi TWX-21 and Cookpad Inc., which are Japanese
information service businesses. We found that a good service field was effective in helping all business’s parties receive
better value and gain satisfaction.
Keywords: Service Mediator; Service Field; Service Dominant Logic; Information Service

1. Introduction
Many companies in real business currently conform toservice trends by shifting their business from goods toservices [1-3]. Information in the era of knowledge is not
only simple data but it is also services in high demand.
Many companies do not provide tangible products but
focus on information services to satisfy customers’ demands. Tourist agencies, study abroad agencies, retrieval
websites, and information solutions firms are examples
of information service firms (ISFs) who supply information as services. These companies offer consultants, information, knowledge, and resources to help their business partners and customers exchange services and satisfy their requirements. They act as intermediaries tobridge the demand and supply of business partners andusers. Various methods such as e-commerce or SNS tools
enable them to interact with customers and exchange
services. Although direct sales are encouraged and there
do not seem to be any places for mediators in e-commerce, in fact, this is not true. Services in the information
field are becoming more complex and separate, creating
opportunities for new forms of intermediation [4].
When customers want to exchange information services, the information is large scale, which confuses
them. The issue of how to match the seeds and needs ofproviders and customers suitably and effectively is themost important thing in creating service value and satis*

This research was supported by Japanese Grants-in- Aid for Scientific
Research (KAKENHI No.24510186).

Copyright © 2013 SciRes.

faction. Noll [5] in the previous theory suggested mediation theory to be “the nature of the conflict dictates themediation process to be used and the conflict’s likely
outcome”. This definition is close to G-D logic in which
traditional mediators assist their clients deal with otherparties to solve disputes. They rather help customers tonegotiate rather than encourage the co-creation process.
Thus, both clients and other partners lack the highest
satisfaction and benefits. ISFs with the previous mediatormodel for information services just received informationfrom one side and transferred that information to the others. There was no collaboration process in the service
exchange so that the old mediator could not create value
co-creation to satisfy both business partners and customers. Therefore, a new co-creation mediator model is necessary for ISFs to manage and qualify information service thus bringing satisfaction to customers through value co-creation [6] with service providers. This paper proposes a new service mediator model to effectively support the businesses of ISFs and bring satisfaction to allplayers in the business.
There are two essential factors in the new service mediators for ISFs to enhance the effectiveness of service
exchanges. The first is matching the seeds and needs ofservice exchanges, and the second is enhancing the value
co-creation process between users and service providers.
S-D logic [1] is used as a foundational mindset throughout the new model to confirm the significance of value
co-creation and encourage customers to collaborate with
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

suppliers during each stage of product design and product delivery. ISFs in the new mediator model will seek
the necessary information from both individual parties
and attempt to come to a resolved agreement on the behalf of both parties’ to improve the effectiveness of providing services [2]. ISFs, with professional services, will
use their own resources to assist their customers reducetime, effort, and costs by using specific content and offerings of knowledge.
Case studies on ISFs are used to verify the effectiveness of the new service mediator model based on S-D
logic discussed in this paper. The cases studies are donewith Hitachi TWX-21 [7,8], which is one of the mostsuccessful and effective service businesses in Japan and
Cookpad Inc., which is the foremost recipe Website inJapan (Alexa traffic ranked 77th of all Japanese Websites)[9], to analyze their business frameworks. New ideas aredemonstrated through analyses of successful information
service businesses to verify the effectiveness of the proposed model. The findings from the analyses provide
evidence that the service field “Ba” plays a central role incooperation with customers therefore leading to co-create
values for efficient services. Here, the service field “Ba”
is introduced by applying the concept of “Ba” in knowledge management proposed by Nonaka [10]. This service
mediator model is believed to bring the triple win concept of benefits to all players in the business process.

2. New Service Mediator Model Based on
SDL
2.1. S-D Logic for New Service Mediator
S-D logic is an alternative mindset presenting new perspectives on services and their impact on organizations,markets, and society. The foundational proposition of
S-D logic is that every social activity is fundamentallyconcerned with service exchanges [1]. Thus, services areexchanged for services, every company is a service company, all markets focus on the exchange of services, andall economies and societies are service based [2].
Using S-D logic as a foundation for this research, theproposed model will concentrate on new premises andpotential ideas of S-D logic. S-D logic actually changes

the way people do business, has great advantages, andembraces the concepts of the “value-in-use” and “cocreation of value” rather than the “value added” approachof G-D logic. Instead of simply providing or deliveringvalue to customers, firms cooperate with customers, aswell as understand and tighten their relationships to build
more useful and satisfying values for customers. S-D
logic is used as a fundamental foundation to propose a
new service mediator for ISFs, where the mediator bridges suppliers and users so that they can cooperate toco-create better service values. S-D logic encourages theconcept of a value co-creation mediator in which the mediator assists firms and customers to highlight their supply and demand to exchange services. Table 1 summarizes the difference between the traditional mediatormodel and our co-creation mediator model from the perspectives of both G-D and S-D logic.

2.2. Classification of Business ModelA new service mediator model is formed and classified
with other business models based on the S-D logic previously mentioned. The new model concentrates on thevalue co-creation of S-D logic to tighten the relationshipbetween firms and customers. From the premises of S-D
logic, service values are enhanced and leveraged by both
firms and customers. When firms and customers can understand each other, and then collaborate with trust, firms
can provide better services that depend on agreementwith customers. When they directly join the service cocreating process, they can increase their demands. Finally,customers are able to totally agree with the services provided and gain the highest level of satisfaction.
Figure 1 classifies the business models of direct business exchanges and mediator models based on G-D logic
and S-D logic. The new service mediator model is a complete model with the perspective of S-D logic and the
mediator supports suppliers and users to enhance service
values. The figures also point out the difference between
the traditional service mediator and new service mediator.
The previous one just simply transferred the informationand did not create much value for either customer (suppliers or users). Examples of this type are traditional

Table 1. Traditional mediator vs co-creation mediator model.
Traditional mediator (G-D logic)

Co-creation mediator (S-D logic)

Representative of client on one side

Support for both customers and suppliers

Neutral facilitator in parties’ decision making

Involvement in decision making process by using their own resources

Assists clients by consultation, communications,and knowledge to solve conflicts
Limited or no technical support. Negotiation mostly
based on skills and quality of mediators

Using knowledge, technology, and own resources to match seeds andneeds of clients and providers

Value creation

Value co-creation

Copyright © 2013 SciRes.

High levels of technology to utilize value co-creation

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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

Two player model

Three player modelCollect
ArrangeTransfer

Information

G-D
logic

$

Providers(Suppliers)
Providers(Suppliers)

Providers /Recipients(Suppliers)

Serviceme diator
NegotiateSolve
conflict

Recipients(Users)Recipients(Users)Information

Servicemediator

Service

S-D
logic

13

Value
co-creation

Organize
Providers /Recipients(Users)ManageMechanism to support value cocreation between suppliers and user
PromoteSupport

Value co-creation
Money

Providers /Recipients(Suppliers)

Providers /Recipients(Users)Figure 1. Classification of business models and new service model hypothesis.

travel and study abroad agencies. They only collect andtransfer information. The providers offer some services
based on customers’ requirements but they do not fulfill
their needs. As most of their business processes involve
paper work, are not inefficient in data storage and management. However, the new mediator model based on
S-D logic, emphasizes value co-creation to maximize
service values. Figure 1 categorizes and describes our
hypothesis for the new proposed model.

3. Proposed Model and Roles of New Service
Mediator from S-D Logic
A value co-creation mediator model is formed and supposed to be beneficial to all players in business managed
by ISFs from the propositions of S-D logic and the service field.
Figure 2 outlines a model of an ISF’s information system to help users and service providers collaborate with
one another more productively and efficiently. First, the
ISF organizes an open, truthful, and useful environment
in which customers can collaborate. Users and service
providers exchange their information, requirements, orservices provided on this platform. Users and providers
can freely share their information in the location managed by the ISF, and all their contexts related to the services to cooperate in a comfortable environment. The ISF
not only uses its own advanced resources and technology
to promote value co-creation but also provides a service
field “Ba” for suppliers and users to communicate andcooperate in. These resources are recognized as the supCopyright © 2013 SciRes.

porting functions of ISF in the new mediator model. As aresult, the ISF is able to respond to customers’ expectations and satisfy them by increasing service values via
the supportive co-creation process.
It would be very complex and confusing if there wereno mediators to support collaboration between service
providers and users because a great deal of information
would be exchanged by users and providers who were
not good at managing these contexts. It could mess up
the services and consume a great deal of time, cost, andeffort and the results may not be helpful. Therefore, theexistence of ISFs as mediators is extremely important tosupport higher value extraction to convey satisfaction. Insummary, ISFs play two roles in the proposed model tomaximize service values and assist cooperation between
suppliers and users. They are:a) Organization and management of the service field“Ba”
It is not easy for ISFs to control and balance the relationships and benefits of both clients in acting as an intermediary between business partners and users. How tobuild good relationships and encourage clients to efficiently work with one another are the responsibilities of
ISFs. ISFs must know their capabilities and requirements
to reach mutual agreements between business partners
and users. ISFs will help customers exchange their values
and ideas to thoroughly understand seeds and needs byorganizing and managing a constructive service field“Ba”.
The service field “Ba” is a cooperative environment
containing all contexts of services, and it is a mechanism
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

14

Collaboration
Customers
Service

Users needs

Service
Users needs

Service providers
Service

Users needs

ISF’s Information system platform・Users needs
・Services・Environmental data

・Identification of user
needs
・Supporting collaboration
・Advertisement

Data Base

Data Processing
ISF’s information system

Figure 2. ISF’s functions as a mediator.

to increase value co-creation and collaboration. The concept “Ba” was proposed by Nonaka [10] for knowledge
creation environment in the area of knowledge management. Here this concept is applied to service value creation. When all contexts of services are gathered in theservice field “Ba”, the mediator firm finds it is easy toidentify the seeds and needs of suppliers and users. However, knowing requirements and service offerings does
not mean that ISFs can analyze and match them suitably
and correctly. Therefore, the new mediator must organize
and manage a beneficial, comfortable, and trustworthy
environment for their business partners (providers) andcustomers (users) for them to exchange supplies and requirements, and thus interact with them so that their service attributes can match the levels of satisfaction of one
another.
When users want services, they receive huge amounts
of information from service providers and they are notable to choose the best for their solutions. It is also hardfor service providers to find customers due to various
reasons such as lack of market research, culture, andlanguage barriers. This leads to the importance of themediator who is an intermediary that collects and balances the seeds and needs of the services by managing
the service field. ISFs organize a common interactive
environment in the beginning to gather information from
customers, which thus makes it useful for analyzing andmatching suitable services. ISFs have to provide theirdata mining systems with advantageous collections andanalyze data to fit potential supply and demand. Whenusers and suppliers are ideally matched, they are relaxed
in cooperation and carefree in sharing and discussing
services, after which they can build agreeable services
together.
b) Promotion of value co-creation
Another important role of ISFs is that they must do
their best to support value co-creation. Service values
here are constructed by all parties in business. Thismeans that one must use the applied knowledge of others
Copyright © 2013 SciRes.

(services) as a resource to benefit others [11]. Many tasks
are set up for ISFs to fulfill customers’ expectations toenhance value co-creation.
Values in S-D logic are created by collaboration between firms and customers. Values in the new service
mediator model are created by collaboration between all
three parties. Therefore, the mediator needs to use his/her
professional services to enhance value co-creation by
providing an ideal environment and tools to support collaboration. Users and suppliers are encouraged by mediators with well-equipped systems, excellent technologies, and specialized knowledge to enhance co-creation.
Finally, the created values are outstanding, and satisfy allparticipants.

4. Case Study 1: B to B Information
Service—Hitachi TWX-21
4.1. Outline of Hitachi TWX-21
Hitachi established TWX-21, which is the business media between enterprises that have offered places of business-to-business transactions on the Internet to customers.
TWX-21 means “Trade Winds on eXtranet-21” [7]. It isa business system cloud, which enables business operations of all business partners and customers via a cloud
flatform and it supports electronic data interchange (EDI).
The three players of TWX-21, business enterprises, andcustomers in many processes cooperate such as in design,
procurement, production, and sales. This business model
is considered to convey the best benefits to all players inbusiness. Figure 3 outlines the concept underlying TWX21 in which an eco-system is proposed in collaboration
between users and venders.
TWX is the mediator who connects the seeds andneeds of business partners and its users in this framework.
TWX-21 services are summaried below:
TWX-21 collects service demands, and through standardizing service quality, it develops the requirements ofParticipate to standardize business
ServicedemandServicedevelopment

USER LIAISION GROUP

Servicefield• Users

Serviceapplication

Business
partners

TWX-21• Sales partners

Data
exchange

ASP
ServiceeMPService

Serviceprovider• System• Service application
application Employee • User management
master• Data center• Helpdesk

Figure 3. TWX service process.
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

customers and then links them to suitable suppliers.
TWX-21 uses its huge database and tools to match theseeds and needs of users and business partners in thisprocess. TWX-21 proposes a service field “Ba” to connect this supply and demand, which is its cloud platform,
to collect and correctly analyze the requirements of customers. This is not an easy task because it must satisfy
customers from the beginning by choosing the best partners; otherwise, TWX-21 will fail to make customers feelsatisfied with their services.
When all its services are organized within the service
field, TWX-21 assists customers to access and manage
their services well.
As illustrated in Figure 3, we can see that Hitachi
TWX-21 is:
1) A collection of inter-enterprise, electronic commerce (EC) services for affiliated members.
2) A company that provides a highly reliable global
network.
3) A company that provides various services that enhance business efficiency.
4) A company that provides a business infrastructure
to service providers.
TWX-21 builds a good environment for all players inthe business and contributes and creates beneficial services for all by being a bridge that connects business
partners and users and assists them to co-create service
values.

4.2. Supporting Functions (Services) of TWX-21
1) For organization and management of the service
field “Ba”
a) Strong Brand
First, Hitachi has a good brand that can gather together
suppliers and users to work smoothly under the TWX-21
umbrella. It is one of the most well known ISFs in Japanso that many business partners and customers want to dobusiness with it. It also has a high standard of quality thathelps control and qualify the services provided. Suppliersand customers can believe in the services provided andenjoy joining in the environment that TWX-21 has organized and prepared for them because of its good reputation. TWX-21 has attracted over 43,500 customer companies globally from over 20 countries and regions as it
is a trustworthy and effective company for all IT solutions. It emphasizes the well known, strong brand of
TWX-21 in attracting customers and creating favorable
impressions.
b) IT infrastructure
The second reason, which is one of the most powerful
functions of TWX-21, is that it has an outstanding IT
infrastructure and systems. Today’s business market demands a high rate of change in information technology
Copyright © 2013 SciRes.

15(IT) by which organizations are required to handle problems. Organizations face rapidly changing market conditions, new competitive pressures, new regulations thatdemand compliance, and new competitive threats. All ofthese situations drive the need for the IT infrastructuresof organizations to respond quickly to support new business models and requirements. Fortunately, TWX-21 has
a strong foundation in its IT system and can provide allservices from maintenance to e-sourcing services. TWX21 focuses on its IT infrastructure to create a robust andsuitable space for its customers to cooperate in creating
new values in services.
The three most remarkable functions of TWX-21 are
Web-EDI services, Document Exchange Services, and
SaaS support services. Figure 4 shows the structure of
the SaaS business support service that is a useful function
to help suppliers and users launch their businesses quickly and inexpensively [8]. Its powerful system creates acomparative service with other competitors and exceeds
the others in excellence. TWX-21 has solved all problems and provided direct interactions between suppliers
and users at lower cost by providing outstanding services
and making coordination between firms and customers
become more efficient and responsive. Therefore, TWX21 has become one of the leading global providers of IT
solutions in cloud computing in Japan and China.
2) For promotion of value co-creationa) Efficient system of data processing
TWX-21 has an enormous data center that helps its
employees analyze the supply and demand of suppliers
and users and match them fully. Moreover, its feedback
system and spiral data processing with a trial and error
process are repeatedly implemented to leverage the data
after feedback. The spiral model is applied in the development process as it continues to develop, provide feedback, and revise data until agreement is obtained fromusers. This system provides customers with more valuable and useful information. As a result, this model establishes professional levels of performance that satisfy
customers.
b) Communications by human
Hitachi knows that communications is the means toapproaching customers’ perceptions and decisions. Therefore, it concentrates intently on building excellent frontline teams to serve customers. All customer-service employees are qualified in communicating with people andhelping customers to choose the most suitable services
for them. They also can provide customers with consultations giving professional advice and recommendations.
Technical expertise has also been taken into consideration with a professional helpdesk that can help customers
with 24/7 assistance and immediately solve their problems. Moreover, all services and helpdesks are offered in
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

Figure 4. Structure of SaaS business support service (source: [8] Kiuchi et al., 2012).

multiple languages (English, Chinese, and Japanese) toenable customers to easily communicate and collaborate.
Hence, human resources represent one of the most significant functions of TWX-21 operations in satisfying
customers.

5. Case Study 2: B to C Information
Service—Cookpad Incorporated
5.1. Outline of Cookpad Inc.
Cookpad Inc. was founded in October 1997 and has developed from a small Website (www.cookpad.com) providing information about cooking and recipes to a successful service company with a huge number of usersthat reached 14 million in September 2011. Cookpad has
gradually made innovations to its services through 15
years of business to become the No. 1 recipe data Website in Japan and it attracts huge numbers of pageviews
per day. Cookpad is Japan’s largest recipe site allowing
visitors to upload and search through original, user-created recipes. Not content with being No. 1 in Japan,
Cookpad has plans to conquer the world and has recently
expanded its services outside Japan with an English
Website @www.cookpad.it.
Cookpad is engaged in the operation of contributing
recipes and searching Websites and mobile Websites.
Increasingly more users come to Cookpad.com to experience its services and enjoy the recipes, pictures, andcooking tips it provides. Figure 5 outlines the operationsof the Cookpad firm.
Copyright © 2013 SciRes.

As can be seen from Figure 5, Cookpad Inc. works
with both business partners and users as a mediator. The
company operates in three business sectors. They are themembership, the marketing support, and the advertising
sectors.
Concerning on the first business sector, Cookpad in its
membership sector provides friendly and easy searchesof Websites to users so that they can interact. Most
Cookpad users are housewives who have had less experience with technical issues on Websites. The Cookpad
Website is well organized for cooking lovers to cometogether, share their recipes, and learn from other people’s experiences. Users can then co-create service values and provide satisfaction by providing services.
The second business sector is marketing support, which
provides tie-up advertising services, including recipe
contests and sponsored kitchens for manufacturers, sellers, and distributors of food, beverages, home electronics,
and cooking equipment such as that for the Ajinomoto,Meiji, and Denki Meikan companies. Cookpad provides
an analysis tool @tabemiru.com to analyze the search log
data of identity (ID) login users for Cookpad.com. Business suppliers identify customers’ needs, learn from theirperspectives, and make plans to create the value-inusecustomers want based on this service. Both business partners and users in these kinds of services obtain benefits
from Cookpad’s services. It connects the demand andsupply of customers and helps them to understand one
another. Co-created value is built from the service fieldsuch as contests or the Tsukurepo presents that Cookpad
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

CookpadInc.
Support system forpromoting value cocreation

Service field

Organize & manage

Cookpad websites• Provide recipes• Provide easy self-service• Provide advertising, marketing, and market research• Share experience
Information

Information

Business
partners

Contributors(Users)Information

Users

Figure 5. Business model of cookpad.

provides to customers.
The last sector is in advertising, which sells companies
advertisement spots on the Cookpad Website throughadvertising agencies and media representatives. Advertising on its Website is a good choice as Cookpad is oneof the most popular sites for cooking lovers. Business
partners can advertise their products to users and users
can find the information they want from the advertisements posted on Cookpad Websites. As values are beneficial to both kinds of customers, they can collaborate to
extract values they both agree on.

5.2. Supporting Functions (Services) of Cookpad
Inc.
1) For organization and management of the service
field “Ba”
a) Popular brandFirst, it is undeniable that Cookpad is the most wellknown recipe Website in Japan by ranking No. 1 incooking Websites. Cookpad still has pride of place forcooking lovers and housewives despite the various otherinterests of Japanese. Cookpad obtains over one million
recipes from their Websites most of which are contributed by users. This demonstrates strong cooperation bycustomers to develop Cookpad as No. 1. Users consider
Cookpad to be their home on the Net to have fun, to learn
to cook, and to make friends with one another. It is like asmall world in which people are always happy.
Moreover, Cookpad is more competitive than othercompanies by having a huge amount of data on foodrecipes. This Website has more members than any otherproviders in this area. Even big companies like Yahoo
Japan still lose out to Cookpad in the membership battle.
Yahoo Japan Recipe has five million users, which is only
one-third that of Cookpad’s [12]. This affirms the dominance of Cookpad in recipe Website services. It means
the Cookpad brand is very popular with people who love
preparing food because increasing numbers of people
have joined the Website and everybody is contributing
Copyright © 2013 SciRes.

17

efforts to developing the Cookpad database. Cookpad
with its popular brand has the power to make business
partners and users work together and co-create service
values to create mutual satisfaction.
b) Friendly and productive interface
The second function, which is believed to be Cookpad’s strongest weapon is the high quality of its IT infrastructure. Cookpad has created a speedy, easy, and friendly
Website for its customers. As most of Cookpad’s customers are women aged 35 - 54 [9], the company assumed that most of them would not be good at IT technology. A friendly Website could help them find the information they wanted immediately and accurately. As
Cookpad uses state-of-the art security to protect data, thismakes users have confidence and trust in exchanging
information on its site. We know it is very important toensure the safety of personal information because hackers can use that information to harm customers. Suchissues could damage the relationship between firms andcustomers. The Cookpad Website is an enjoyable place
to look for food recipes.
Its strong IT infrastructure also led Cookpad to expand
its services to users using mobile devices. Increasingly
more people are currently stuck with their phones andtables rather than their usual computers. Cookpad understands this trend and made innovations in Website design
to attract more users. Combined with mobile and smartphone services that can be used on the go and in stores,
Cookpad plays a significant and influential role in the
shopping decisions that consumers make in their everyday lives.
2) For promotion of value co-creationa) Uniquely shared experience through additional
recipes
Cookpad has a huge database of food recipes, pictures,and tutorials that can be uploaded for free due to contributions by users. These satisfy the rest of the users. The
information provided by over 14 million users is invaluable and it could help business partners such as food andkitchen appliance companies understand their customers
and prepare goods/services that suit them.
Furthermore, Cookpad lets users upload recipes andpictures of the dishes to the Website in their folders andshare these with other users. Other users who try theserecipes upload small changes to the recipes to improve orprovide more suitable tastes. The process then continues
spirally with other people and enhances the values provided to customers. These experiences certainly are invaluable and more attractive to customers. Clearly, the“shared experience” satisfies customers more than just“information sharing”. It enhances value co-creation byconnecting people to share great experiences aroundcooking. With Cookpad, customers reduce the time theyneed to learn about preparing food and learn from others’
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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

experiences. This is the best service to satisfy their requirements.
b) Online Communications
It is very important to understand customers’ needs inacting as a mediator to connect the requirements of users
and business partners. Cookpad always tries its best to
listen to customers and define problems with customers
to assist them quickly. Consequently, Cookpad lets users
provide feedback online and it responds to all inquires assoon as possible. Cookpad has made an effort to try tocreate an English Website to receive feedback from users.
However, Cookpad, it is not yet as complete as Cookpad.com but it is a good way for English speaking users
to exchange their ideas and knowledge with the company.
This is a particularly clever achievement by Cookpad.
Customers really want their feedback to be listened toand their problems solved. This process secures the relationship between the firm and customers and leads tolong term commitments. The longer customers use services, the more successful a company is.

6. Considerations on Required Functions of
ISFs That Support Two Roles of New
Mediator
Some factors were identified to enable the success of
Hitachi TWX-21 and Cookpad to be understood after thetwo real companies were analyzed. They have similarfunctions that support the co-creation process in service
exchanges. These functions were also categorized to contribute to the two roles of a new service mediator model
based on S-D logic and the service field, which are organization and management of service field “Ba” andpromotion of value co-creation. Organization including
brand management and identification of users’ needs
using strong IT infrastructure are important for management of the service field “Ba”. Also leverage of customers’ knowledge and value and communication for service
value co-creation are important for promotion of value
co-creation between users and service providers. Table 2
summarizes the actual useful functions of the two ISFs

that verified the functions of the new service mediator we
propose.

7. Conclusions
Firms in the new era of customer-centric businesses mustreconsider their business systems to discover customers’
requirements and satisfy these. In this paper, a value
co-creation service mediator was proposed from the perspective of S-D logic to help mediator firms provide
greater value to their customers by co-creation in theservice process. Value co-creation based on S-D logic isthe core process to enhance the productivity of services
thus making customers satisfied with companies. The
service field in the new model is cyber space in which
service values are co-created and used as a mechanism todetermine how satisfied customers are via the co-createdvalues.
Ideas for providing better value co-creation in thebusiness of the service mediator were identified throughcase studies on Hitachi TWX-21 and Cookpad Inc.; thus,
propositional support functions were demonstrated. The
results obtained from the success of the two companies
that used the new service mediator model also affirmed
its effectiveness. Knowledge from interviewing and surveying company staff contributed to defining the required functions for ISFs to gain customers’ satisfaction
and develop business in a sustainable way.
Therefore, this suggested that ISFs should re-consider
their roles in business and use the new service mediatormodel to provide high values in exchanges with customers. This strategy would help firms win customers’ satisfaction and be more competitive in the market. By developing a new service model of ISFs based on S-D logic,
we hope that it will help leverage value co-creation, andenhance collaboration between mediators, suppliers, andusers. Moreover, this new model in the fast changing
service market can be suitable not only for ISFs but also
for other manufacturing companies or retailers. Mediators will contribute to the value creation process and help
all parties collaborate optimally in providing superior

Table 2. Comparison of service mediator models.
Functions

Hitachi TWX-21

Cookpad








Well known brandOver 43,500 users
Ecosystem based on IT
Strong ICT,
IT infrastructure
Huge data center

No. 1 recipe Website
14 million users
User friendly Website

Huge database of users’ information
Effective marketing tools

Leverage customers’ values & knowledgePowerful with eMP, SaaS, and ASP
Trial & error feedbackOver 1 million recipes
Shared experience

Communications



Frontline employees
Help desk
Multiple language supportOnline feedback
Bilingual feedback

Organization (Brand, etc.)

IT Infrastructure (Identification of users’ Needs)

Copyright © 2013 SciRes.

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Service Mediator Model for Value Co-Creation Based on Service Dominant Logic

values by acting as a useful bridge between business
partners and users. The proposed mediator model is indispensable for such new information services in the 21st
century.

No. 4, 2002, pp. 53-62.
[5]

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Journal, Vol. 56, No. 2, 2001, p. 78.

[6]

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[7]

H. Kojima, et al., “Information Organizing and Sharing
Method in Business Media Service for Virtual Manufacturing Enterprise,” Proceedings of International Conference on Systems, Man and Cybernetics, San Diego, 1114 October 1998, pp. 307-312[8]

H. Kiuchi, et al., “TWX-21 Business System Cloud for
Global Corporations,” Hitachi Review, Vol. 61, No. 1,
2012, pp. 8-12

[9]Alexa, 2012.
http://www.alexa.com/siteinfo/cookpad.com#

8. Acknowledgements
We learned a great deal from the successful businesses ofHitachi TWX-21 and Cookpad Inc. to build the new service mediator model in our research. We would particularly like to thank Mr. Kamada who is the Senior Director of Hitachi TWX-21 and staff from the two companies
for the information they kindly shared with us and thediscussions we had with them.

REFERENCES[1]

S. L. Vargo and R. F. Lusch, “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, Vol. 68,
No. 1, 2004, pp. 1-17.

[2]

S. L. Vargo and R. F. Lusch, “Service-Dominant Logic:
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[3]

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[4]

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Intermediaries,” MIT Sloan Management Review, Vol. 43,

Copyright © 2013 SciRes.

19[10] I. Nonaka and H. Takeuchi, “The Knowledge Creating
Company: How Japanese Companies Create the Dynamics of Innovation,” Oxford University Press, New York,
1995.
[11] S. L. Vargo, P. P. Maglio and M. A. Akaka, “On Valueand Value Co-Creation: A Service Systems and Service
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[12] A. Westlake, “Yahoo Japan Partners with Popular Recipe
Portal Cookpad, Media Release,” Japan Daily Press, 2012.
http://japandailypress.com/yahoo-japan-partners-with-pop
ular-recipe-portal-cookpad-083743

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