Measuring Customer Value and Market Dynamics for New Products of a Firm:An Analytical Construct for Gaining Competitive Advantage

The role of customer value has been largely recognized over time by the firms as an instrument towards stimulating market share and profit optimization. The customer values for a new product of firm in competitive markets are shaped more by habits, reinforcement effects, and situational influences than strongly-held attitudes. A strong and sustainable customer value associated with a new product launched by a firm may also lead to build the customer loyalty in the long run. An analysis of the new product-market structuring based on customer value may be developed well within the microeconomic framework of a firm. The measure of customer value as the efficiency of new product may be viewed from the customer’s perspective towards a ratio of outputs (e.g., perceived use value, resale value, reliability, safety, comfort) that customers obtain from a product relative to inputs (price, running costs) that customers have to deliver in exchange. However, the aggregate returns on the customer value towards the new product from the perspective of a firm may be observed manifesting in enhancing the market share, market coverage and augmenting profit in a given market. There has not been many contributions emerged in the past addressing the measurement of the customer value as an intangible asset of the firms, though substantial literature is available discussing the customer relations and loyalty building perspectives. This paper attempts to critically examine the available literature on the subject, discuss a model that provides a framework for analyzing the variables associated with customer value and to identify potential research areas. A basic premise of the paper is that the focus should be on maximizing total customer value and customer satisfaction which are inter-dependent in the decision making process towards buying new products. The framework of the construct is on a proposed model which integrates all aspects so as to maximize the potential of the organization and all its subsystems to create and sustain satisfied customers. The discussion in the paper on the customer value gaps in the process of marketing new products explores the possible situations that may lead to lower the customer value.New product management, customer value measurement, market coverage, aggregate returns, market penetration, model construct and estimation, profitability

Ten Conversations about Identity Preservation: Implications for Cooperatives

Motivation: While it appears the modern economy demands ever increasing amounts of differentiation, opportunities for grain producers to create and capture significant new sources of value remains elusive. Opportunities appear to loom large to help remove risk and improve quality in the grain supply chain through preservation of product identity, producers, producer groups, and cooperatives are frustrated at the low level of value available to them from IP demand. Why do premiums remain low? And, what is the role of group action in these new differentiated markets? Objectives: This research report helps to explain this apparent paradox underlying the economics of the value proposition for IP grains. Methodology: Needs assessments were conducted on procurement executives using a semi-structured instrument. Results: The study demonstrates that understanding identity preservation business opportunities requires an understanding of the buy-side proposition. Respondents described how they balance the risk mitigation and market uplift features of a supply offering with the risks of narrowing the supply base. A model of the buyer's calculus is constructed. The results show how for producers and producer groups to drive value up the chain they need to shift away from solely a new product focus. Instead attention needs to be directed towards technologies, delivery systems, and organizational models that when bundled with new products make end-users more competitive. A second insight was the limited role of group action in meeting end-user needs. Where value markets existed, internalized groups rather than "arm's length" group transactions were the norm. Plan for Discussion: The cooperative movement was grounded in group action giving individual producers power in the market. The motivation to unite was very clear. In the post-industrial agrifood system though, why do buyers want to purchase from a group? What is the role of the group, from a buy-side perspective, in the modern economy? How should effective groups be structured? Key Words: identity preservation, supply chain management, value creation, group actionidentity preservation, supply chain management, value creation, group action, Agribusiness,

Retail structure and product variety

Nous examinons l'impact de la structure horizontale et verticale d'un marché sur les incitations à l'innovation et sur la variété des produits. Nous considérons le marché d'un bien homogène où un producteur peut innover pour étendre sa gamme de produits en créant un nouveau produit substitut. Le coût de lancement du nouveau produit est fixe, et réparti entre les activités de production et de distribution. Nous montrons qu'une chaîne intégrée verticalement offre une plus grande variété de produits qu'une chaîne de monopoles. Si le coût de lancement du nouveau produit est réparti équitablement entre les deux secteurs, ou supporté essentiellement par l'amont, une concurrence imparfaite dans le secteur aval ne restaure que partiellement les incitations à innover de la structure verticale. En revanche, si ce coût est supporté principalement par le secteur aval, la concurrence en aval peut amener plus d'innovation que dans une structure verticalement intégrée.

Competitive Advantage and Sustainability in the Mobile Phone Industry

How a business achieves and sustains a competitive advantage has long been the central focus of strategic management research. The fundamental basis of long-run success of a firm is the achievement and maintenance of a sustainable competitive advantage. A firm’s competitive advantage can result either from implementing a value-creating strategy not simultaneously being employed by current or prospective competitors or through superior execution of the same strategy as competitors. Intensified competition has put managers under constant pressure to come up with the requisite strategy to be on top of the competition. The purpose of this thesis is to explore the process by which firms can attain competitive advantage. Since attaining competitive advantage alone does not guarantee the necessary long run success that firms require to survive, the study further looks at the possibility of firms to sustain their competitive advantage in order to be ahead of their rivals. The study uses a qualitative case study. The findings are based on the market performance of three of the major players in the mobile phone industry over a ten year period. Further, in line with the framework of the study, a comparison of the value activities of the case companies was carried out in order to give meaning to the state of market performance of the case companies. It was found, that by running optimum value activities, a firm can benefit from linkages within these activities as a result of which it can offer value to its end users as a low cost or unique product provider. This serves as the means of attaining competitive advantage. Further, sustaining a firm’s competitive advantage was found to be feasible through the existence of differences in a firm’s capabilities and that of competitors.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format

Trade, FDI, and the Organization of Firms

New developments in the world economy have triggered research designed to better understand the changes in trade and investment patterns, and the reorganization of production across national borders. Although traditional trade theory has much to offer in explaining parts of this puzzle, other parts required new approaches. Particularly acute has been the need to model alternative forms of involvement of business firms in foreign activities, because organizational change has been central in the transformation of the world economy. This paper reviews the literature that has emerged from these efforts. The theoretical refinements have focused on the individual firm, studying its choices in response to its own characteristics, the nature of the industry in which it operates, and the opportunities afforded by foreign trade and investment. Important among these choices are organizational features, such as sourcing strategies. But the theory has gone beyond the individual firm, studying the implications of firm behavior for the structure of industries. It provides new explanations for trade structure and patterns of FDI, both within and across industries, and has identified new sources of comparative advantage.

Trade, FDI, and the Organization of Firms

New developments in the world economy have triggered research designed to better understand the changes in trade and investment patterns, and the reorganization of production across national borders. Although traditional trade theory has much to offer in explaining parts of this puzzle, other parts required new approaches. Particularly acute has been the need to model alternative forms of involvement of business firms in foreign activities, because organizational change has been central in the transformation of the world economy. This paper reviews the literature that has emerged from these efforts. The theoretical refinements have focused on the individual firm, studying its choices in response to its own characteristics, the nature of the industry in which it operates, and the opportunities afforded by foreign trade and investment. Important among these choices are organizational features, such as sourcing strategies. But the theory has gone beyond the individual firm, studying the implications of firm behavior for the structure of industries. It provides new explanations for trade structure and patterns of FDI, both within and across industries, and has identified new sources of comparative advantage.

Measuring Variability Factors in Consumer Values for Profit Optimization in a Firm – A Framework for Analysis

Consumer value may be defined as a tool to measure the prolonged satisfaction and an on-going propensity to buy the product and services. Though there are many issues floating in an on-going debate about the consumer value, it may be argued that the consumer value in terms of the level of satisfaction is evident in providing a revenue stream to the company with high involvement and thereby the repeat purchase behavior is of strategic importance to management. The consumer value concept is utilized to assess product performance and eventually to determine the competitive market structure and the product-market boundaries. The consumer value may be measured as the product efficiency viewed from the consumer’s perspective, i.e., as a ratio of outputs (e.g., resale value, reliability, safety, comfort) that consumers obtain from a product relative to inputs (price, running costs) that consumers have to deliver in exchange. The efficiency value derived can be understood as the return on the consumer’s investment. Products offering a maximum consumer value relative to all other alternatives in the market are characterized as efficient. This paper develops the framework for measuring the consumer values in reference to establish the long run relationship by the firm and optimize its profit levels. The discussions in the paper attempts to endure the core issues of consumer values in retailing the products and services as how to conceptualize consumer values, how to measure it, and how to manage it.Consumer behaviour, Value measurement, Consumer satisfaction, Market demand, Profitability of firms

Purposeful empiricism: how stochastic modeling informs industrial marketing research

It is increasingly recognized that progress can be made in the development of integrated theory for understanding, explaining and better predicting key aspects of buyer–seller relationships and industrial networks by drawing upon non-traditional research perspectives and domains. One such non-traditional research perspective is stochastic modeling which has shown that large scale regularities emerge from the individual interactions between idiosyncratic actors. When these macroscopic patterns repeat across a wide range of firms, industries and business types this commonality suggests directions for further research which we pursue through a differentiated replication of the Dirichlet stochastic model. We demonstrate predictable behavioral patterns of purchase and loyalty in two distinct industrial markets for components used in critical surgical procedures. This differentiated replication supports the argument for the use of stochastic modeling techniques in industrial marketing management, not only as a management tool but also as a lens to inform and focus research towards integrated theories of the evolution of market structure and network relationships