scholarly journals Conducting a Pricing Transactional Assessment, Integrating Cluster and Segments Analyses, To Leverage the Customer Profitability

2021 ◽  
Vol 06 (05) ◽  
Author(s):  
Machado, Diogo ◽  
Keyword(s):  
Sensitivity Analysis ◽  
Cost Allocation ◽  
Evaluation Methodology ◽  
Business Relationship ◽  
Customer Profitability ◽  
Allocation System ◽  
Pricing Decisions ◽  
Customer Evaluation ◽  
Profitability Analysis ◽  
Supporting Tool

The profitability set per customer of a given organization implies several challenges, from the calculation of the net pricing to the development of a cost allocation system within the company's main processes. Thus, the work proposed aims at exploring the potential of a customer evaluation methodology, using pricing techniques as a supporting tool, where the analysis of customer clusters will be done. We aim to identify profitability patterns, according to the customer's supply chain role, the dimension and the potential of the business, the types of transactions frame that are established, as well as the relative effects of each cluster own characteristics in the overall business relationship. After developing the methodology, the customer profitability analysis will be performed and recommendations will be set, highlighting and quantifying the possible improvements in the contribution. The use of leveraging techniques by the average and sensitivity analysis will support the recommendations. These insights will drive the companies in their pricing decisions also as shifting their focus towards attracting and retaining the customers from the more profitable clusters.

scholarly journals The Use of Pricing Tools to Leverage the Business Partners’ Profitability

2021 ◽  
Vol 7 (1) ◽  
pp. 44
Author(s):  
Diogo Machado ◽  
Rui Fernandes
Keyword(s):  
Cost Allocation ◽  
Evaluation Methodology ◽  
Business Relationship ◽  
Customer Profitability ◽  
Allocation System ◽  
Business Partners ◽  
Pricing Decisions ◽  
Customer Evaluation ◽  
Supporting Tool ◽  
The Relationship

The profitability set per customer of a given organization implies several challenges, from the calculation of the net pricing to the development of a cost allocation system within the company's processes. Thus, the work proposed aims at exploring the potential of a customer evaluation methodology, using pricing techniques as a supporting tool, where the analysis of the customer clusters profitability will be done, in order to identify profitability patterns, according to the characteristics of the relationship between the customer and the company, including the customer's supply chain role, the dimension and the potential of the business under study, the types of business relationships that are established, as well as the relative effects of each cluster own characteristics in the overall business relationship. After developing the methodology, the customer profitability will be analyzed and recommendations will be set, highlighting and quantifying the possible improvements in the contribution, under leveraging techniques by the average and sensitivity analysis simulations. These insights will support the companies in their pricing decisions also as shifting their focus towards attracting and retaining the customers from the more profitable clusters.

Usulan Time-Driven Activity Based Costing System, Customer Profitability Analysis dan Sistem Pengendalian Internal pada Perusahaan Logistik

2021 ◽  
Vol 8 (01) ◽  
pp. 1-13
Author(s):  
Feny Triagustina ◽  
Lindawati Gani
Keyword(s):  
Content Analysis ◽  
Internal Control ◽  
Cost Allocation ◽  
Descriptive Analysis ◽  
Performance Theory ◽  
Price Setting ◽  
Activity Based Costing ◽  
Customer Profitability ◽  
Product Cost ◽  
Profitability Analysis

ABSTRACT This research aims to answer the problem arising in PTX, a logistic services company, that never achieved target profit over five past years. This study is conducted using a case study with a qualitative research method. The data are analysed using descriptive analysis and content analysis techniques based on performance theory. Results shows that PT X cannot achieve target profit due to inaccurate allocation of product cost and inaccurate price setting. To improve product cost and price setting accuracy, this research recommends PT X to conduct Customer Profitability Analysis, apply Time-Driven Activity Based Costing to cost allocation and apply internal control system. ABSTRAK Penelitian ini bertujuan untuk menjawab permasalahan yang terjadi di PT X yang bergerak di industri jasa logistik. PT X belum pernah mencapai target laba sejak lima tahun terakhir. Strategi penelitian yang digunakan adalah studi kasus dengan metode penelitian kualitatif. Penelitian ini menggunakan teknik analisis data yaitu descriptive analysis dan content analysis berdasarkan performance theory. Hasil penelitian ini menunjukkan bahwa PT X tidak dapat mencapai target laba dikarenakan adanya alokasi biaya yang tidak memperhitungkan biaya tidak langsung dan penentuan tarif yang tidak didasarkan oleh perhitungan harga pokok penjualan. Untuk keakuratan alokasi biaya dan penentuan tarif, penelitian ini memberikan usulan pada PT X untuk melakukan Customer Profitability Analysis, menggunakan Time-Driven Activity Based Costing untuk alokasi biaya serta menerapkan sistem pengendalian internal.

The role of organizational culture in the adoption of customer profitability analysis: a field study

2017 ◽  
Vol 14 (1) ◽  
pp. 38-59 ◽  
Author(s):  
Matthew Fish ◽  
William Miller ◽  
D’Arcy Becker ◽  
Aimee Pernsteiner
Keyword(s):  
Organizational Culture ◽  
Financial Reporting ◽  
Performance Measurement System ◽  
Growth Spurt ◽  
Stage Model ◽  
Customer Profitability ◽  
Content Type ◽  
Implementation Team ◽  
Profitability Analysis

Purpose The purpose of this paper is to examine the role of organizational culture as a company migrates through a four-stage model for designing a performance measurement system (PMS) focused on customer profitability. Design/methodology/approach This is a single-site phenomenological case study, at Growth Spurt Marine Accessories (Growth Spurt), a manufacturing organization headquartered in the USA. Data were collected over a two-year period through interviews with accounting staff, internal company documents and recording observational notes. Findings The paper identifies three major factors that prevented Growth Spurt from transitioning its customer profitability analysis (CPA) reporting package through Kaplan and Cooper’s four-stage model of PMS design: executives exerting their power and spending political capital to prevent implementation without providing rationale, executives believing that the allocation methods were too subjective and executives relying on their own intuition in analyzing customer profitability rather than relying on data. These factors suggest that organizational culture plays an important role in migrating a customer-focused profitability PMS through Kaplan and Cooper’s four-stage model of PMS system design. Research limitations/implications The findings suggest that a PMS focused on customer profitability that does not advance beyond Stage II (financial reporting-driven) may still suit the needs of an organization. Additionally, managers should advocate for a multidisciplinary PMS design and implementation team to minimize potentially adverse effects of organizational culture. Originality/value This paper is unique because it applies Kaplan and Cooper’s four-stage model for PMS design to CPA and it uses a phenomenological case approach to explore impediments to a comprehensive CPA implementation.

Ethical Yielding

2015 ◽  
pp. 229-237
Keyword(s):  
Product Development ◽  
Capacity Management ◽  
Yield Management ◽  
Customer Profitability ◽  
Market Segments ◽  
Profitability Analysis ◽  
Regular Customer ◽  
Value Relations

Customer Profitability Analysis (CPA) is a procedure that provides management with information related to customers that will allow them to manage revenue from a profit perspective. The data attained from CPA will assist with decisions regarding marketing, product development, and capacity management to create a customer mix, which will provide the best profit results. BAR means the best available rate, in which a regular customer is charged in case he has approved to reserve. The various stages of yield management include: 1) grow a profit culture, 2) study the overall demand, 3) create price value relations, 4) form suitable market segments, 5) evaluate the pattern of demand, 6) find the failures and denials, and 7) assess and review the system.

scholarly journals A marketing view of the customer value: Customer lifetime value and customer equity

2013 ◽  
Vol 44 (4) ◽  
pp. 47-64 ◽  
Author(s):  
A. M. Estrella-Ramón ◽  
M. Sánchez-Pérez ◽  
G. Swinnen ◽  
K. VanHoof
Keyword(s):  
Customer Value ◽  
Customer Lifetime Value ◽  
Customer Equity ◽  
Future Research ◽  
Customer Profitability ◽  
Profitability Analysis ◽  
Customer Lifetime ◽  
Lifetime Value ◽  
Equity Measures

Throughout this research the customer valuation trend in marketing is going to be reviewed, emphasizing Customer Lifetime Value and Customer Equity measures. The main theoretical contributions in the development and evolution of the Customer Lifetime Value concept are analysed. Customer Lifetime Value is also differentiated from Customer Equity and Customer Profitability analysis to estimate customer value in terms of firm profitability. Customer Lifetime Value and Customer Equity concepts are formally defined. Additionally, a classification of a set of published researches into Customer Lifetime Value and/or Customer Equity is developed. This classification has been posited according to several criteria that serves as a guide to key requirements for developing these types of models. Finally,several conclusions, suggestions and future research streams are highlighted.

Customer profitability analysis:

1995 ◽  
Vol 10 (7) ◽  
pp. 3-7 ◽  
Author(s):  
Malcolm Smith ◽  
Shane Dikolli
Keyword(s):  
Customer Profitability ◽  
Profitability Analysis
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