Developing Service-based Solutions for Water Treatment in Finnish Mining Industry

The aim of this master’s thesis is to analyze the mining industry customers' current and future needs for the water treatment services and discover new business development opportunities in the context of mine water treatment. In addition, the study focuses on specifying service offerings needed and evaluate suitable revenue generation models for them. The main research question of the study is: What kind of service needs related to water treatment can be identified in the Finnish mining industry? The literature examined in the study focused on industrial service classification and new service development process as well as the revenue generation of services. A qualitative research approach employing a case study method was chosen for the study. The present study uses customer and expert interviews as primary data source, complemented by archival data. The primary data was gathered by organizing total of 13 interviews, and the interviews were analyzed by using qualitative content analysis. The abductive-logic was chosen as the way of conducting scientific reasoning in this study. As a result, new service proposals were developed for Finnish mine industry suppliers. The main areas of development were on asset efficiency services and process support services. The service needs were strongly associated with suppliers’ know-how of water treatment process optimization, cost-effectiveness as well as on alternative technologies. The study provides an insight for managers that wish to pursue a water treatment services as a part of their business offering.

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.

Barriers of ESCO Service Business in Finland

The purpose of this study is to determine what are the key barriers hampering ESCO service business success in Finland. Research approach for this study is qualitative. Data was collected using Delphi method with two questionnaire rounds. Internet based tool was applied in carrying out questionnaires. Respondents of the questionnaires were ESCO service experts and researchers, and people working for ESCO service providers. Characteristics of ESCO service and ESCO project implementation are analyzed by using transaction costs theory of service business. In terms of ESCO service in Finland, uncertainty and asset specificity are relevant dimensions of TCE. General uncertainty in world’s economy hinders demand for ESCO service, and asset specificity of ESCO contracts induces slight problems for project financiers. Also bounded rationalism and opportunism are present in Finnish ESCO business. The most significant barriers of success of ESCO service in Finland are problems in legislative and political frameworks, and in customers’ investment processes. ESCO service providers should move more strongly towards service dominant business logic and improve understanding of customer needs. Political barriers are unsuitable procurement processes, unclear and unpredictable laws, and lack of compelling factors in subsidy system. Investment process hurdles are caused by customers’ lack of interest to change course of action. These are things in which ESCOs can have influence in.

Service Blueprinting in Irregularity Service Improvement, case Swissport Finland Ltd

The trend of concentrating to core competencies leads to outsourcing of non-core activities. One such activity is logistics, where the responsibility is given to third-party service providers. This means the service provider acts as an intermediary between the buyer and the end customer. This thesis concentrates on depicting the operational environment of one such service provider, Swissport Finland Ltd, and the improvement of their checked baggage irregularity service. The tools used for this work were service blueprinting, an illustrative method for service mapping, and failure modes and effects analysis. The theoretical part of the thesis offers a framework for using these tools for logistics services, while the empirical part consists of a study mostly qualitative in nature. Action research method was used for the service improvement research. According to the results of this study the combination of service blueprinting and FMEA can be used successfully for irregularity service improvement. The most important result was an enhanced irregularity process that has been found to alleviate earlier problems.

Mobile clinics in public health care: Integrated service offerings for rural elderly

This research is an analysis of the value and content of local service offerings that enable longer periods of living at home for elderly people. Mobile health care and new distribution services have provided an interesting solution in this context. The research aim to shed light on the research question, ‘How do we bundle services based on different customer needs?’ A research process consisting of three main phases was applied for this purpose. During this process, elderly customers were segmented, the importance of services was rated and service offerings were defined. Value creation and service offering provides theoretical framework for the research. The target group is South Karelia’s 60 to 90-year old individuals and the data has been acquired via a postal questionnaire. Research has been conducted as exploratory research utilizing the methods of quantitative and social network analysis. The main results of the report are identified customer segments and service packages that fits to the segments’ needs. The results indicate the needs of customers and the results are additionally analysed from the producer’s point of view. In addition to the empirical results, the used theory framework has been developed further in order for the service-related theories to be seen from the customer’s point of view and not just from the producer’s point of view.

Developing the Product Return Process of a Service Center With Lean Methods

Today lean-philosophy has gathered a lot of popularity and interest in many industries. This customer-oriented philosophy helps to understand customer’s value creation which can be used to improve efficiency. A comprehensive study of lean and lean-methods in service industry were created in this research. In theoretical part lean-philosophy is studied in different levels which will help to understand its diversity. To support lean, this research also presents basic concepts of process management. Lastly theoretical part presents a development model to support process development in systematical way. The empirical part of the study was performed by performing experimental measurements during the service center’s product return process and by analyzing this data. Measurements were used to map out factors that have a negative influence on the process flow. Several development propositions were discussed to remove these factors. Problems mainly occur due to challenges in controlling customers and due to the lack of responsibility and continuous improvement on operational level. Development propositions concern such factors as change in service center’s physical environment, standardization of work tasks and training. These factors will remove waste in the product return process and support the idea of continuous improvement.

Customer knowledge processing in maintenance business: case study

The purpose of the study is to examine and increase knowledge on customer knowledge processing in B2B context from sales perspective. Further objectives include identifying possible inhibiting and enabling factors in each phase of the process. The theoretical framework is based on customer knowledge management literature. The study is a qualitative study, in which the research method utilized is a case study. The empirical part was implemented in a case company by conducting in-depth interviews with the company’s value-selling champions located internationally. Context was maintenance business. Altogether 17 interviews were conducted. The empirical findings indicate that customer knowledge processing has not been clearly defined within the maintenance business line. Main inhibiting factors in acquiring customer knowledge are lack of time and vast amount of customer knowledge received. Enabling factors recognized are good customer relationships and sales representatives’ communication skills. Internal dissemination of knowledge is mainly inhibited by lack of time and restrictions in customer relationship management systems. Enabling factors are composition of the sales team and updated customer knowledge. Inhibiting utilization is lack of goals to utilize the customer knowledge and a low quality of the knowledge. Moreover, customer knowledge is not systematically updated nor analysed. Management of customer knowledge is based on the CRM system. As implications of the study, it is suggested for the case company to define customer knowledge processing in order to support maintenance business process.

The role of network externalities in value creating process of the commercial web service for two-sided international markets

Network externalities and two-sided markets in the context of web services and value creation is not very well discussed topic in academic literature. The explosive rise of the Internet users has created a strong base for many successful web services and pushed many firms towards e-business and online service based business models. Thus the subject of this thesis, the role of network externalities in value creating process of the commer-cial web service for two-sided international markets is very current and interesting topic to examine. The objective of this Master’s Thesis is to advance the study of network externalities from the viewpoint of two-sided markets and network effects as well as describe the value creation & value co-creation process in commercial web service business models. The main proposition suggests that the larger network of customers and the bigger number of users the web service is able to attract, the more value and stronger positive net-work externalities the service is able to create for each customer group. The empirical research of this study was implemented for commercial web service, targeted to Russian consumers and Finnish business users. The findings suggest that the size of the network is highly related to the experi-enced value of the customers and the whole value creation process of commercial web targeted for two-sided international markets varies from the value creation for one-sided or pure domestic markets.

Customer value assessment in business markets

Understanding how firms create, communicate, and deliver value to customers is a key factor when firms seek to differentiate in increasingly competitive and commoditized business markets. As product and price have become less important differentiators in many industries, suppliers are increasingly seeking ways to differentiate themselves based on delivered customer value. Therefore, to gain a holistic understanding on what their offerings are worth to the customer, suppliers need to conduct customer value assessment, which quantifies the impact of a supplier´s offering to customers’ costs and returns. However, from a managerial perspective, customer value assessment is the single most critical challenge for firms in business markets. Consequently, developing holistic frameworks for customer value assessment is seen as one of the most important research priorities for marketing research. The purpose of this study is to explore the process of customer value assessment in business markets. Business markets represent a context where an increasing number of industrial firms are transitioning from basic product offerings towards service-based and solution-oriented hybrid offerings, which emphasize value co-creation and realization in the long term, thus making it difficult to quantify their monetary value. This study employs exploratory and qualitative research design by applying inductive and discovery-oriented grounded theory and multiple case research methods. The empirical data comprise interviews with 61 managers from 12 industrial firms, including seven best practice firms in customer value assessment. The findings of this study show that customer value assessment is essentially a crossfunctional process, which involves several organizational functions. The process begins well before and continues long after the actual delivery, often until the end of a supplier´s offering’s life-cycle. Furthermore, the findings shed light on alternative strategies that firms in business markets can adopt to implement the customer value assessment process. Overall, the findings contribute to customer value research, the sales and organizational management literature, the service marketing and solutions business literature, and suggest several managerial implications on how firms in business markets can adopt a holistic approach to assess value created for customers.

Factors Affecting Customer Profitability: a Bibliometric Study

The first objective of the thesis is to find out which factors impact on customer profitability has been studied in scientific articles. The second objective is to find out the main authors and publishers from the subject area. Expectations were to find factors from marketing and management accounting literature, but this study did not succeed to gather management accounting perspective on the subject area. This study used bibliometric methods. The data for this study was collected manually from Scopus and Web of Science databases. Search words resulted 770 articles and from those 82 were included to further analyze. Descriptive analysis, citation analysis and content analysis were made. Bibexcel and Pajek software were used in this study. Publication activity was concentrated on years 2004-2013. The most productive author around the subject area is Kumar Vipin from Georgia State University (USA). A multiple customer profitability factors were identified. A lot of research was made for example about satisfaction, relationship duration, loyalty, marketing actions and customer equity drivers. The research is concentrated on service sector. The results are suggesting that there are research gaps in business-to-business and manufacturing sector.

Service offering classification for logistics services

This thesis studies the development of service offering model that creates added-value for customers in the field of logistics services. The study focusses on offering classification and structures of model. The purpose of model is to provide value-added solutions for customers and enable superior service experience. The aim of thesis is to define what customers expect from logistics solution provider and what value customers appreciate so greatly that they could invest in value-added services. Value propositions, costs structures of offerings and appropriate pricing methods are studied. First, literature review of creating solution business model and customer value is conducted. Customer value is found out with customer interviews and qualitative empiric data is used. To exploit expertise knowledge of logistics, innovation workshop tool is utilized. Customers and experts are involved in the design process of model. As a result of thesis, three-level value-added service offering model is created based on empiric and theoretical data. Offerings with value propositions are proposed and the level of model reflects the deepness of customer-provider relationship and the amount of added value. Performance efficiency improvements and cost savings create the most added value for customers. Value-based pricing methods, such as performance-based models are suggested to apply. Results indicate the interest of benefitting networks and partnership in field of logistics services. Networks development is proposed to be investigated further.

Container logistic innovations in forest-energy sector: Markets, future service concepts and technical improvements

The report presents the results of the commercialization project called the Container logistic services for forest bioenergy. The project promotes new business that is emerging around overall container logistic services in the bioenergy sector. The results assess the European markets of the container logistics for biomass, enablers for new business creation and required service bundles for the concept. We also demonstrate the customer value of the container logistic services for different market segments. The concept analysis is based on concept mapping, quality function deployment process (QFD) and business network analysis. The business network analysis assesses key shareholders and their mutual connections. The performance of the roadside chipping chain is analysed by the logistic cost simulation, RFID system demonstration and freezing tests. The EU has set the renewable energy target to 20 % in 2020 of which Biomass could account for two-thirds. In the Europe, the production of wood fuels was 132.9 million solid-m3 in 2012 and production of wood chips and particles was 69.0 million solidm3. The wood-based chips and particle flows are suitable for container transportation providing market of 180.6 million loose- m3 which mean 4.5 million container loads per year. The intermodal logistics of trucks and trains are promising for the composite containers because the biomass does not freeze onto the inner surfaces in the unloading situations. The overall service concept includes several packages: container rental, container maintenance, terminal services, RFID-tracking service, and simulation and ERP-integration service. The container rental and maintenance would provide transportation entrepreneurs a way to increase the capacity without high investment costs. The RFID-concept would lead to better work planning improving profitability throughout the logistic chain and simulation supports fuel supply optimization.

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.

Linking supplier delivery risk to outbound delivery service performance improvement

Customer satisfaction should be the main focus for all of the parts of the business. Usually supply chain behind the business is in a key role when this focus is pursued especially in repair service business. When focusing on the materials that are needed to make repairs to equipment under service contracts, the time aspect of quality is critical. Do late deliveries from supplier have an effect on the service performance of repairs when distribution center of a centralized purchasing unit is acting as a buffer between suppliers and repair service business? And if so, how should the improvement efforts be prioritized? These are the two main questions that this thesis focuses on. Correlation and linear regression was tested between service levels of supplier and distribution center. Percentage of on-time deliveries were compared to outbound delivery service level. It was found that there is statistically significant correlation between inbound and outbound operations success. The other main question of the thesis, improvement prioritization, was answered by creating material availability based supplier classification and additional to that, by developing the decision process for the analysis of most critical suppliers. This was built on a basis of previous supplier and material classification methods.

Managing Customer Co-creation: Empirical Evidence from Finnish High-tech SMEs

The purpose of this thesis is to find out how customer co-creation activities are managed in Finnish high-tech SMEs by understanding managers’ views on relevant issues. According to theory, issues such as firm size, customer knowledge implementation, lead customers, the fuzzy front-end of product/service development as well as the reluctance to engage in customer co-creation are some of the field’s focal issues. The views of 145 Finnish SME managers on these issues were gathered as empirical evidence through an online questionnaire and analyzed with SPSS statistics software. The results show, firstly, that Finnish SME managers are aware of the issues associated with customer co-creation and are able to actively manage them. Additionally, managers performed well in regards to collaborating with lead customers and implemented customer knowledge evenly in various stages of their new product and service development processes. Intellectual property rights emerged as an obstacle deterring managers from engaging in co-creation. The results suggest that in practice managers would do well by looking for more opportunities to implement customer knowledge in the early and late stages of new product and service development, as well as by actively searching for lead customers.