Customer Relationship Dissolution - What Do We Know and What Do We Need to Know?

Our paper can be seen as a supplement to Halinen-Kaila and Tähtinen' s (2000) review of different direct research approaches on the ending of exchange relationships. Our purpose is to illuminate the borderline between research explicitly focusing on ending and research implicitly considering ending of relationships. Another purpose is to give an overview of how researchers within the Nordic School of Service Management and Nordic School of Relationship Marketing have approached customer relationship ending. A third purpose is to put forward a managerial perspective and managerial issues related to relationship ending. Finally we present some conclusions regarding further research avenues concerning relationship ending.

Customer Needing - Conceptualising Industrial Service from a Customer Perspective

Views on industrial service have conceptually progressed from the output of the provider’s production process to the result of an interaction process in which the customer also is involved. Although there are attempts to be customer-oriented, especially when the focus is on solutions, an industrial company’s offering combining goods and services is inherently seller-oriented. There is, however, a need to go beyond the current literature and company practices. We propose that what is needed is a genuinely customer-based parallel concept to offering that takes the customer’s view and put forward a new concept labelled customer needing. A needing is based on the customer’s mental model of their business and strategies which will affect priorities, decisions, and actions. A needing can be modelled as a configuration of three dimensions containing six functions that create realised value for the customer. These dimensions and functions can be used to describe needings which represent starting points for sellers’ creation of successful offerings. When offerings match needings over time the seller should have the potential to form and sustain successful buyer relationships.

Simulating and Forecasting the Demand for New Consumer Durables

A diffusion/replacement model for new consumer durables designed to be used as a long-term forecasting tool is developed. The model simulates new demand as well as replacement demand over time. The model is called DEMSIM and is built upon a counteractive adoption model specifying the basic forces affecting the adoption behaviour of individual consumers. These forces are the promoting forces and the resisting forces. The promoting forces are further divided into internal and external influences. These influences are operationalized within a multi-segmental diffusion model generating the adoption behaviour of the consumers in each segment as an expected value. This diffusion model is combined with a replacement model built upon the same segmental structure as the diffusion model. This model generates, in turn, the expected replacement behaviour in each segment. To be able to use DEMSIM as a forecasting tool in early stages of a diffusion process estimates of the model parameters are needed as soon as possible after product launch. However, traditional statistical techniques are not very helpful in estimating such parameters in early stages of a diffusion process. To enable early parameter calibration an optimization algorithm is developed by which the main parameters of the diffusion model can be estimated on the basis of very few sales observations. The optimization is carried out in iterative simulation runs. Empirical validations using the optimization algorithm reveal that the diffusion model performs well in early long-term sales forecasts, especially as it comes to the timing of future sales peaks.

Exploring Marketing in Micro Firms

Purpose - The purpose of the paper is to explore the practice of marketing in micro firms. Which are the challenges micro firms encounter and how do they handle them? Methodology - The research methodology is based on the theory-in-use approach (Zaltman, Heffring & LeMasters 1982) in order to inductively explore the practice of marketing in micro firms. The empirical findings rest on ten case studies, where data has been generated through repeated interactions with each case. Findings - The empirical findings show that micro firms handle their marketing challenges in a distinctive manner, by creatively using available resources and network relations. Marketing in micro firms is largely about a long-term, gradual development of a position on the market. This process we label germinal marketing. Two key dimensions of germinal marketing were identified: “earning your position” and “being your brand”. Research limitations and implications - The findings rest on an explorative study consisting of ten cases and the general applicability of the results need to be validated by further studies. These cases are however sufficient to illuminate the need for further research into the area. Value of the paper - The value of the paper is twofold. First, it expands the theory-in-use approach, and presents a research method for successful inductive empirical studies of small firm phenomena. Secondly, the paper widens our understanding of the marketing reality and practice of micro firms, identifying new dimensions of marketing and revealing the strategic implications of ordinary business activities.

What Can A Service Logic Offer Marketing Theory

The goods-dominated marketing model has major shortcomings as a guiding marketing theory. Its marketing mix approach is mainly geared towards buying and does not include consumption as an integral part of marketing theory. Although it is during the process of consuming goods and services that value is generated for customers and the foundation for repeat purchasing and customer relationships are laid, this process is left outside the scope of marketing. The focus in service marketing is not on a product but on interactions in service encounters. Consumption has become an integral part of a holistic marketing model. Other than standardized goods-based value propositions can be better understood when taking a servicebased approach. It is concluded that marketing based on a goods logic is but a special case of marketing based on a service logic and applicable only in certain contexts with standardized products.

From One Segment to a Segment of One - The Evolution of Market Segmentation Theory

The purpose of this study was to deepen the understanding of market segmentation theory by studying the evolution of the concept and by identifying the antecedents and consequences of the theory. The research method was influenced by content analysis and meta-analysis. The evolution of market segmentation theory was studied as a reflection of evolution of marketing theory. According to this study, the theory of market segmentation has its roots in microeconomics and it has been influenced by different disciplines, such as motivation research and buyer behaviour theory. Furthermore, this study suggests that the evolution of market segmentation theory can be divided into four major eras: the era of foundations, development and blossoming, stillness and stagnation, and the era of re-emergence. Market segmentation theory emerged in the mid-1950’s and flourished during the period between mid-1950’s and the late 1970’s. During the 1980’s the theory lost its interest in the scientific community and no significant contributions were made. Now, towards the dawn of the new millennium, new approaches have emerged and market segmentation has gained new attention.

Word-of-mouth-forskning – Från ett beteendevetenskapligt perspektiv mot ett företagsperspektiv

Syftet med denna artikel är att systematisera och analysera litteratur som anknyter till word-of-mouth-kommunikation (hädanefter WOM). Med konsumentdominerad marknadskommunikation avses att konsumenterna sinsemellan oberoende av företaget söker och sprider marknadsinformation. Den enda motsvarande litteraturanalys som förefaller att finnas publicerad är fyrtio år gammal (Arndt 1967). Sedan dess har det tillkommit en ansenlig mängd företagsekonomisk forskning som tydligt avviker från Johan Arndts, vilken huvudsakligen baserade sig den beteendevetenskapliga litteraturen.

Customer Commitment and Key Account Management

What is the nature of customer commitment in business-to-business relationships and what are its antecedents? What Key Account Management practices help to build customer commitment? Commitment is an important element of Key Account Management since customer relationships are built upon a the foundation of commitment. Building long-term key account relationships occurs by enhancing and maintaining their commitment. Customer commitment has various antecedents, and managing commitment involves focusing on these antecedents. This paper explains the nature of commitment and describes its antecedents. It also suggests how to manage each of these antecedents to strengthen customer commitment.

International Portfolio Investments and The Informational Value of Trade

A large volume of literature suggests that information asymmetry resulting from the spatial separation between investors and investments have a significant impact on the composition of investors’ domestic and international portfolios. I show that institutional factors affecting trading in tangible goods help explain a substantial portion of investors’ spatial bias. More importantly, I demonstrate that an information flow medium with breadth and richness directly linked to the bilateral commitment of resources between countries, that I measure by their trading intensity in tangible goods, is consistent with the prevailing country allocation in investors’ international portfolios.

Mentoring in an Entrepreneurial Setting - The Mentor's Perspective

This paper discusses mentoring from the mentors' point of view in an entrepreneurial setting. The aim of the paper is to present why mentoring can be considered important for entrepreneurs who are mentors and under what circumstances mentoring is valuable for the mentor. A pilot mentorprogramme was conducted among women entrepreneurs during 1998. A study was made in order to examine the mentors’ perception of the programme. Firstly mentoring and entrepreneurship in Finland are discussed briefly. Secondly the results of the study are presented. The results of the study show that mentoring can be valuable for the mentors both on a vocational and a personal level. However, it is important to choose the mentees of the programme on a rather strict basis. The results demonstrate a need to be careful in choosing mentees.

Samarbete mellan konkurrenter - en undersökning av österbottniska sm-företag

Under senare tid har förekomsten av samarbete mellan konkurrerande sm-företag ökat. Forskningen kring ämnet har dock bedrivits i mindre skala, framför allt om man beaktar finländska (nordiska) förhållanden. Syftet med denna undersökning är att kartlägga förekomsten av samarbete mellan konkurrerande sm-företag i Österbotten (Finland), samt beskriva dessa. Gällande demografiska variabler jämförs dessa företag även med sm-företag som inte samarbetar. Data insamlades genom en enkät utskickad i november 2001 till 345 sm-företag i Österbotten. Svarsprocenten var 35.1. Av de respondenter som besvarade enkäten, var 47.9 procent involverade i ett eller flera samarbeten med ett eller flera företag som var deras konkurrenter. Samarbete mellan konkurrenter är således inte ett ovanligt fenomen, utan innefattar allt från informella, operativa samarbeten till formella, strategiskt viktiga samarbeten. Samarbete inom produktion var den mest vanligt förekommande formen av samarbete. Partnern kom från Finland, även om målmarknaderna för samarbetet fanns både i Finland och i utlandet. Denna undersökning kunde inte identifiera någon större skillnad mellan de sm-företag som samarbetade med konkurrenter och de sm-företag som inte samarbetade. Det intressanta är således att det inte verkar finnas några skillnader vad gäller ålder, omsättning, omsättningsökning, underleverans- och exportverksamhet mellan de samarbetande och de icke samarbetande företagen. Skillnaderna bör således sökas i andra variabler. Den enda signifikanta skillnaden kunde upptäckas i upplevelsen av konkurrens. Tidigare forskning har identifierat att osäkerhet i konkurrensen är ett incitament till att börja samarbeta med konkurrenter. Denna undersökning förstärker detta antagande. De samarbetande företagen upplevde att konkurrensen var hårdare än de icke samarbetande företagen. Bland de samarbetande företagen var det speciellt de mindre (med en personalstyrka mellan 10 och 50 arbetstagare) som upplevde att konkurrensen var hård. Undersökningen har finansierats med stipendiemedel från Sparbanksstiftelsen i Vasa och Handlande Gustav Svanljungs fond.

What Determines Stock Option Contract Design?

This paper analyzes factors driving the design of stock option plans for Finnish firms. We examine determinants of the scope of plans, exercise price, target group, and dividend protection. The scope is found to be negatively related to Tobin’s Q and positively related to proxies for monitoring costs. The scope is also greater in broad-based plans, and in plans with dividend protection. Prior stock return is found to be negatively related to the size of the premium (out-of-the-moneyness), whereas dividend protection increases the premium. The results also suggest that investment intensity, cash flow, and monitoring costs are associated with the likelihood of granting premium (out-of-the-money) stock options. Furthermore, the likelihood of granting broad-based plans is increasing in institutional ownership and cash flow constraints, and decreasing in firm size. Broad-based plans are also more likely among firms in growth industries. We find support that the likelihood of dividend protection is decreasing in foreign ownership. In addition, firms paying zero-dividends are less likely to include dividend protection, whereas higher unsystematic risk is associated with a greater likelihood of including dividend protection.

Analysts' Accuracy of Estimation and the Relative Trading Volume

This study contributes to the neglect effect literature by looking at the relative trading volume in terms of value. The results for the Swedish market show a significant positive relationship between the accuracy of estimation and the relative trading volume. Market capitalisation and analyst coverage have in prior studies been used as proxies for neglect. These measures however, do not take into account the effort analysts put in when estimating corporate pre-tax profits. I also find evidence that the industry of the firm influence the accuracy of estimation. In addition, supporting earlier findings, loss making firms are associated with larger forecasting errors. Further, I find that the average forecast error increased in the year 2000 – in Sweden.

Does Uncertainty Affect Investment and Labor Demand?

This paper analyzes the effect of uncertainty on investment and labor demand for Finnish firms during the time period 1987 – 2000. Utilizing a stock return based measure of uncertainty decomposed into systematic and idiosyncratic components, the results reveal that idiosyncratic uncertainty significantly reduces both investment and labor demand. Idiosyncratic uncertainty seems to influence investment in the current period, whereas the depressing effect on labor demand appears with a one-year lag. The results provide support that the depressing effect of idiosyncratic uncertainty on investment is stronger for small firms in comparison to large firms. Some evidence is reported regarding differential effects of uncertainty on labor demand conditional on firm characteristics. Most importantly, the depressing effect of lagged idiosyncratic uncertainty on labor demand tends to be stronger for diversified firms compared with focused firms.