Browsing by Author "Hervonen, Tuomas"

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Conceptualization and Quantification of Customer Value in Industrial Selling
(2014-10-01) Hervonen, Tuomas
Perustieteiden korkeakoulu | Master's thesis
Creating and delivering superior customer value is seen as a prerequisite for achieving competitive advantage. Commoditization, global sourcing, and professionalism in purchasing have lead suppliers to seek for ways to avoid price competition. Sales approaches that are based on value provide a way to shift the customers’ focus from prices to business impacts, requiring the supplier to quantify and communicate the value creation potential of the offering to the customer. However, the literature on customer value does not provide suitable value constructs to support value quantification, establishing the research gap of this study. Thus, the aim of this thesis is to explore how customer value should be quantified in industrial selling and to conceptualize customer value as a measurable construct to make it suitable for quantification purposes. A literature research is first conducted, discussing the existing theories regarding the characteristics of customer value and the various value dimensions and elements arising from the literature. Additionally, the background of using value in selling is studied, followed by discussion over procedures and tools that are used in quantifying customer value. A multiple case study including five large industrial case companies is conducted in order to replicate and validate the quantification-related findings of the literature research. One case company is additionally used for evaluating the value construct-related theoretical findings. Altogether six semi-structured interviews, several meetings, three group sessions, external interview materials, and other company documents were used as data for the empirical research. This thesis proposes a new conceptualization of customer value, defining it as the perceived difference of benefits received and sacrifices made by the customer. Customer value is conceptualized as a two dimensional construct that combines the operational and strategic value dimensions. To make the practical implementation of the construct easier, the value elements are categorized as the economically measurable elements and the individually measurable value placeholder elements. The second major outcome of the research is a process description of how value should be quantified in industrial selling. The process consists of three parts: gaining customer understanding, assessing the value creation potential, and communicating value to the customer. The process description includes discussion over procedures, tools, potential challenges, and the practical implementation of the value construct. The theoretical implications of the thesis include the new conceptualization of value and a formal survey for further validating the proposed value construct. On the other hand, the pro-posed value construct and the quantification process description can provide industrial managers with valuable ideas and guidelines for designing and developing value quantification processes and tools in practice. This thesis also recommends the detailed operationalization of customer value as an avenue for further research.
Monimuotoisen osaamisen hankinta
(2011) Hervonen, Tuomas
School of Science | Bachelor's thesis