Marketing strategy for a GSM phone service. Target market, St. Petersburg Russia. Case MegaFon

Tämä pro gradu tutkielma esittää markkinointistrategian digitaaliselle matkapuhelinpalvelulle penetroiduttaessa uusille markkinoille. MegaFon on uuden sukupolven mobiilioperaattori, jolla on lukuisia teknlogiaan perustuvia etuisuuksia puolellaan. Markkinointistrategian perusteena asiakkaat on määritelty, paikallistettu ja analysoitu. Tämän lisäksi, palvelun positiointi, hinnoittelu- ja jakelukanavavaihtoehdot on myöskin analysoitu ja määritelty. Menestystekijöihin liittyvät kysymykset, myynnin jälkeiseen toimintaan liittyvät asiat on myös tutkittu. Teoreettiset aspektit liittyvät pääsääntöisesti uuden palvelun ja palveluiden lanseeramiseen (palvelu, palvelun elinkaariajattelu), niiden markkinointistrategioihin lanseerausvaiheessa ja markkinointikanavien päättämiseen. Tutkimuksessa on selitetty MegaFonin ennustamis- ja lähestymistavat, joilla on valotettu todellista markkinatilannetta. Tämän tutkielman informaatio on kerätty useista lähteistä, kuten: yleistä aiheeseen liittyvää kirjallisuutta, sisäisiä raportteja ja Megafonin materiaalia, yhteistyökumppaneiden aineistoa, Internettia ja muuta saatavilla olevaa materiaalia. Tuloksena on määritelty päätöksenteon avainkohdat ja osaltaan perinteiset lähestymistavat on kyseenalaistettu.

Competitive policy and pricing in business-to-business relationships within the EC market.

Tutkielman tarkoituksena oli tarkastella hinnoittelun ja hinnanalennusten merkitystä toimittaja-asiakassuhteissa yritysmarkkinoilla, sekä sitä kuinka kilpailuoikeus säätelee hinnoittelua. Tutkielman ensisijaisena tavoitteena oli selvittää kuinka alennuspolitiikka tulisi laatia jotta se olisi EY:n kilpailuoikeuden mukaan sallittu. Aluksi hinnoittelupolitiikkaan ja strategiaan vaikuttavia seikkoja tarkasteltiin teoreettisesti ja tämän pohjalta laadittua viitekehystä sovellettiin empiiristä tutkimusta suoritettaessa. Empiirinen tutkimus oli normatiivinen case-tutkimus, jossa tarkasteltiin kahdessa toimittaja-asiakassuhteessa noudatettuja hinnoittelu- ja alennuskäytäntöjä. Aineisto kerättiin haastattelemalla toimittajan myyntihenkilöitä, ja lisänä käytettiin yrityksen sisäistä materiaalia. Analyysin tulokset osoittivat nykyisissä käytännöissä joitakin kilpailuoikeudellisia ristiriitaisuuksia, ja näihin annettiin parannusehdotuksia.

Price rivalry in airline markets: A study of a successful strategy of a network carrier against a low-cost carrier

Competition in airline markets may be tough. In this context, network carriers have two alternative strategies to compete with low-cost carriers. First, they may establish a low-cost subsidiary. Second, they may try to reduce costs using the main brand. This paper examines a successful strategy of the first type implemented by Iberia in the Spanish domestic market. Our analysis of data and the estimation of a pricing equation show that Iberia has been able to charge lower prices than rivals with its low-cost subsidiary. The pricing policy of the Spanish network carrier has been particularly aggressive in less dense routes and shorter routes.

Pricing anomalies in the Finnish stock market

The aim of this thesis is to examine whether the pricing anomalies exists in the Finnish stock markets by comparing the performance of quantile portfolios that are formed on the basis of either individual valuation ratios, composite value measures or combined value and momentum indicators. All the research papers included in the thesis show evidence of value anomalies in the Finnish stock markets. In the first paper, the sample of stocks over the 1991-2006 period is divided into quintile portfolios based on four individual valuation ratios (i.e., E/P, EBITDA/EV, B/P, and S/P) and three hybrids of them (i.e. composite value measures). The results show the superiority of composite value measures as selection criterion for value stocks, particularly when EBITDA/EV is employed as earnings multiple. The main focus of the second paper is on the impact of the holding period length on performance of value strategies. As an extension to the first paper, two more individual ratios (i.e. CF/P and D/P) are included in the comparative analysis. The sample of stocks over 1993- 2008 period is divided into tercile portfolios based on six individual valuation ratios and three hybrids of them. The use of either dividend yield criterion or one of three composite value measures being examined results in best value portfolio performance according to all performance metrics used. Parallel to the findings of many international studies, our results from performance comparisons indicate that for the sample data employed, the yearly reformation of portfolios is not necessarily optimal in order to maximally gain from the value premium. Instead, the value investor may extend his holding period up to 5 years without any decrease in long-term portfolio performance. The same holds also for the results of the third paper that examines the applicability of data envelopment analysis (DEA) method in discriminating the undervalued stocks from overvalued ones. The fourth paper examines the added value of combining price momentum with various value strategies. Taking account of the price momentum improves the performance of value portfolios in most cases. The performance improvement is greatest for value portfolios that are formed on the basis of the 3-composite value measure which consists of D/P, B/P and EBITDA/EV ratios. The risk-adjusted performance can be enhanced further by following 130/30 long-short strategy in which the long position of value winner stocks is leveraged by 30 percentages while simultaneously selling short glamour loser stocks by the same amount. Average return of the long-short position proved to be more than double stock market average coupled with the volatility decrease. The fifth paper offers a new approach to combine value and momentum indicators into a single portfolio-formation criterion using different variants of DEA models. The results throughout the 1994-2010 sample period shows that the top-tercile portfolios outperform both the market portfolio and the corresponding bottom-tercile portfolios. In addition, the middle-tercile portfolios also outperform the comparable bottom-tercile portfolios when DEA models are used as a basis for stock classification criteria. To my knowledge, such strong performance differences have not been reported in earlier peer-reviewed studies that have employed the comparable quantile approach of dividing stocks into portfolios. Consistently with the previous literature, the division of the full sample period into bullish and bearish periods reveals that the top-quantile DEA portfolios lose far less of their value during the bearish conditions than do the corresponding bottom portfolios. The sixth paper extends the sample period employed in the fourth paper by one year (i.e. 1993- 2009) covering also the first years of the recent financial crisis. It contributes to the fourth paper by examining the impact of the stock market conditions on the main results. Consistently with the fifth paper, value portfolios lose much less of their value during bearish conditions than do stocks on average. The inclusion of a momentum criterion somewhat adds value to an investor during bullish conditions, but this added value turns to negative during bearish conditions. During bear market periods some of the value loser portfolios perform even better than their value winner counterparts. Furthermore, the results show that the recent financial crisis has reduced the added value of using combinations of momentum and value indicators as portfolio formation criteria. However, since the stock markets have historically been bullish more often than bearish, the combination of the value and momentum criteria has paid off to the investor despite the fact that its added value during bearish periods is negative, on an average.

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.

A stochastic dynamic programming approach for pricing options on stock-index futures

The aim of this thesis is to price options on equity index futures with an application to standard options on S&P 500 futures traded on the Chicago Mercantile Exchange. Our methodology is based on stochastic dynamic programming, which can accommodate European as well as American options. The model accommodates dividends from the underlying asset. It also captures the optimal exercise strategy and the fair value of the option. This approach is an alternative to available numerical pricing methods such as binomial trees, finite differences, and ad-hoc numerical approximation techniques. Our numerical and empirical investigations demonstrate convergence, robustness, and efficiency. We use this methodology to value exchange-listed options. The European option premiums thus obtained are compared to Black's closed-form formula. They are accurate to four digits. The American option premiums also have a similar level of accuracy compared to premiums obtained using finite differences and binomial trees with a large number of time steps. The proposed model accounts for deterministic, seasonally varying dividend yield. In pricing futures options, we discover that what matters is the sum of the dividend yields over the life of the futures contract and not their distribution.

Pricing and hedging of oil futures : a unifying approach

We develop and empirically test a continuous time equilibrium model for the pricing of oil futures. The model provides a link between no-arbitrage models and expectation oriented models. It highlights the role of inventories for the identification of different pricing regimes. In an empirical study the hedging performance of our model is compared with five other one- and two-factor pricing models. The hedging problem considered is related to Metallgesellschaft´s strategy to hedge long-term forward commitments with short-term futures. The results show that the downside risk distribution of our inventory based model stochastically dominates those of the other models.

Impact of the Level of Disclosure of Financial Information on the Pricing of Shares in the Context of Adverse Selection: an experimental research

Managers know more about the performance of the organization than investors, which makes the disclosure of information a possible strategy for competitive differentiation, minimizing adverse selection. This paper's main goal is to analyze whether or not an entity's level of diclosure may affect the risk perception of individuals and the process of evaluating their shares. The survey was carried out in an experimental study with 456 subjects. In a stock market simulation, we investigated the pricing of the stocks of two companies with different levels of information disclosure at four separate stages. The results showed that, when other variables are constant, the level of disclosure of an entity can affect the expectations of individuals and the process of evaluating their shares. A higher level of disclosure by an entity affected the value of its share and the other company's.

Optimal and Long-Term Dynamic Transport Policy Design: Seeking Maximum Social Welfare through a Pricing Scheme.

This article presents an alternative approach to the decision-making process in transport strategy design. The study explores the possibility of integrating forecasting, assessment and optimization procedures in support of a decision-making process designed to reach the best achievable scenario through mobility policies. Long-term evaluation, as required by a dynamic system such as a city, is provided by a strategic Land-Use and Transport Interaction (LUTI) model. The social welfare achieved by implementing mobility LUTI model policies is measured through a cost-benefit analysis and maximized through an optimization process throughout the evaluation period. The method is tested by optimizing a pricing policy scheme in Madrid on a cordon toll in a context requiring system efficiency, social equity and environmental quality. The optimized scheme yields an appreciable increase in social surplus through a relatively low rate compared to other similar pricing toll schemes. The results highlight the different considerations regarding mobility impacts on the case study area, as well as the major contributors to social welfare surplus. This leads the authors to reconsider the cost-analysis approach, as defined in the study, as the best option for formulating sustainability measures.

Integration of congestion pricing and intertemporal preference rate in social welfare function

Assessing social benefits in transport policy implementation has been studied by many researchers using theoretical or empirical measures. However, few of them measure social benefit using different discount rates including the inter-temporal preferences rate of users, the private investment discount rate and the inter-temporal preferences rate of the government. In general, the social discount rate used is the same for all social actors. Therefore, this paper aims to assess a new method by integrating different types of discount rate belonging to different social actors in order to measure the real benefits of each actor in the short, medium and long term. A dynamic simulation is provided by a strategic Land-Use and Transport Interaction (LUTI) model. The method is tested by optimizing a cordon toll scheme in Madrid considering socio- economic efficiency and environmental criteria. Based on the modified social welfare function (WF), the effects on the measure of social benefits are estimated and compared with the classical WF results as well. The results of this research could be a key issue to understanding the relationship between transport system policies and social actors' benefits distribution in a metropolitan context. The results show that the use of more suitable discount rates for each social actor had an effect on the selection and definition of optimal strategy of congestion pricing. The usefulness of the measure of congestion toll declines more quickly overtime.

Integration of congestion pricing and intertemporal preferences rate integration in social welfare function

Many researchers have used theoretical or empirical measures to assess social benefits in transport policy implementation. However, few have measured social benefits by using discount rates, including the intertemporal preference rate of users, the private investment discount rate, and the intertemporal preference rate of the government. In general, the social discount rate used is the same for all social actors. This paper aims to assess a new method by integrating different types of discount rates belonging to different social actors to measure the real benefits of each actor in the short term, medium term, and long term. A dynamic simulation is provided by a strategic land use and transport interaction model. The method was tested by optimizing a cordon toll scheme in Madrid, Spain. Socioeconomic efficiency and environmental criteria were considered. On the basis of the modified social welfare function, the effects on the measure of social benefits were estimated and compared with the classical welfare function measures. The results show that the use of more suitable discount rates for each social actor had an effect on the selection and definition of optimal strategy of congestion pricing. The usefulness of the measure of congestion toll declines more quickly over time. This result could be the key to understanding the relationship between transport system policies and the distribution of social actors? benefits in a metropolitan context.

Optimal and Long-Term Dynamic Transport Policy Design: Seeking Maximum Social Welfare through a Pricing Scheme

This article presents an alternative approach to the decision-making process in transport strategy design. The study explores the possibility of integrating forecasting, assessment and optimization procedures in support of a decision-making process designed to reach the best achievable scenario through mobility policies. Long-term evaluation, as required by a dynamic system such as a city, is provided by a strategic Land-Use and Transport Interaction (LUTI) model. The social welfare achieved by implementing mobility LUTI model policies is measured through a cost-benefit analysis and maximized through an optimization process throughout the evaluation period. The method is tested by optimizing a pricing policy scheme in Madrid on a cordon toll in a context requiring system efficiency, social equity and environmental quality. The optimized scheme yields an appreciable increase in social surplus through a relatively low rate compared to other similar pricing toll schemes. The results highlight the different considerations regarding mobility impacts on the case study area, as well as the major contributors to social welfare surplus. This leads the authors to reconsider the cost-analysis approach, as defined in the study, as the best option for formulating sustainability measures.

Active Learning and Dynamic Pricing Policies

In this paper, we address the problem of dynamic pricing to optimize the revenue coming from the sales of a limited inventory in a finite time-horizon. A priori, the demand is assumed to be unknown. The seller must learn on the fly. We first deal with the simplest case, involving only one class of product for sale. Furthermore the general situation is considered with a finite number of product classes for sale. In particular, a case in point is the sale of tickets for events related to culture and leisure; in this case, typically the tickets are sold months before the event, thus, uncertainty over actual demand levels is a very a common occurrence. We propose a heuristic strategy of adaptive dynamic pricing, based on experience gained from the past, taking into account, for each time period, the available inventory, the time remaining to reach the horizon, and the profit made in previous periods. In the computational simulations performed, the demand is updated dynamically based on the prices being offered, as well as on the remaining time and inventory. The simulations show a significant profit over the fixed-price strategy, confirming the practical usefulness of the proposed strategy. We develop a tool allowing us to test different dynamic pricing strategies designed to fit market conditions and seller s objectives, which will facilitate data analysis and decision-making in the face of the problem of dynamic pricing.

The impact of the internet on the pricing strategies of the European low cost airlines

This study seeks to analyse the price determination of low cost airlines in Europe and the effect that Internet has on this strategy. The outcomes obtained reveal that both users and companies benefit from the use of ICTs in the purchase and sale of airline tickets: the Internet allows consumers to increase their bargaining power comparing different airlines and choosing the most competitive flight, while companies can easily check the behaviour of users to adapt their pricing strategies using internal information. More than 2500 flights of the largest European low cost airlines have been used to carry out the study. The study revealed that the most significant variables for understanding pricing strategies were the number of rivals, the behaviour of the demand and the associated costs. The results indicated that consumers should buy their tickets before 25 days prior to departure.

Energy efficiency: the ever neglected priority of the European energy strategy. Egmont Paper No. 66, June 2014

Summary. Energy saving has been a stated policy objective of the EU since the 1970s. Presently, the 2020 target is a 20% reduction of EU energy consumption in comparison with current projections for 2020. This is one of the headline targets of the European Energy Strategy 2020 but efforts to achieve it remain slow and insufficient. The aim of this paper is to understand why this is happening. Firstly, this paper examines the reasons why public measures promoting energy efficiency are needed and what form these measures should optimally take (§ 1). Fortunately, over the last 20 years, much research has been done into the famous ‘energy efficiency gap’ (or ‘the energy efficiency paradox’), even if more remains to be done. Multiple explanations have been given: market failures, modelling flaws and behavioural obstacles. Each encompasses many complex aspects. Several types of instruments can be adopted to encourage energy efficiency: measures guaranteeing the correct pricing of energy are preferred, followed by taxes or tradable white certificates which in turn are preferred to standards or subsidies. Information programmes are also necessary. Secondly, the paper analyzes the evolution of the different programmes from 2000 onwards (§ 2). This reveals the extreme complexity of the subject. It deals with quite diverse topics: buildings, appliances, public sector, industry and transport. The market for energy efficiency is as diffuse as energy consumption patterns themselves. It is composed of many market actors who demand more efficient provision of energy services, and that suppliers of the necessary goods and know-how deliver this greater efficiency. Consumers in this market include individuals, businesses and governments, and market activities cover all energy-consuming sectors of the economy. Additionally, energy efficiency is the perfect example of a shared competence between the EU and the Member States. Lastly, the legal framework has steadily increased in complexity, and despite the successive energy efficiency programmes used to build this framework, it has become clear that the gap between the target and the results remains. The paper then examines whether the 2012/27/EU Directive adopted to improve the situation could bring better results. It briefly describes the content of this framework Directive, which accompanies and implements the latest energy efficiency programme (§ 3). Although the Directive is technically complex and maintains nonbinding energy efficiency targets, it certainly represents an improvement in several aspects. However, it is also saddled with a multiplicity of exemption clauses and interpretative documents (with no binding value) which weaken its provisions. Furthermore, alone, it will allow the achievement of only about 17.7% of final energy savings by 2020. The implementation process, which is essential, also remains fairly weak. The paper also gives a glimpse of the various EU instruments for financing energy efficiency projects (§ 4). Though useful, they do not indicate a strong priority. Fourthly, the paper tries to analyze the EU’s limited progress so far and gather a few suggestions for improvement. One thing seems to remain useful: targets which can be defined in various ways (§ 5). Basically, all this indicates that the EU energy efficiency strategy has so far failed to reach its targets, lacks coherence and remains ambiguous. In the new Commission’s proposals of 22 January 2014 – intended to define a new climate/energy package in the period from 2020 to 2030 – the approach to energy efficiency remains unclear. This is regrettable. Energy efficiency is the only instrument which allows the EU to reach simultaneously its three targets: sustainability, competitiveness and security. The final conclusion appears thus paradoxical. On the one hand, all existing studies indicate that the decarbonization of the EU economy will be absolutely impossible without some very serious improvements in energy efficiency. On the other hand, in reality energy efficiency has always been treated as a second zone priority. It is imperative to eliminate this contradiction.