Under Service-Dominant (S-D) logic, a service is defined as the application of competences (skills and knowledge) for the benefit of customers [Vargo & Lusch, 2008], and manifests within the context of use by customers, where the value-in-use is realised. S-D logic focuses on the interaction between the firm and the customer, rather than on the transfer of goods, as servicing customer needs is the purpose for seeking a market exchange [Vargo 2008].
The fulfilment of these customer needs occurs in the unique context of his or her own life, which naturally affects the value-in-use, enhancing or disrupting their value co-creation with the firm's offering. Therefore, market exchanges are more generally concerned with solutions and phenomenological events (contextual use) rather than ownership [Lusch, Vargo and Wessels, 2008]. Put simply, context is concerned with when actions occur, i.e. verbs rather than nouns.
This provides the basis of a framework in which to understand and explain context with the aim of being able to identify contextual invariances, ie when multiple individuals have the same contexts (a cluster of contexts) for value co-creation. However, to appreciate the significance of a contextual invariance, one must consider their potential for greater value co-creation from when variety can be attenuated.
Vargo, S. L. and Lusch, R.F. (2008) Service-Dominant Logic: Continuing the Evolution, Journal of the Academy of Marketing Science (36:1), pp. 1-10.