This paper suggests an extension to the Vargo and Lusch (2004) proposal where the fundamental unit of analysis is not the exchange itself but a marketing system within which the service dominant exchange is embedded. The relevant marketing system could range from a micro-system in which the reciprocal creation of value through a single transaction between a buyer and seller is considered, to purposeful, structured, or emergent systems (such as supply chains, business ecosystems, or shopping malls), to the aggregate marketing system. Five criteria are suggested that should be met by any proposed dominant logic or world view. The system-embedded service-dominant (SESD) logic meets all five criteria and may reverse the growing fragmentation occurring in both micro- and macromarketing. It redefines the relationship between micro- and macromarketing and in focusing attention on a meso level of analysis it opens up new horizons for research. In a multidisciplinary setting it highlights what is intrinsic to marketing—exchange within a marketing systems framework.
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