A Conceptual Framework of Reverse Logistics Impact on Firm Performance

This study aims to examine the reverse logistics factors that impact upon firm performance. We review reverse logistics factors under three research streams: (a) resource-based view of the firm, including: Firm strategy, Operations management, and Customer loyalty (b) relational theory, including: Supply chain efficiency, Supply chain collaboration, and institutional theory, including: Government support and Cultural alignment. We measured firm performance with 5 measures: profitability, cost, innovativeness, perceived competitive advantage, and perceived customer satisfaction. We discuss implications for research, policy and practice

How to grow a brand: retain or acquire customers?

Journal ArticleWhile customer acquisition is clearly important for new brands, mature brands are often said to rely on defection management for maintenance and growth. Yet the theory to support this approach has been subject to very little empirical investigation. How do brands actually increase the size of their customer base? Through superior acquisition or by reducing customer defection? Or some mixture of both? Conversely, do brands decline through deficient acquisition or excessive defection? This work analyzes changes in ‘first brand loyal’ customers to answer these questions, using a combination of panel data on the prescribing behavior of doctors and a cross-sectional tracking survey for residential finance. This study is the first research to compare defection and acquisition against stochastic benchmarks for customer churn under stationary conditions. The results are surprising: for both growth and decline, unusual acquisition plays a stronger role than unusual defection. This finding demonstrates that acquisition has been under-rated in the past, and implies that prospect management is at least as important as defection reduction. A simulation shows that unusual acquisition also accounts for far more variation in profit than does unusual defection.n/

Using Hybrid Agent-Based Systems to Model Spatially-Influenced Retail Markets

One emerging area of agent-based modelling is retail markets; however, there are problems with modelling such systems. The vast size of such markets makes individual-level modelling, for example of customers, difficult and this is particularly true where the markets are spatially complex. There is an emerging recognition that the power of agent-based systems is enhanced when integrated with other AI-based and conventional approaches. The resulting hybrid models are powerful tools that combine the flexibility of the agent-based methodology with the strengths of more traditional modelling. Such combinations allow us to consider agent-based modelling of such large-scale and complex retail markets. In particular, this paper examines the application of a hybrid agent-based model to a retail petrol market. An agent model was constructed and experiments were conducted to determine whether the trends and patterns of the retail petrol market could be replicated. Consumer behaviour was incorporated by the inclusion of a spatial interaction (SI) model and a network component. The model is shown to reproduce the spatial patterns seen in the real market, as well as well known behaviours of the market such as the "rocket and feathers" effect. In addition the model was successful at predicting the long term profitability of individual retailers. The results show that agent-based modelling has the ability to improve on existing approaches to modelling retail markets.Agents, Spatial Interaction Model, Retail Markets, Networks

Classification of Empirical Work on Sales Promotion: A Synthesis for Managerial Decision Making

Sales Promotion activities have gained strategic focus as markets are getting complex and competitive. Key managerial concerns in this area are budget allocation across elements of promotions as well as trade vis. consumer promotion, how to design individual sales promotion techniques and a calendar in face of competitive promotions, how to manage them and evaluate the short-term and long-term impact of the same. The objective of this paper is to present, through Meta-analysis, an overview of recent contributions appearing in scholastic journals relevant to the field of Sales Promotion, to classify them into different classificatory framework, report key findings, highlight the managerial implications and raise issues. The database used is the EBSCO host available on VSLLAN (Library)- Indian Institute of Management Ahmedabad). The selection procedure consisted of peer-reviewed scholarly contributions for recent five year period. Out of more than 700 articles 64 article were selected which were analyzed for classifying them into • Perspective addressed: Manufacturer, retailer or consumer. • Market [country where the research was undertaken] • Type of promotion activity addressed - coupon, contest, price cut etc. • Management function addressed: planning, implementation, control [evaluation] • It was found that majority of the articles addressed manufacturers perspectives ; almost all studies were done in developed countries ; coupon as a consumer promotion tool was widely researched; and more than half of the articles were addressing planning related issues. Finally attempt has been made to synthesize managerial implications of the studies under broad topic areas for guidelines for managers.

Paying for Status? - The effect of frequent flier program member status on air fare choice

Frequent flier programs (FFPs) are said to affect airline customer behaviour such that revenue of sponsoring airlines increases. To this end prior research relies on assumptions of competition, lock-in effects and variations in scale and scope of FFPs. Whether a FFP by itself induces a price premium remains unanswered. In an effort to shine some light on this question, we apply discrete choice analysis to a new proprietary data set of actual frequent flier member flight behaviour (fares paid, FFP points received) over a 12-months period. We take advantage of the variations in the structure of FFPs (Gold, Silver and Bronze tier levels), to assess both the existence of a FFP price premium and the price premiums average monetary value in US$ per FFP member. Our findings suggest that FFP members are willing to pay a price premium of up to six percent, which is directly attributable to the FFP.discrete choice analysis, loyalty programs, relationship marketing, price premium, frequent flier program, CRM

Customer Loyalty and Lifetime Value: An Empirical Investigation of Consumer Packaged Goods

It is traditionally accepted that customer loyalty is critical for a firm’s profitability. Recent research,however, questions the effects of customer loyalty on profitability. In light of this controversy, we examine the financial effects of customer loyalty using the framework of customer lifetime value (CLV). Our analysis reveals that in the area of consumer packaged goods, customer loyalty is positively associated with customer revenue and customer retention, both of which drive CLV. Thus, customer loyalty is indeed a predictor of long-term customer profitability to a firm. For marketers, customer loyalty continues to be a legitimate end goal to pursue in marketing management

Customer Loyalty and Lifetime Value: An Empirical Investigation of Consumer Packaged Goods

It is traditionally accepted that customer loyalty is critical for a firm’s profitability. Recent research,however, questions the effects of customer loyalty on profitability. In light of this controversy, we examine the financial effects of customer loyalty using the framework of customer lifetime value (CLV). Our analysis reveals that in the area of consumer packaged goods, customer loyalty is positively associated with customer revenue and customer retention, both of which drive CLV. Thus, customer loyalty is indeed a predictor of long-term customer profitability to a firm. For marketers, customer loyalty continues to be a legitimate end goal to pursue in marketing management

THE CUSTOMER LIFETIME VALUE CONCEPT AND ITS CONTRIBUTION TO CORPORATE VALUATION

The shareholder value and the customer lifetime value approach are conceptually and methodically analogous. Both concepts calculate the value of a particular decision unit by discounting the forecasted net cash flows by the risk-adjusted cost of capital. However, virtually no scholarly attention has been devoted to the question if any of the components of the shareholder value could be determined in a more marketoriented way using individual customer lifetime values. Therefore, the main objective of this paper is to systematically explore the contribution of both concepts to the field of corporate valuation. At first we present a comprehensive calculation method for estimating both the individual lifetime value of a customer and the customer equity. After a critical examination of the shareholder value concept, a synthesis of both value approaches allowing for a disaggregated and more realistic corporate valuation will be presented.Customer Lifetime Value, Shareholder Value, Corporate Valuation

MARKET SHARE AND CUSTOMER EQUITY MEASUREMENT USING MARKOV CHAIN

Various techniques have been developed to measure firm's market share and the return on investment (ROI) of firm's marketing expenditures. However, most of those techniques are usually used to assess the past performance of a marketing program, using history of longitudinal data instead of expected future performance of a planned marketing program. In the absence of historical data base, measurements of expected ROI could still be carried out using a cross sectional survey, evaluating customer future purchase intentions as influenced by a new loyalty program to be launched by the firm in near future. Using survey of domestic airline passengers and Markov Chain approach, the model incorporates competition whereby customers are free to switch from one carrier to another from time to time. Expected ROI of loyalty program is measured by changes in the customer equity. Using MatLab software, future market share of Lion Air, Mandala Air, and Merpati Airline could be estimated quite accurately, and subsequently, changes in customer equity could be measured. Loyalty programs indeed induce changes in customers' future share of wallet and customer equity. Managers are encouraged to regularly conduct customer survey to guide them prior to launching a marketing action, using changes in customer equity as the ultimate dependent variable of ROI measurement

Predicting Customer Lifetime Value in Multi-Service Industries

Customer lifetime value (CLV) is a key-metric within CRM. Although, a large number of marketing scientists and practitioners argue in favor of this metric, there are only a few studies that consider the predictive modeling of CLV. In this study we focus on the prediction of CLV in multi-service industries. In these industries customer behavior is rather complex, because customers can purchase more than one service, and these purchases are often not independent from each other. We compare the predictive performance of different models, which vary in complexity and realism. Our results show that for our application simple models assuming constant profits over time have the best predictive performance at the individual customer level. At the customer base level more complicated models have the best performance. At the aggregate level, forecasting errors are rather small, which emphasizes the usability of CLV predictions for customer base valuation purposes. This might especially be interesting for accountants and financial analysts.forecasting;value;customer relationship management;customer lifetime value;customer segmentation;database marketing;interactive marketing