Developing and using a customer profile data bank

This article proposes the implementation of a customer profile system to aid the industrial marketer in: making daily sales decisions involving the firm's customers; the development of the vendor's “buyer mix”; and the production of marketing analysis reports used by the firm. The components of the customer profile are presented and the procedures by which these elements can be incorporated into the firm's decision making are explained. Working examples are also provided to reinforce the concepts. Unfortunately the names of the actual corporations had to be deleted or changed for reasons of confidentiality.     

New Product Preannouncement as a Signaling Strategy: An Audience‐Specific Review and Analysis*

Firms in various industries with highly competitive environments use new product preannouncement (NPP) as one of the most effective and popular signaling tools. Preannouncements can bring both benefits and costs to firms. Extant research has studied NPP from different perspectives and tackled the questions, “Should a new product be preannounced and when?” and “What information should be preannounced and why?” However, the benefits and costs of preannouncements from an audience‐specific perspective are less well understood. It is important to notice that benefits and costs of a preannouncement vary among different audiences and firms need to apply group‐specific weights in assessing the overall benefits and costs prior to making new product preannouncements. The purpose of this article is to review the existing literature on new product preannouncements for commonly observed marketing problems and to develop a general approach focusing on the target audiences and the incentives in sending signals to each audience and the impacts of these signals. This paper first reviews the literature on marketing‐related NPP issues as well as the determinants and effects of various factors on NPP decisions. Then, it discusses the phenomenon of new product preannouncements linked to other marketing and economics problems: (1) product development and positioning; (2) product diffusion and adoption; (3) firm value; (4) vaporware and antitrust litigations; and (5) consumer welfare. In addition, this paper divides the target audience of the new product preannouncement into four groups: customers, competitors, investors, and distributors. Based on current signaling theory, it proposes an audience‐specific framework to analyze the determinants, incentives, and impact of new product preannouncements. The proposed approach may provide more comprehensive insights on NPP strategies to managers and industrial decision makers. Finally, the paper suggests a number of future research directions from four different perspectives (i.e., customer, firm, government/industry, and methodology).     

More effective sales force reporting

As the need for marketing intelligence by sales and marketing managers grows more essential, field sales personnel are increasingly being asked to gather and report information. Many executives realize the potential value of using salespersons to supply information useful to management decision making. The sales force is familiar with their territories, their customers' needs and sources of information inside customer organizations, their competitors' marketing activities, and trends in product acceptance. The incremental costs and effort required are low compared to other research methods, since information can be submitted within the context of a regular call report system [2, 6, 8].But salespersons have been found to be inadequate and uncooperative reporters in many instances. Numerous field salespersons believe that reporting infringes on their primary responsibility of selling, and furthermore that management apparently doesn't make use of the resulting information anyway. Thus, while salespersons have access to a wealth of marketing information of potentially great value to the firm, they are often inadequate, unreliable, and unmotivated reporters [4, 5].This article reports the results of a study designed to investigate what management practices contribute to, or detract from, effective reporting of marketing information by salespersons. Current practices in reporting are noted and some recommendations are made to help management improve sales force reporting.     

The implementation of customer profitability analysis: A case study

By using customer profitability analysis (CPA), firms can determine the profit contribution of customer segments and/or individual customers. This article presents an approach for the implementation of CPA. The implementation process is illustrated using a case study of a firm producing and selling professional cleaning products. The case study highlights specific issues related to CPA in an industrial setting, and the results provide examples of the possible benefits of implementing a process of regular CPA.     

Within‐industry diversification and firm performance—an S‐shaped hypothesis

This study shows that the interplay between “adjustment costs”, “coordination costs” and within‐industry diversification benefits, results in an S‐shaped relationship between within‐industry diversification and firm performance. At low levels of within‐industry diversification, coordination costs are negligible but “adjustment costs” are higher than the synergy benefits of a limited product scope, hence leading to negative performance outcomes. At moderate levels of within‐industry diversification synergies between related product categories substantially increase and outweigh the rise in adjustment and coordination costs, resulting in positive performance outcomes. Yet, extensive within‐industry diversification gives rise to considerable coordination costs, which, coupled with adjustment costs, outweigh synergy effects and hamper performance. The study further shows that a greater change rate of within‐industry diversification results in negative performance outcomes. Copyright © 2014 John Wiley & Sons, Ltd.     

From Experience: Why Bad Things Happen to Good New Products

The rollout of a new product can be an exhilarating time for everyone involved in the development and launch effort. Just as a construction crew may meet at a local gathering place to hail the “topping-off” of a new home or office building, the development team—or possibly the entire company—may gather to celebrate a new product’s release. Launch meetings generate enthusiasm among the salespeople, and favorable reviews lead to an influx of inquiries from prospective customers. Despite this initial wave of enthusiasm, however, customer desire for the innovative new product may soon wane. Does this mean that everyone was wrong about the new product’s potential?Citing three examples of launches that followed this pattern, Neil Rackham addresses a key question for product development professionals: “Why should promising products from highly respected companies fail despite clear evidence of market need, strong marketing support, and real enthusiasm and energy from salespeople?” Based on his own experience in these three cases, as well as research investigations into elements of these and other launches, he rejects the conventional wisdom that the problem stems from resistance to change on the part of either the customers or the salespeople.He suggests that the problem rests with the way in which highly innovative products are launched to the salesforce, which in turn influences the manner in which the products are sold. He notes that the launch of an innovative product typically focuses on all the great new features the product offers. However, the new features that make the product so exciting may draw the salesperson’s attention away from the most important issue in the selling process: the customer’s needs. In other words, he suggests that the launch and the selling of innovative products tend to be product-centered instead of customer-centered, causing customer interest to fade as the selling process progresses.Rather than fill the salesforce with details about a product’s “bells and whistles,” he suggests that the launch should focus on describing the product in terms of the problems it solves for the customer. Similarly, rather than bombard customers with details about product features, he suggests that the salesperson should focus on asking questions. In this customer-centered approach, the product’s features are considered only in terms of the manner in which they meet the customer’s needs.     

The Effect of Sales Force Adoption on New Product Selling Performance

Although several studies have suggested that the sales force is a major contributing factor to new product success, few studies have focused on new product adoption by the sales force, particularly with respect to its relationship with selling performance. The present article presents empirical evidence on the impact of sales force adoption on selling performance. We defined sales force adoption as the combination of the degree to which salespeople accept and internalize the goals of the new product (i.e., commitment) and the extent to which they work hard to achieve those goals (i.e., effort). It was hypothesized that the impact of sales force adoption on selling performance will be contingent on supervisory factors (sales controls, internal marketing of the new product, training, trust, and supervisor's field attention), and market volatility. Therefore, this article also provides evidence of the conditions under which sales force adoption of a new product is more or less effective in engendering successful selling performance. The hypothesized relationships were tested with data provided by 97 high technology firms from The Netherlands. The results show that sales force adoption is positively related to selling performance. This finding suggests that salespeople who simultaneously exhibit commitment and effort will achieve higher levels of new product selling performance. Outcome based control, internal marketing and market volatility are also positively related to new product selling performance. The effect of sales force adoption on selling performance is stronger where outcome based control is used and where the firm provides information on the background of the new product to salespeople through internal marketing. Training and field attention weaken the adoption‐performance linkage. These findings may indicate that salespeople in The Netherlands interpret training as “micromanaging” and field attention as “looking over their shoulder.” We conclude with implications of our study for research and managerial practice.     

Adoption of New Products by the Sales Force: The Construct, Research Propositions, and Managerial Implications

Some firms take salesforce commitment to any new product as a given, seemingly adopting the attitude, “If we build it, they will sell.” However, management has no guarantee of salesforce commitment to a new product. For various reasons, salespeople may fail to sell a new product, or they may engage in dysfunctional behavior during the selling process—for example, misrepresenting the product's benefits to gain short-term sales. Ensuring salesforce adoption of a new product requires careful consideration of the characteristics of the product, the competitive environment, the firm, and the members of the salesforce. In other words, managers who hope to engender support for a new product would do well to view the salespeople as a first line of customers. Successfully launching a new product to the company's salesforce requires the same high levels of creativity, energy, and managerial insight as does the product's launch into the marketplace. Consequently, managers and researchers need to examine more closely the factors underlying the successful launch of a new product to a firm's salesforce. As a first stop toward gaining greater insight into those factors, Kwaku Atuahene-Gima develops a model for exploring the characteristics that affect new-product adoption by the salesforce. His model suggests that a salesperson's commitment to a new product depends, to a large extent, on the salesperson's learning style, performance orientation, and problem-solving style. For example, he proposes that, compared to their colleagues with systematic problem-solving styles, salespeople with intuitive problem-solving styles are more likely to adopt a new product and are less likely to engage in dysfunctional behavior in the selling process. The model also suggests that the salesforce's perceptions of the firm's commitment to new products, tolerance for failure, and attitude toward intradepartmental conflict during the product development process play key roles in determining whether the salesforce will take an active, positive approach to selling the new product. For example, a firm that views occasional failures as opportunities for learning and growth offers an environment in which salespeople can accept the risks that selling a new product entails. The proposed model also takes into account the moderating effects of the product's innovativeness, the intensity of market competition, and the type of sales control systems that the firm uses.     

The impact of technical consultants on the quality of their clients' products: Evidence from the Bordeaux wine industry

Research summary : Recent research rooted in the resource‐based view of the firm suggests that resources are more likely to create value if they are effectively managed. An underlying assumption of the literature is that firms manage their resources on their own. However, many firms hire consultants to help them do so. In this study, I develop and test hypotheses regarding the impact of technical consultants on the quality of their clients' products. Using data from the Bordeaux wine industry, I find evidence that the use of technical consultants has a positive impact on relative product quality and a negative impact on the extremeness of relative product quality. Moreover, the positive impact of technical consultants on relative product quality is stronger at lower levels of relative resource quality. Managerial summary : Findings from a study in the Bordeaux wine industry indicate that the decision to hire consultants should depend on a firm's strategy. If a firm wants to improve its performance, it should hire consultants. Indeed, the “best practices” of technical consultants are generally more valuable than internally generated knowledge. If a firm wants to achieve outstanding performance, hiring consultants may not be the right decision. Because the “best practices” of technical consultants have more certain performance implications than internally generated knowledge, they decrease the likelihood of extremely low performance. However, their lack of uniqueness also decreases the likelihood of extremely high performance. Finally, the decision to hire consultants should depend on the quality of a firm's resources. Firms with low‐quality resources tend to benefit more from the “best practices” of technical consultants. Copyright © 2016 John Wiley & Sons, Ltd.     

Customer relationship management processes: How faithful are business-to-business firms to customer profitability?

Marketing academicians and practitioners have over the past decade advocated the implementation of customer equity principles within firms. This article draws on adaptive structuration theory to frame the faithfulness of firms to acquiring and maintaining customers according to their profit potential. Using survey data from 158 business units engaged in business-to-business sales, this article examines the motivational effects of market growth rate and customization requirements, and the technology and information integration capabilities of the firm as determinants of firm adherence to treating customers according to their profitability. The study finds that firms are better at maintaining customers according to their profit potential than acquiring customers according to their profit potential. Further, maintenance faithfulness appears to have more ultimate impact on firm performance. The study suggests that pursuing customer profitability has limited effectiveness unless accompanied by a broader range of initiatives aimed at making the firm more customer-focused.     

资本市场压力与企业策略性专利行为:卖空机制的视角

创新是一种不确定性高且周期长的投资活动,需要风险偏好更大、对失败容忍更高的市场环境,而资本市场具有筛选和发现创新型企业、有效分散创新风险的功能,因而对创新活动起着关键作用。然而,中国资本市场短期投资者比例高,融券交易成本高且交易不活跃,加上专利评价体系对不同质量的专利区分度较低,导致资本市场压力对创新活动没有发挥出信息机制和治理机制两种效应。相反,资本市场压力带来的负面信息表达渠道和管理层短期业绩压力,造成了中国专利申请中存在“重数量、轻质量”“重申请、轻维护”的企业策略性专利行为所衍生的“专利泡沫”问题。本文采用中国融资融券制度作为准自然实验,考察卖空机制对企业创新的影响效应和作用机理。研究发现,企业面临卖空压力时会更加积极地申请专利,但专利的申请质量有所下降,表现为专利授权率降低;专利结构有所恶化,最终授权数增加的主要是容易研发、授权快的实用新型专利和外观设计专利;专利得到授权后,企业放弃缴纳维持费用以终止专利权。这些策略性专利行为在短期内可以减少企业的卖空交易量,推高企业市值,但长期看对企业的业绩没有积极影响,是一种“创新假象”。卖空机制主要通过施压机制来影响企业创新,管理层业绩压力、外部监督压力、股价信息传递压力越大的企业,在面临卖空威慑时更有动力进行策略性专利行为。为促进企业创新向高质量发展,需要进一步完善融资融券制度和专利评价体系。     

Can customer loyalty to a salesperson be harmful? Examining customer perceptions of salesperson emotional labor strategies post ethical transgressions

Past research suggests that customer loyalty is a critical component in successful business-to-business sales relationships. Challenging this view, this study suggests that customer loyalty may actually have an unexpected “dark side” to it. Specifically, grounded in Emotions as Social Information (EASI) theory, this research investigates the role that customer loyalty (to a salesperson) has on customer coping behavior post salesperson ethical transgressions. We take the often-underrepresented customer perspective in selling relationships to test our theoretical model using a field study that consists of 239 professional procurement specialists. Our results indicate that when customers believe that a salesperson is more genuine in displaying emotions, after an ethical transgression, customers are more likely to forgive, and less likely to seek revenge against or avoid the salesperson. On the other hand, when customers believe that a salesperson is “faking” emotions, customers are more likely to cope with ethical transgressions by avoiding and seeking revenge against the salesperson. Our study also finds that when an ethical transgression occurs, a “love becomes hate” effect occurs, where customer loyalty undermines a salesperson's efforts and does not always favor the salesperson.     

The Contributions of Firm Innovativeness to Customer Value in Purchasing Behavior

The purpose of this research is to examine the influence of firm innovativeness and product innovativeness on the components of customer value mediated by instrumental and symbolic brand benefits. Over the last 10 years, the mobile phone industry in Korea has grown rapidly, with the introduction of several innovative phone features. The research context therefore is mobile phones with Internet access and their users in Korea. A major research finding is that the firm innovativeness affects product innovativeness, and hence, the instrumental brand benefits. A firm's innovativeness also has a significant effect on the symbolic brand benefits and the partnership value. Our key academic contribution is to expand the previous fragmentary studies of customer value, by classifying customer value into four components: expectation, partnership, transaction, and relationship customer values, rather than just focusing on benefits and sacrifices. Implications for managers include the verification that firm innovativeness is a source of ability for mobile phone firms to create value for customers. Instrumental and symbolic brand benefits through innovation should be the focus area for marketers and new product development (NPD) managers in mobile phone firms to communicate with consumers to increase expectation values in the prepurchase step.     

Overall corporate strategies for new product programs

The strategy an industrial firm elects for its product development program is increasingly viewed as a critical element of the firm's total corporate strategy. New product development and technology bear an integral relationship to an industrial company's strategic direction by helping to define the range of its possibilities [13]. This article reports the results of an empirical study whose purpose was to identify the major types of innovation strategies that firms pursue—strategy scenarios. A second purpose was to assess which strategies yield the best results.     

The evolution of the seven steps of selling

The traditional seven steps of selling is perhaps the oldest paradigm in the sales discipline. The seven steps model has served as a basic framework in sales training, personal selling textbooks, and teaching personal selling classes. Very little has changed in this framework since the turn of the 20th century. This article reviews the traditional seven steps of selling, examines transformative factors that have led to changes in each step, and presents an evolved seven steps process. While the traditional seven steps reflected a selling orientation on the part of a firm, the evolved selling process reflects more of a customer orientation in that the focus is on relationship selling—that is, securing, building, and maintaining long-term relationships with profitable customers.     

Virtual Customer Environments: Testing a Model of Voluntary Participation in Value Co-creation Activities

An increasing number of firms are hosting virtual customer environments (VCEs) to involve their customers in product development and product support activities. While the benefits to companies from hosting such VCEs are clear, another closely related issue has received far less attention: Why do customers participate voluntarily in value cocreation (here, product support) activities in such virtual customer environments? This study seeks to answer this question by developing and testing a conceptual model that draws on the uses and gratifications approach to consider an integrated set of four benefits that customers gain from their interactions in VCEs. The research model also incorporates the interaction‐based antecedents of these customer benefits. Drawing on concepts and insights from the areas of computer‐mediated communication and brand communities, the key characteristics of customers' interactions in the VCE are identified and related to the aforementioned four types of benefits. The study hypotheses are tested using data collected from customer participants of the VCEs of two firms, Microsoft and IBM. The dependent variable, customers' actual participation in the VCE, is operationalized as a time‐lagged variable, and the data for this are sourced from the Netscan database. Results offer strong support for the model and indicate that customers' participation in product support activities in a VCE is motivated not just by their “citizenship” or norm‐related behavior but stems primarily from their beliefs concerning the benefits of engaging in such activities. Results also show the impact of key interaction characteristics of VCEs on such perceived benefits and imply the need for firms to carefully design their VCEs to enhance customers' perceptions regarding potential benefits. The research model and the findings hold important implications for research and practice in customer coinnovation and product development. The model provides the basis for identifying the appropriate set of VCE design features. Companies can test the efficacy of their VCE design features by focusing on how such features augment the four types of benefits discussed and thereby ensure continued customer participation. The study findings also hold broader implications for practice in the customer relationship management area, particularly with regard to the potential to combine customers' VCE interactions with appropriate offline product‐related activities and to view the VCE as an integral element of the firm's overall customer relationship management initiative.     

A sales mix model for effective industrial selling

The purpose of this article is to focus on one aspect of the marketing mix for industrial firms. Specifically, the control of promotion centers on the promotional mix, which includes personal selling, advertising, and sales promotion. The personal sales mix model (Figure 1) highlights those factors that are controllable by the industrial sales representative. Also, the uncontrollables involved in industrial selling are discussed. An understanding of the personal sales mix model should aid industrial marketers in satisfying buyer's needs through effective selling.     

Innovative versus incremental new business services: Different keys for achieving success

In companies where new product development plays an important strategic role, managers necessarily contend with a portfolio of projects that range from high technology, new‐to‐the‐world, innovations to relatively simple improvements, adaptations, line extensions, or imitations of competitive offerings. Recent studies indicate that achieving successful outcomes for projects that differ radically in terms of innovativeness requires that firms adjust their NPD practices in line with the type of new product project they are developing. Based on a large‐scale survey of managers knowledgeable about new product development in their firm, this study focuses on new business‐to‐business service projects in an attempt to gain insights about the influence of product innovativeness on the factors that are linked to new service success and failure. The research results indicate that there are a small number of “global” success factors which appear to govern the outcome of new service ventures, regardless of their degree of newness. These include: ensuring an excellent customer/need fit, involving expert front line personnel in creating the new service and in helping customers appreciate its distinctiveness and benefits, and implementing a formal and planned launch program for the new service offering. Several other factors, however, were found to play a more distinctive role in the outcome of new service ventures, depending on how really new or innovative the new service was. For low innovativeness new business services, the results suggest that managers can enhance performance by: leveraging the firm's unique competencies, experiences and reputation through the introduction of new services that have a strong corporate fit; installing a formal “stage‐gate” new service development system, particularly at the front‐end and during the design stage of the development process; and ensuring that efforts to differentiate services from competitive or past offerings do not lead to high cost or unnecessarily complex service offerings. For new‐to‐the‐world business services, the primary distinguishing feature impacting performance is the corporate culture of the firm: one that encourages entrepreneurship and creativity, and that actively involves senior managers in the role of visionary and mentor for new service development. In addition, good market potential and marketing tactics that offset the intangibility of “really new” service concepts appear to have a positive performance effect.     

Agile-Stage-Gate: New idea-to-launch method for manufactured new products is faster,more responsive

New evidence reveals that Agile methods, until now used primarily for IT developments, can be integrated with traditional gating approaches to yield significant potential benefits for manufacturers of B2B physical products. Indeed, this new Agile-Stage-Gate hybrid approach represents a significant change to our thinking about how new-product development should be done since the introduction of today's popular gating systems thirty years ago!The article shows how Agile emerged in the IT industry and early attempts to integrate it with gating models, also in the IT world. The article moves on to the recent use of this hybrid model by manufacturers, and the results achieved by early adopters when implementing this new system in industries from food to heavy equipment. In terms of implementation, the details of the new Agile-Stage-Gate system are presented, including the “Power of Nine” – the three key artefacts (such as sprints and scrums); three important tools (such as sprint backlogs and burndown charts), and the three vital roles (such as the product owner and the scrum master) needed to make it work.Agile from the IT world cannot be directly integrated into Stage-Gate for physical products without some important modifications, however. These needed adjustments – such as redefining a “done sprint” and how to present versions of the product or “protocepts” for continuous customer feedback – are outlined, complete with a case study from an equipment manufacturer. Additionally, the article identifies and deals with ten important issues and apparent inconsistencies that arise when implementing this new system for B2B products.     

Product Development Time Performance: Investigating the Effect of Interactions between Drivers

Rapid and punctual new product development (NPD) has become a top priority in many organizations as competitors rush to commercialize emerging technologies and to satisfy customer needs. Despite the importance of this issue, conceptual models or systematic testing of specific drivers that could improve time performances in NPD are few and far between. There is, however, a lack of extensive empirical research into whether “interactions” between different drivers affect time performances. This article aims to investigate whether drivers can interact and can influence time performances with a “synergistic” effect. A survey was carried out in order to study the effects of two‐way driver interactions on “launch on time” and “launch against an accelerated schedule.” Three groups of drivers within the development‐process, organizational‐mechanisms, and strategic‐capabilities were considered. As this is an exploratory study, two‐way interactions between drivers of different groups were analyzed in order to detect which drivers had a synergistic effect on time performances. The study was based on a sample of 85 manufacturing firms producing mainly industrial goods. The NPD program within each company was considered, i.e., the new products developed and launched in the last three years. The statistical approach used is suitable for exploratory surveys. In the first phase, the G‐correlation test was used to verify the effects of single drivers in order to help interpret the results regarding two‐way driver interactions. In the second phase, regression models with two‐way driver interaction were performed with both linear and logistic regression in order to discover which significant models had a significant driver interaction. The resulting 13 models showed that interactions played an important role in determining time performances. The following are some of the most interesting results, as they have managerial implications. The NP Strategic Guide (clear definition and communication of new product goals) interacts with and enhances the influence of other drivers, such as predevelopment tasks, project manager use, and supplier and customer involvement. Technological and up‐front staff capabilities create important interactions with product definition and with customer involvement, which avoids development delays. Furthermore, the authors of this study discovered that the adoption of an overlapping approach without a high level of interfunctional team use may not be time efficient. Thus, if a firm has to work to a tight development schedule, it should seek and should integrate any possible synergistic effects between team use and overlapping development phases. The insights into interactions provide useful information that can be used when setting priorities and can help to attain higher performances by adopting a combination of selected drivers. In particular, the best practices, which many studies have highlighted, do influence time performances that depend mainly on the so‐called strategic‐capabilities drivers. These latter variables, unlike practices and activities, require a complex learning process. The path toward improvements within the development‐process requires both long periods of time and an integrated view of the process; hence, improvements cannot be achieved by simply applying common practices. Therefore, analysis of interactions within the NPD field looks promising and requires further study.