Customer asset management in action: using customers portfolio for allocating resources across business-to-business relationships for improved shareholder value

Suvi Nenonen Customer asset management in action: using customer portfolios for allocating resources across business-to-business relationships for improved shareholder value Customers are crucial assets to all firms as customers are the ultimate source of all cash flows. Regardless this financial importance of customer relationships, for decades there has been a lack of suitable frameworks explaining how customer relationships contribute to the firm financial performance and how this contribution can be actively managed. In order to facilitate a better understanding of the customer asset, contemporary marketing has investigated the use of financial theories and asset management practices in the customer relationship context. Building on this, marketing academics have promoted the customer lifetime value concept as a solution for valuating and managing customer relationships for optimal financial outcomes. However, the empirical investigation of customer asset management lags behind the conceptual development steps taken. Additionally, the practitioners have not embraced the use of customer lifetime value in guiding managerial decisions - especially in the business-to-business context. The thesis points out that there are fundamental differences between customer relationships and investment instruments as investment targets, effectively eliminating the possibility to use financial theories in a customer relationships context or to optimize the customer base as a single investment portfolio. As an alternative, the thesis proposes the use of customer portfolio approach for allocating resources across the customer base for improved shareholder value. In the customer portfolio approach, the customer base of a firm is divided into multiple portfolios based on customer relationships’ potential to contribute to the shareholder value creation. After this, customer management concepts are tailored to each customer portfolio, designed to improve the shareholder value in their own respect. Therefore, effective customer asset management with the customer portfolio approach necessitates that firms are able to manage multiple parallel customer management concepts, or business models, simultaneously. The thesis is one of the first empirical studies on customer asset management, bringing empirical evidence from multiple business-to-business case studies on how customer portfolio models can be formed, how customer portfolios can be managed, and how customer asset management has contributed to the firm financial performance.

The Nature and Change of Bonds in Industrial Business Relationships

A focus on cooperative industrial business relationships has become increasingly important in studies of industrial relationships. If the relationships between companies are strong it is usually a sign that companies will cooperate for a longer time and that may affect companies’ competitive and financial strength positively. As a result the bonds between companies become more important. This is due to the fact that bonds are building blocks of relationships and thus affect the stability in the cooperation between companies. Bond strength affect relationship strength. A framework regarding how bonds develop and change in an industrial business relationship has been developed in the study. Episodes affect the bonds in the relationship strengthening or weakening the bonds in the relationship or preserving status quo. Routine or critical episodes may lead to the strengthening or weakening of bonds as well as the preservation of status quo. The method used for analyzing bond strength trying to grasp the nature and change of bonds was invented by systematically following the elements of the definitions of bonds. A system with tables was drawn up in order to find out if the bond was weak, of medium strength or strong. Bonds are important regulators of industrial business relationships. By influencing the bonds one may have possibilities to strengthen or weaken the business relationship. Strengthen the business relationship in order to increase business and revenue and weaken the relationship in order to terminate business where the revenue is low or where there may be other problems in the relationship. By measuring the strength of different bonds it can be possible to strengthen weak bonds in order to strengthen the relationship. By using bond management it is possible to strategically strengthen or weaken the bonds between the cooperating companies in order to strengthen the cooperation and tie the customer or supplier to the company or weaken the cooperation in order to terminate the relationship. The instrument for the management of bonds is to use the created bond audit in order to know which bonds resources should be focused on in order to increase or decrease their strength.

Customer Energy in Relationships

All companies have a portfolio of customer relationships. From a managerial standpoint the value of these customer relationships is a key issue. The aim of the paper is to introduce a conceptual framework for customers’ energy towards a service provider. Customer energy is defined as the cognitive, affective and behavioural effort a customer puts into the purchase of an offering. It is based on two dimensions: life theme involvement and relationship commitment. Data from a survey study of 425 customers of an online gambling site was combined with data about their individual purchases and activity. Analysis showed that involvement and commitment influence both customer behaviour and attitudes. Customer involvement was found to be strongly related to overall spending within a consumption area, whereas relationship commitment is a better predictor of the amount of money spent at a particular company. Dividing the customers into four different involvement / commitment segments revealed differences in churn rates, word-of-mouth, brand attitude, switching propensity and the use of the service for socializing. The framework provides a tool for customer management by revealing differences in fundamental drivers of customer behaviour resulting in completely new customer portfolios. Knowledge of customer energy allows companies to manage their communication and offering development better and provides insight into the risk of losing a customer.

Key Account Management and Quality in Business-to-Business Relationships

What are the main elements of successful Key Account Management (KAM)? What is the nature of quality for the company and for the individual in business-to-business relationships? What kind of managerial practices are required at the company and individual level in Key Account Management? This paper focuses on these central aspects of KAM. It describes the main elements of KAM, which is a systematic marketing management approach in the business-to-business context with the objective to build profitable and long-lasting relationships with major accounts. Although paying customers in the business-to-business market are organizations, they are always represented by individuals. Thus, successful KAM requires appropriate handling of both the organizational and the individual levels. This paper describes the nature of quality for the company and for the individual in business-to-business relationships. As a synthesis, this paper suggests a framework for KAM practices deploying the main elements of KAM and the company and individual levels of business-to-business relationships. The weakness of the traditional quality management approach is that it pays little, if any, attention to customer importance. By providing similar quality to each customer, more important customers are penalized and less important customers are rewarded. This paper broadens the traditional quality management approach by introducing the concept of targeted quality based on customer importance.

Critical Incidents in Internal Relationships

Critical incidents have had an important role in service quality and service management research. The focus of critical-incident studies has gradually shifted from separate acts and episodes towards relationships, and even switching from one relationship to another. The Critical Incident Technique has mainly been used when studying the service sector, concentrating on the customer's perception of critical incidents. Although some studies have considered the perceptions of employees important, critical incidents have not been considered a tool for studying internal relationships to any larger extent. This paper takes a process approach and shifts the focus from an external to an internal setting. It puts forward a new technique for analysing internal relationships from a critical-incident perspective. The technique captures the dynamism in relationships through considering internal critical incidents as micro-processes affecting not only internal but also external relationships.

Opportunity Exploration and Exploitation in International New Ventures: A Study of Relationships’ Involvement in Early Entrepreneurial and Internationalisation Events

International new ventures (INVs) are firms that engage very early after their foundation, if not immediately, in inter-national activities. INVs are a relatively recent phenomenon that deviates from earlier theories on international business. In order to develop our understanding of the emergence and early internationalisation of INVs three different research areas are built upon in the dissertation: International Entrepreneurship, Entrepreneurship and Networks. Net-works have been identified as important for INVs. However, there is a lack of more profound studies regarding the way different types of relationships influence INVs. Few studies are concerned with exploration and exploitation of opportunities and research on the benefits and drawbacks of entrepreneurs’ relationships for the international opportunity recognition process has been called for. By taking a network approach to opportunity exploration and exploitation, the dissertation develops our under-standing of how entrepreneurs’ relationships are involved in exploring and exploiting opportunities during an INV’s early and critical entrepreneurial and internationalisation events. The critical events are studied during three phases: pre-founding, start-up and early internationalisation. Since internationalisation is present from the very beginning, the early internationalisation phase may be parallel to both the pre-founding and the start-up phase. The dissertation contributes to international entrepreneur-ship research in mainly two ways. First, by offering a deep insight into which opportunity exploration and exploitation activities entrepreneurs’ relationships are involved. Second, by adding to our understanding of what the relationships contribute to these activities, mainly in the sense of benefits gained through the relationships. Studying micro firms in real time in their early development towards INVs is considered a unique contribution of the study as it offers valuable insights into pre-founding, start-up, pre-internationalisation as well as early internationalisation. The study shows that in order to understand the development of INVs, it is beneficial to go back to times when there was no thought of starting the INV. By focusing on the entrepreneurs’ background and relationships a more complete picture of the INV is gained. Relationships created at former workplaces or during school time might be the ones that develop business opportunities and set off internationalisation. By focusing on the pre-founding phase, the study also contributes to entrepreneurship literature as this stage has often been neglected or assumed obvious in earlier research. This dissertation shows that an important and mostly lengthy pre-founding phase precedes the decision to start a f rm. In addition, the integration of entrepreneurs’ real experiences with existing theory to develop a continuum for the strength of relationships allows for contributions to network theory.

Structure and thermal stability relationships in ring-substituted arylammonium nitrates

The thermal stability of ring-substituted arylammonium nitrates has been investigated using thermal methods of analysis. The decomposition temperature of meta- and para-substituted derivatives is found to be linearly related to the Hammett substituent constant σ. The activation energy for decomposition determined by isothermal gravimetry increases with the increasing basicity of the corresponding amine. The results suggest that the primary step in the decomposition process of these salts is proton abstraction by the anion from the arylammonium ion.

Nucleotide sequence of the 3terminal region of belladonna mottle virus (renamed Physalis mottle virus) RNA and analysis of the evolutionary relationships among tymoviral coat proteins

The 3' terminal 1255 nt sequence of Physalis mottle virus (PhMV) genomic RNA has been determined from a set of overlapping cDNA clones. The open reading frame (ORF) at the 3' terminus corresponds to the amino acid sequence of the coat protein (CP) determined earlier except for the absence of the dipeptide, Lys-Leu, at position 110-111. In addiition, the sequence upstream of the CP gene contains the message coding for 178 amino acid residues of the C-terminus of the putative replicase protein (RP). The sequence downstream of the CP gene contains an untranslated region whose terminal 80 nucleotides can be folded into a characteristic tRNA-like structure. A phylogenetic tree constructed after aligning separately the sequence of the CP, the replicase protein (RP) and the tRNA-like structure determined in this study with the corresponding sequences of other tymoviruses shows that PhMV wrongly named belladonna mottle virus [BDMV(I)] is a separate tymovirus and not another strain of BDMV(E) as originally envisaged. The phylogenetic tree in all the three cases is identical showing that any subset of genomic sequence of sufficient length can be used for establishing evolutionary relationships among tymoviruses.

Structure-function relationships of icosahedral plant viruses

X-ray diffraction studies on single crystals of a few viruses have led to the elucidation of their three dimensional structure at near atomic resolution. Both the tertiary structure of the coat protein subunit and the quaternary morganization of the icosahedral capsid in these viruses are remarkably similar. These studies have led to a critical re-examination of the structural principles in the architecture of isometric viruses and suggestions of alternative mechanisms of assembly. Apart from their role in the assembly of the virus particle, the coat proteins of certian viruses have been shown to inhibit the replication of the cognate RNA leading to cross-protection. The coat protein amino acid sequence and the genomic sequence of several spherical plant RNA viruses have been determined in the last decade. Experimental data on the mechanisms of uncoating, gene expression and replication of several classes of viruses have also become available. The function of the non-structural proteins of some viruses have been determined. This rapid progress has provided a wealth of information on several key steps in the life cycle of RNA viruses. The function of the viral coat protein, capsid architecture, assembly and disassembly and replication of isometric RNA plant viruses are discussed in the light of this accumulated knowledge.

Chinese immigrants to Finland: A qualitative study of housing, employment, access to health care and child care as sociological dimensions in their settlement process

The Master’s thesis is qualitative research based on interviews of 15 Chinese immigrants to Finland in order to provide a sociological perspective of the migration experience through the eyes of Chinese immigrants in the Finnish social welfare context. This research is mainly focused upon four crucial aspects of life in the settlement process: housing, employment, access to health care and child care. Inspired by Allardt’s theoretical framework ‘Having, Loving and Being’, social relationships and individual satisfaction are examined in the case of Chinese interviewees dealing with the four life aspects. Finland was not perceived as an attractive migration destination for most Chinese interviewees in the beginning. However, with longer residence in Finland, the Finnish social welfare system gradually became a crucial appealing factor in their permanent settlement in Finland. And meanwhile, social responsibility of attending their old parents in China, strong feelings of being isolated in Finland, and insufficient integration into the Finnish society were influential factors for their decision of returning to China. Social relationships with personal friends, migration brokers, schools, employers and family relatives had great influences in the four life aspects of Chinese immigrants in Finland. The social relationship with the Finnish social welfare sector is supportive to Chinese immigrants, but Chinese immigrants do not heavily rely on Finnish social protection. The housing conditions were greatly improved over time while the upward mobility in the Finnish labour market was not significant among Chinese immigrants. All Chinese immigrants were satisfied with their current housing by the time I interviewed them while most of them had subjective feelings of being alienated in the Finnish labour market, which seriously prevented them from integrating into the Finnish society. In general, Chinese immigrants were satisfied with the low cost of accessing the Finnish public health care services and affordable Finnish child day care services and financial subsidies for children from the Finnish social welfare sector. This research also suggests that employment is the central basis in well-being. Support from the Finnish social welfare sector can improve the satisfaction levels among immigrants, especially when it mitigates the effects of low-paid employment. As well, my empirical study of Chinese immigrants in Finland shows that Having (needs for materials), Loving (needs for social relations) and Being (needs for social integration) are all involved in the four concrete aspects (housing, employment, access to health care and child care).

Phase relationships in the system Ni-W-O and thermodynamic properties of NiWO,

The phase diagram of the Ni-W-O system at 1200 K was established by metallographic and X-ray identification of the phases present after equilibration at controlled oxygen potentials. The oxygen partial pressures over the samples were fixed by metered streams of CO+CO2 gas mixtures. There was only one ternary oxide, nickel tungstate (NiWO4), in the Ni-W-O system at a total pressure of 1 atm, and this compound decomposed to a mixture of Ni+WO2.72 on lowering the oxygen potential. The Gibbs' free energy of formation of NiWO4 was determined from the measurement of the e.m.f. of the solid oxide galvanic cell, Pt, Ni+NiWO4+WO2.72/CaO-ZrO2/Ni+NiO, Pt and thermodynamic properties of tungsten and nickel oxides available in the literature. For the reaction, NiO(s)+WO3(s)rarrNiWO4(s) DeltaG°=–10500–0.708 T (±250) cal mol–1.

Structural Relationships in 2,3-Bis-n-decyloxyanthracene and 12-Hydroxystearic Acid Molecular Gels and Aerogels Processed in Supercritical CO2

Supercritical carbon dioxide is used to prepare aerogels of two reference molecular organogelators, 2,3-bis-n-decyloxyanthracene (DDOA) (luminescent molecule) and 12-hydroxystearic acid (HSA). Electron microscopy reveals the fibrillar morphology of the aggregates generated by the protocol. SAXS and SANS measurements show that DDOA aerogels are crystalline materials exhibiting three morphs: (1) arrangements of the crystalline solid (2D p6m), (2) a second hexagonal morph slightly more compact, and (3) a packing specific of the fibers in the gel. Aggregates specific of the aerogel (volume fraction being typically phi approximate to 0.60) are developed over larger distances (similar to 1000 angstrom) and bear fewer defaults and residual strains than aggregates in the crystalline and gel phases. Porod, Scherrer and Debye-Bueche analyses of the scattering data have been performed. The first five diffraction peaks show small variations in position and intensity assigned to the variation of the number of fibers and their degree of vicinity within hexagonal bundles of the related SAFIN according to the Oster model. Conclusions are supported by the guidelines offered by the analysis of the situation in HSA aerogels for which the diffraction pattern can be described by two coexisting lamellar-like arrangements. The porosity of the aerogel, as measured by its specific surface extracted from the scattering invariant analysis, is only 1.8 times less than that of the swollen gel and is characteristic of a very porous material.

Mechanism-based inhibition of CYP2C8 by gemfibrozil in humans : characterisation of time and dose relationships

Drug-drug interactions may cause serious, even fatal clinical consequences. Therefore, it is important to examine the interaction potential of new chemical entities early in drug development. Mechanism-based inhibition is a pharmacokinetic interaction type, which causes irreversible loss of enzyme activity and can therefore lead to unusually profound and long-lasting consequences. The in vitro in vivo extrapolation (IVIVE) of drug-drug interactions caused by mechanism-based inhibition is challenging. Consequently, many of these interactions have remained unrecognised for many years. The concomitant use of the fibrate-class lipid-lowering agent gemfibrozil increases the concentrations of some drugs and their effects markedly. Even fatal cases of rhabdomyolysis occurred in patients administering gemfibrozil and cerivastatin concomitantly. One of the main mechanisms behind this effect is the mechanism-based inhibition of the cytochrome P450 (CYP) 2C8 enzyme by a glucuronide metabolite of gemfibrozil leading to increased cerivastatin concentrations. Although the clinical use of gemfibrozil has clearly decreased during recent years, gemfibrozil is still needed in some special cases. To enable safe use of gemfibrozil concomitantly with other drugs, information concerning the time and dose relationships of CYP2C8 inhibition by gemfibrozil should be known. This work was carried out as four in vivo clinical drug-drug interaction studies to examine the time and dose relationships of the mechanism-based inhibitory effect of gemfibrozil on CYP2C8. The oral antidiabetic drug repaglinide was used as a probe drug for measuring CYP2C8 activity in healthy volunteers. In this work, mechanism-based inhibition of the CYP2C8 enzyme by gemfibrozil was found to occur rapidly in humans. The inhibitory effect developed to its maximum already when repaglinide was given 1-3 h after gemfibrozil intake. In addition, the inhibition was shown to abate slowly. A full recovery of CYP2C8 activity, as measured by repaglinide metabolism, was achieved 96 h after cessation of gemfibrozil treatment. The dose-dependency of the mechanism-based inhibition of CYP2C8 by gemfibrozil was shown for the first time in this work. CYP2C8 activity was halved by a single 30 mg dose of gemfibrozil or by twice daily administration of less than 30 mg of gemfibrozil. Furthermore, CYP2C8 activity was decreased over 90% by a single dose of 900 mg gemfibrozil or twice daily dosing of approximately 100 mg gemfibrozil. In addition, with the application of physiological models to the data obtained in the dose-dependency studies, the major role of mechanism-based inhibition of CYP2C8 in the interaction between gemfibrozil and repaglinide was confirmed. The results of this work enhance the proper use of gemfibrozil and the safety of patients. The information related to time-dependency of CYP2C8 inhibition by gemfibrozil may also give new insights in order to improve the IVIVE of the drug-drug interactions of new chemical entities. The information obtained by this work may be utilised also in the design of clinical drug-drug interaction studies in the future.