Value based pricing and marketing of marine engines

Objective of the thesis is to create a value based pricing model for marine engines and study the feasibility of implementing such model in the sales organization of a specific segment in the case company’s marine division. Different pricing strategies, concept of “value”, and how perceptions of value can be influenced through value based marketing are presented as theoretical background for the value based pricing model. Forbis and Mehta’s Economic Value to Customer (EVC) was selected as framework to create the value based pricing model for marine engines. The EVC model is based on calculating and comparing life-cycle costs of the reference product and competing products, thus showing the quantifiable value of the company’s own product compared to competition. In the applied part of the thesis, the components of the EVC model are identified for a marine diesel engine, the components are explained, and an example calculation created in Excel is presented. When examining the possibilities to implement in practice a value based pricing strategy based on the EVC model, it was found that the lack of precise information on competing products is the single biggest obstacle to use EVC exactly as presented in the literature. It was also found that sometimes necessary communication channels are missing and that there is simply a lack of interest from some clients and product end-users part to spend time on studying the life-cycle costs of the product. Information on the company’s own products is however sufficient and the sales force is capable to communicate to sufficiently high executive levels in the client organizations. Therefore it is suggested to focus on quantifying and communicating the company’s own value proposition. The dynamic nature of the business environment (variance in applications in which engines are installed, different clients, competition, end-clients etc.) means also that each project should be created its own EVC calculation. This is demanding in terms of resources needed, thus it is suggested to concentrate on selected projects and buyers, and to clients where the necessary communication channels to right levels in the customer organization are available. Finally, it should be highlighted that as literature suggests, implementing a value based pricing strategy is not possible unless the whole business approach is value based.

The effects of Australian tall poppy attitudes on American value based leadership theory

A survey study of twenty-two Australian CEOs and their subordinates assessed relationships between Australian leader motives, Australian value based leader behaviour, subordinate tall poppy attitudes and subordinate commitment, effectiveness, motivation and satisfaction (CEMS). On the whole, the results showed general support for value based leadership processes. Subsequent regression analyses of the second main component of Value Based Leadership Theory, value based leader behaviour, revealed that the collectivistic, inspirational, integrity and visionary behaviour sub-scales of the construct were positively related with subordinate CEMS. Although the hypothesis that subordinate tall poppy attitudes would moderate value based leadership processes was not clearly supported, subsequent regression analyses found that subordinate tall poppy attitudes were negatively related with perceptions of value based leader behaviour and CEMS. These findings suggest complex relationships between the three constructs, and the proposed model for the Australian context is accordingly amended. Overall, the research supports the need to consider cultural-specific attitudes in management development.

A importância da gestão baseada na criação de valor para o acionista (Value-Based Management): o caso do Grupo Galp Energia

A avaliação de empresas sempre constituiu um tema de elevada reflexão, sendo que vários especialistas tentam encontrar os modelos que melhor se adaptam a situações específicas e para as quais precisam de determinar um valor. No contexto empresarial português começa a ganhar significância a prática da gestão orientada para a criação de valor (Value-Based Management). O conceito de Value-Based Management assistiu a um particular desenvolvimento nos últimos 20 anos como resultado da globalização e desregulamentação dos mercados financeiros, dos avanços nas tecnologias de informação e do aumento da importância dos investidores institucionais. Vários analistas apresentaram evidência de que as empresas que adotam sistemas VBM melhoram o seu desempenho económico em relação a outras de dimensão semelhante no mesmo setor. É neste contexto que o EVA (Economic Value Added) se apresenta como uma métrica de desempenho privilegiada nos processos de controlo das decisões estratégicas tomadas. No presente trabalho pretendemos abordar o conceito da gestão baseada na criação de valor e a sua importância para o acionista, o que implica rever outros modelos de avaliação tradicionais baseados no valor contabilístico. Como métrica de avaliação do desempenho passado da empresa ao nível da criação de valor vamos dar particular importância ao estudo do EVA, fazendo referência à possível correlação entre esta métrica e o MVA (Market Value Added). O objetivo principal é analisar empiricamente a relação do EVA como medida de desempenho associada à criação de valor para os acionistas com a performance da empresa. Com efeito, vamos efetuar um estudo de caso, que vai incidir sobre um grupo empresarial português, referência no seu setor de atividade, o Grupo Galp Energia, cotado na Euronext Lisbon. Pensamos que a crescente prática da gestão baseada na criação de valor nas empresas cotadas em Portugal e a necessidade de aferir os resultados desta, tornam esta investigação pertinente, para além do facto de serem poucos os estudos empíricos à questão da criação de valor e a sua correlação com o valor acrescentado de mercado e com o valor de mercado dos capitais próprios das empresas cotadas em Portugal.

Indoor location-based analytics systems: Portuguese market compettive assessment and entry procing strategy of BIPs' technology in Sonae Sierra Shopping malls stores

This project attempts to provide an in-depth competitive assessment of the Portuguese indoor location-based analytics market, and to elaborate an entry-pricing strategy for Business Intelligence Positioning System (BIPS) implementation in Portuguese shopping centre stores. The role of industry forces and company’s organizational resources platform to sustain company’s competitive advantage was explored. A customer value-based pricing approach was adopted to assess BIPS value to retailers and maximize Sonae Sierra profitability. The exploratory quantitative research found that there is a market opportunity to explore every store area types with tailored proposals, and to set higher-than-tested membership fees to allow a rapid ROI, concluding there are propitious conditions for Sierra to succeed in BIPS store’s business model in Portugal.

Quantifying the time for accurate EEG decoding of single value-based decisions.

BACKGROUND: Recent neuroimaging studies suggest that value-based decision-making may rely on mechanisms of evidence accumulation. However no studies have explicitly investigated the time when single decisions are taken based on such an accumulation process. NEW METHOD: Here, we outline a novel electroencephalography (EEG) decoding technique which is based on accumulating the probability of appearance of prototypical voltage topographies and can be used for predicting subjects' decisions. We use this approach for studying the time-course of single decisions, during a task where subjects were asked to compare reward vs. loss points for accepting or rejecting offers. RESULTS: We show that based on this new method, we can accurately decode decisions for the majority of the subjects. The typical time-period for accurate decoding was modulated by task difficulty on a trial-by-trial basis. Typical latencies of when decisions are made were detected at ∼500ms for 'easy' vs. ∼700ms for 'hard' decisions, well before subjects' response (∼340ms). Importantly, this decision time correlated with the drift rates of a diffusion model, evaluated independently at the behavioral level. COMPARISON WITH EXISTING METHOD(S): We compare the performance of our algorithm with logistic regression and support vector machine and show that we obtain significant results for a higher number of subjects than with these two approaches. We also carry out analyses at the average event-related potential level, for comparison with previous studies on decision-making. CONCLUSIONS: We present a novel approach for studying the timing of value-based decision-making, by accumulating patterns of topographic EEG activity at single-trial level.

Effects of unit - based pricing on the waste collection demand : a meta - regression analysis

We perform a meta - analysis of 21 studies that estimate the elasticity of the price of waste collection demand upon waste quantities, a prior literature review having revealed that the price elasticity differs markedly. Based on a meta - regression with a total of 65 observations, we find no indication that municipal data give higher estimates for price elasticities than those associated with household data. Furthermore, there is no evidence that treating prices as exogenous underestimates the price elasticity. We find that much of the variation can be explained by sample size, the use of a weight - based as opposed to a volume - based pricing system, and the pricing of compostable waste. We also show that price elasticities determined in the USA and point estimations of elasticities are more elastic, but these effects are not robust to the changing of model specifications. Finally, our tests show that there is no evidence of publication bias while there is some evidence of the existence of genuine empirical effect.

Managing the Pricing of Integrated Solutions in Export Partnerships

Little research has been conducted to guide the management of marketing variables, such as pricing, in systems business context. Furthermore, given that international partnering has become a popular mode of operation for SMEs, the objective of the current thesis was to explore the scantly researched topic of managing the pricing of integrated solutions in an export partnership. Specifically, the thesis synthesizes literature findings from the three areas of export pricing, systems business, and export partnerships. The empirical section of the study consists of a qualitative single-case study of a Finnish systems integrator that has recently launched its export operations. Primary data was collected by conducting four interviews of the case company’s managers and by organizing one group interview session. The study findings indicate that a systems integrator’s pricing strategy in an export partnership can be very multidimensional and dependant on international pricing environment and partner characteristics, that an export partnership appears to have unique implications on a systems integrator’s pricing process, and that customer value –based pricing strategies might be particularly suited to pricing integrated solutions.

Actively crafting customer value or merely representing a solution? Linking value-based selling to salesperson performance

Value-based selling is a salesperson behavioral mode which concentrates on generating superior customer value. Although service dominant logic emphasizes customer value as a central tenet for achieving strategic objectives, sales management literature has predominantly circumvented the subject matter of customer value. The purpose of this thesis is to demonstrate the distinctiveness and positive sales performance outcomes of value-based selling. Additionally, performance outcomes of value-based selling are contrasted with other key sales behaviors, selling skills and motivational orientations. As a part of this thesis, large-scale survey of 730 respondents was collected. The survey was tailored for the needs of a value-based selling research group led by Ph.D. Harri Terho. The research group used convenience sampling to select the salespeople of 25 medium- and large-scale companies in Finland which currently either practice value-based selling or consider developing these activities. This thesis contains three key findings: value-based selling is established as a distinct sales behavior, it relates directly and positively to salesperson performance and it explains the link between customer-oriented selling and salesperson performance. Value-based selling relates to salesperson performance especially in the following GICS-sectors: energy, industrials and materials. However, relationship selling relates to performance strongest in the energy sector and adaptive selling in industrials sector. In sum, it is evident that actively crafting customer value is a successful sales behavior in many business-to-business marketing environments while other sales behaviors, excluding customer-oriented selling, still uphold their significance.

A simulation model of the optimal maintenance strategy: conceptual agent-based approach

In this Master’s thesis agent-based modeling has been used to analyze maintenance strategy related phenomena. The main research question that has been answered was: what does the agent-based model made for this study tell us about how different maintenance strategy decisions affect profitability of equipment owners and maintenance service providers? Thus, the main outcome of this study is an analysis of how profitability can be increased in industrial maintenance context. To answer that question, first, a literature review of maintenance strategy, agent-based modeling and maintenance modeling and optimization was conducted. This review provided the basis for making the agent-based model. Making the model followed a standard simulation modeling procedure. With the simulation results from the agent-based model the research question was answered. Specifically, the results of the modeling and this study are: (1) optimizing the point in which a machine is maintained increases profitability for the owner of the machine and also the maintainer with certain conditions; (2) time-based pricing of maintenance services leads to a zero-sum game between the parties; (3) value-based pricing of maintenance services leads to a win-win game between the parties, if the owners of the machines share a substantial amount of their value to the maintainers; and (4) error in machine condition measurement is a critical parameter to optimizing maintenance strategy, and there is real systemic value in having more accurate machine condition measurement systems.

Creating an open-books implementation framework for a maintenance-related value-based life-cycle model

This study is a qualitative action research by its nature with elements of personal design in the form of a tangible model implementation framework construction. Utilized empirical data has been gathered via two questionnaires in relation to the arranged four workshop events with twelve individual participants. Five of them represented maintenance customers, three maintenance service providers and four equipment providers respectively. Further, there are two main research objectives in proportion to the two complementary focusing areas of this thesis. Firstly, the value-based life-cycle model, which first version has already been developed prior to this thesis, requires updating in order to increase its real-life applicability as an inter-firm decision-making tool in industrial maintenance. This first research objective is fulfilled by improving appearance, intelligibility and usability of the above-mentioned model. In addition, certain new features are also added. The workshop participants from the collaborating companies were reasonably pleased with made changes, although further attention will be required in future on the model’s intelligibility in particular as main results, charts and values were all reckoned as slightly hard to understand. Moreover, upgraded model’s appearance and added new features satisfied them the most. Secondly and more importantly, the premises of the model’s possible inter-firm implementation process need to be considered. This second research objective is delivered in two consecutive steps. At first, a bipartite open-books supported implementation framework is created and its different characteristics discussed in theory. Afterwards, the prerequisites and the pitfalls of increasing inter-organizational information transparency are studied in empirical context. One of the main findings was that the organizations are not yet prepared for network-wide information disclosure as dyadic collaboration was favored instead. However, they would be willing to share information bilaterally at least. Another major result was that the present state of companies’ cost accounting systems will definitely need implementation-wise enhancing in future since accurate and sufficiently detailed maintenance data is not available. Further, it will also be crucial to create supporting and mutually agreed network infrastructure. There are hardly any collaborative models, methods or tools currently in usage. Lastly, the essential questions about mutual trust and predominant purchasing strategies are cooperation-wise important. If inter-organizational activities are expanded, a more relational approach should be favored in this regard. Mutual trust was also recognized as a significant cooperation factor, but it is hard to measure in reality.

Value-based Reference Marketing in a Small Process Industry Software and Service Company

This master’s thesis was done for a small company, Vipetec Oy, which offers specialized technological services for companies mainly in forest industry. The study was initiated partly because the company wants to expand its customer base to a new industry. There were two goals connected to each other. First was to find out how much and what kind of value current customers have realized from ATA Process Event Library, one of the products that the company offers. Second was to determine the best way to present this value and its implications for future value potential to both current and potential customers. ATA helps to make grade and product changes, starting after machine downtime, and recovery from production break faster for customers. All three events sometimes occur in production line. The faster operation results to savings in time and material. In addition to ATA Vipetec also offers other services related to development of automation and optimization of controls. Theoretical part concentrates on the concept of value, how it can be delivered to customers, and what kind of risk customer faces in industrial purchasing. Also the function of reference marketing towards customers is discussed. In the empirical part the realized value for existing customers is evaluated based on both numerical data and interviews. There’s also a brief case study about one customer. After that the value-based reference marketing for a target industry is examined through interviews of these potential customers. Finally answers to the research questions are stated and compared also to the theoretical knowledge about the subject. Results show that those customers’ machines which use the full service concept of ATA usually are able to save more time and material than the machines which use only some features of the product. Interviews indicated that sales arguments which focus on improved competitive status are not as effective as current arguments which focus on numerical improvements. In the case of potential customers in the new industry, current sales arguments likely work best for those whose irregular production situations are caused mainly by fault situations. When the actions of Vipetec were compared to ten key elements of creating customer references, it was seen that many of them the company has either already included in its strategy or has good chances to include them with the help of the results of this study.

A Phase Model for Building a Customer Value Based Sales Tool – Case Mining and Metals Industry

The objective of this research is to observe the state of customer value management in Outotec Oyj, determine the key development areas and develop a phase model with which to guide the development of a customer value based sales tool. The study was conducted with a constructive research approach with the focus of identifying a problem and developing a solution for the problem. As a basis for the study, the current literature involving customer value assessment and solution and customer value selling was studied. The data was collected by conducting 16 interviews in two rounds within the company and it was analyzed by coding openly. First, seven important development areas were identified, out of which the most critical were “Customer value mindset inside the company” and “Coordination of customer value management activities”. Utilizing these seven areas three functionality requirements, “Preparation”, “Outotec’s value creation and communication” and “Documentation” and three development requirements for a customer value sales tool were identified. The study concluded with the formulation of a phase model for building a customer value based sales tool. The model included five steps that were defined as 1) Enable customer value utilization, 2) Connect with the customer, 3) Create customer value, 4) Define tool to facilitate value selling and 5) Develop sales tool. Further practical activities were also recommended as a guide for executing the phase model.

Value-based selling of the column connection solution as part of project sales

The objective of this study was to find out how third party influencers can facilitate value-based selling in a network and how suppliers should aim to impact on these third party influencers to facilitate value-based selling. The study considers construction industry, selling the column connection solution and third party influencers. Third party influencers examined in this study were structural designers. The study also aims to find out structural designers’ value drivers and the differences between the market areas that this study related to. The theoretical part of the study focuses on two separate areas. The first part of the theory focuses on a value-based selling concept: what it is, what it requires and what are the main barriers for value-based selling. The second part of the theory examines value creation in networks. The present knowledge over value creation in networks and different network actors are presented. Project marketing is also discussed briefly because this study’s topic, which is highly related to project business. The results reveal structural designers’ value drivers considering the usage of the column connection solution and present ways how suppliers should aim to impact structural designers to facilitate value-based selling. The main result of the study indicates that third party influencers can have a positive impact on facilitating value-based selling. Structural designers are communicating more or less with all the salient actors in different project phases and they can act as sponsors to support the sales of Peikko’s column connection solution and promote solution to other actors involved to the project. This requires that structural designers can understand the actual benefits of how the solution can improve their and their customers’ business.

The roles and tasks of salespeople in Software-as-a-Service company's value-based sales process

Recent research in relationships marketing and sales and sales management emphasizes companies’ ability to create customer value as a core of all business-to-business relationships. The role of individual salespeople in business relation-ships is commonly acknowledged, but has been largely neglected in extant literature. This study offers especially more detailed perspective on salespeople’s roles and tasks in business-to-business value-based sales process. It focuses especially on Software-as-a-Service business environment. The objective of the study is to find out how salespeople can create value in Software-as-a-Service value-based sales process. It determines value-based sales process, salespeople’s roles and tasks in it, and combines value assessment in to process. The results indicate that salespeople have to adapt different selling roles and tasks in Software-as-a-Service value-based sales process to be able to support the customer’s value-in-use experience. The process itself is highly complex, consisting of multiple facets and selling behaviors, and involves relevant actors from both parties of relationship. The study concludes with a discussion of possibilities that provide interesting aspects for future research.

The Pricing of Customized Industrial Products

The main objective of this study was to examine the pricing of customized industrial products in international markets, and to understand what pricing decision making consists of. Another purpose of the study was to identify the main factors that affect the pricing decisions of industrial companies, as well as the different pricing strategies industrial companies may choose when pricing customized products. The research was conducted as a qualitative single case study, and a Finnish industrial company specializing in indoor environment solutions, Halton Marine Oy, was used as the case company in the study. The primary data was collected through semi-structured theme interviews with the key management personnel of the company, and the results were discussed and analyzed in the light of the existing literature. The results of this study indicate that the pricing of customized industrial products consists of several dimensions, and is influenced by a large variety of factors that are both internal and external to the firm. In addition, it was found that the choice of a pricing strategy is largely dependent on the chosen segment, the product category, and the stage in the product life cycle. The results also suggest that customizing companies should consider using the value-based pricing orientation, since customization is closely linked to customer value.