Marketing, customer profitability

Linking customer management effort to customer profitability in business markets. Journal of Marketing Research, 41(4) 433-447. 

Mulhern, F. J. 1999. Customer profitability analysis measurement, concentration, and research directions. Journal of Interactive Marketing, 13(1) 25-40. 

Niraj, R., Gupta, M., Narasimhan, C. 2001. Customer profitability in a supply chain. Journal of Marketing, 65(3) 1-16. 

Each element of the go-to-market value delivery system is likely to require the development of new tools and techniques that enable enhanced transparency and faster and improved fact-based decision making. This starts with enhancing the transparency of customer profitability, to gain an understanding that goes deeper than annual overall profitability by customer and provides transparency by customer, by product, and by transaction. Averages quite often disguise improvement opportunities - 50 percent of transactions are below the annual customer profitability. 

There are two major reasons why an organization should be involved in standards, including the international IT Security standards that are important to it. The first concerns the advantages such participation provides and the other concerns the risks that failure to participate allows. For international IT security standards, the results may have minor or major effects on different types of organizations. It must be obvious that IT vendors and particularly IT security vendors have a major stake in these standards. They effect their markets, business, profits and survival. For users, from countries to companies to individuals, the stakes are often less important but not in all cases. Countries are interested in their own protection, in the protection of their own investments, in the protection of their own industries and commerce, and in the protection of their own cultures. Companies have their own markets to protect, their own investments to leverage, and relationships with partners, customers, their countries, and their industries to consider. 

AT ESP, WE FOCUS ON CREATING NEWER AND BETTER SPILL-CONTROL SOLUTIONS that increase our customers profitability in today s tough markets. That means we make sorbents that perform better, find earth-friendly alternatives for others and keep them all competitively priced. 

One of the basic questions that conventional accounting procedures have difficulty answering is How profitable is this customer compared to another Usually customer profitability is only calculated at the level of gross profit - in other words the net sales revenue generated by the customer in a period, less the cost of goods sold for the actual product mix purchased, However, there are still many other costs to take into account before the real profitability of an individual customer can be exposed. The same is true if we seek to identify the relative profitability of different market segments or distribution channels. 

Most importantly, customer profitability analysis enables focal firms to link supply chain efforts to customer value and market opportunity in a way that improves customer relations and revenues in a profitable manner. 

With the introduction of the secondary market, the salvage value of any units available to the retailers at the end of the first period is increased from zero to / 2 0. A lower overage cost then provides an incentive for the retailers to increase their initial order quantity. Based on Theorem 4, it can be easily verified that the introduction of the secondary market will always increase the manufacturer s total profit as well as the primary market performance, measured by consumer sales and stockout level. That is, the introduction of the secondary market will benefit all entities along the supply chain the manufacturer, retailers, primary-market customers, and secondary-market customers. 

As for the retailers, it can be easily verified that the manufacturer s intervention will lower their expected profits. However, the manufacturer s intervention will never reduce the retailers expected profits to a level lower than in the absence of the secondary market. At the same time, since the service level to the primary-market customers is only a function of the order quantity 2, it is clear from Theorem 5 that the manufacturer s intervention will always reduce the service level to this segment of the market, even though diese customers will still be better off compared to the situation where the secondary maiket does not operate at all. Finally, the secondary market customers will always benefit from the manufacturer s intervention, as summarized in Theorem 6 ... 

The BP-Amoco Empress plant complex consists of three interconnected facilities located on a one mile square site. It operates 24 hours a day, 365 days a year, employing 70 personnel who work two shifts. If the plant were to shut down for a period of time, suppliers would have to sell their product on the spot market and forego profits. Also, from the customer s perspective, even a plant with reserves would soon run out of products. 

At the enterprise level, the executive management responds to the voice of ownership and is primarily concerned with profit, return on capital employed, market share, etc. At the business level, the managers are concerned with products and services and hence respond to the voice of the customer. At the operational level, the middle managers, supervisors, operators, etc. focus on processes that produce products and services and hence respond to the voice of the processes carried out within their own function. 

Customers may have specific requirements that apply to the contract acquisition processes, such as limitation on profit, special quotation forms, validity of quotation, etc. VDA 6.1, for example, has a requirement for the marketing function to be incorporated into the operational organization. 

Commercial Testing. The commercial test lab is by definition, in the business of testing. The satisfaction of its customers is paramount. Quality service and responsiveness holds old customers and attracts new ones. Getting dependable data fast is important, but here cost is critical. In a competitive market, the ability of LIMS to bring down the effective cost per test means more profit and/or the ability to keep or increase one s market share by lowering prices. 

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