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I
ABSTRACT
Author:
Title:
Juho Tuomas Kauhanen
Study on Customer Perceived Value of Container Loading
Equipment
Year: 2015 Place: Pieksämäki
Master’s Thesis
Examiners:
Lappeenranta University of Technology,
Department of Industrial Management.
81 Pages, 21 figures, 13 tables and 2 appendices.
Professor Asta Salmi, Lappeenranta University of Technology
D.Sc (Tech) Joona Keränen, Lappeenranta University of
Technology
Keywords: Organizational Buying Behavior, OBB, Customer Value,
Purchasing Process, Customer Value Propositions
The goal of the thesis was to gain understanding of organizational buying behavior
and its effect from the selling perspective and to generate base for verifying customer
value propositions for Actiw Oy. The first objective was to discover the current
buying decision criteria of current customers to understand the buying motives which
had led to the investment initially. Second objective was to understand how the
buying decision criteria and customer experiences can be turned into customer value
propositions. Research was done with 16 customer interviews, which were focused on
obtaining the information on the buying center and the value of the solution.
Thesis goes through the main theories of OBB and the theory behind customer value
management. Based on customer interviews, the currently used customer value
propositions were tested and categorized into points-of-parities and points-of-
differences. The interviews confirmed customer behavior in new task and modified
rebuy situations and also gave confirmation to the internally done customer value
propositions. Main finding of the study was, that as the value propositions are
possible to present more specifically to each new case instead of using all benefits at
the same time.
II
TIIVISTELMÄ
Tekijä:
Työn nimi:
Juho Tuomas Kauhanen
Tutkielma asiakkaan kokemasta arvosta kontitusjärjestelmän
osalta
Vuosi: 2015 Paikka: Pieksämäki
Diplomityö
Tarkastaja(t):
Lappeenrannan teknillinen yliopisto, tuotantotalous.
81 sivua, 21 kuvaa, 13 taulukkoa ja 2 liitettä.
Professori Asta Salmi, Lappeenrannan teknillinen yliopisto
TkT Joona Keränen, Lappeenrannan teknillinen yliopisto
Hakusanat:
Organisaation ostokäyttäytyminen, OBB, asiakasarvo,
ostoprosessi, asiakasarvoehdotelma
Työn tavoitteena oli selvittää organisaation ostokäyttäytymisen teoriaa sekä sen
vaikutusta myynnin näkökulmasta sekä luoda Actiw Oy:lle pohja jolla todentaa
asiakasarvoehdotelmia. Päätavoitteena oli ymmärtää asiakkaiden ostomotiiveja jotka
olivat johtaneet investointiin. Toisena päätavoitteena oli ymmärtää kuinka ostopäätös
kriteeristö sekä asiakaskokemukset voidaan muuntaa asiakasarvoehdotelmiksi.
Tutkimuksessa tehtiin 16 asiakashaastattelua joiden tarkoituksena oli selvittää
asiakkaan osto-organisaatiota sekä asiakkaan saamia hyötyjä laitteesta.
Tutkielma käy läpi organisaation ostokäyttäytymisen pääteoriat, sekä asiakasarvon
johtamisen teoriaa. Nykyisin käytetyt asiakasarvoehdotelmat testattiin sekä
kategorisoitiin eroavaisuuksiin sekä samankaltaisuuksiin asiakashaastattelujen
pohjalta. Haastattelut vahvistivat yrityksen olettamuksia asiakkaiden
ostokäyttäytymisestä sekä uusissa että modifioiduissa ostotilanteissa, sekä vahvisti
sisäisesti tehtyjen asiakasarvoehdotelmien paikkaansapitävyyttä. Työn päätuloksena
voidaan pitää sitä, että asiakasarvoehdotelmat voidaan nyt kohdistaa paremmin
asiakkaittain. Työn tuloksia voidaan käyttää arvopohjaisen myynnin kehittämisen
pohjana Actiw Oy:n tarpeisiin.
III
TABLE OF CONTENTS
ABSTRACT ........................................................................................................... I
TIIVISTELMÄ ..................................................................................................... II
TABLE OF CONTENTS ................................................................................... III
LIST OF FIGURES .............................................................................................. V
LIST OF TABLES .............................................................................................. VI
1 INTRODUCTION ......................................................................................... 1
1.1 Background of the study ........................................................................... 1
1.2 Objectives and limitations of the thesis .................................................... 2
1.3 Structure of the thesis ................................................................................ 3
2 ORGANIZATIONAL BUYING BEHAVIOR ............................................ 6
2.1 Robinson, Faris and Wind Model ............................................................. 6
2.1.1 BUYGRID - Model ............................................................................. 6
2.1.2 Buyclasses .......................................................................................... 8
2.2 Webster and Wind Model ....................................................................... 11
2.3 Sheth Model ............................................................................................ 17
2.4 Johnston and Lewin Model ..................................................................... 20
3 CUSTOMER VALUE PROPOSITIONS IN BUSINESS-TO-BUSINESS
CONTEXT ........................................................................................................... 23
3.1 Value Conceptualization ......................................................................... 24
3.2 Constructing Customer Value Propositions ............................................ 27
3.3 Proving Value Propositions .................................................................... 30
3.4 Value based sales process ....................................................................... 31
4 CASE: CONTAINER LOADING AUTOMATION ................................ 34
4.1 Case company presentation ..................................................................... 34
4.2 Actiw Oy Products .................................................................................. 35
IV
4.3 Standard cargo spaces ............................................................................. 38
4.4 Current loading methods and competition in automated loading ........... 39
4.5 Currently recognized value propositions of LoadPlate ........................... 43
5 RESEARCH METHODOLOGY ............................................................... 46
5.1 Case study as a research method ............................................................. 46
5.2 Data sources and content analysis ........................................................... 49
6 EMPIRICAL RESULTS ............................................................................. 51
6.1 Buying behavior in the case product ....................................................... 51
6.2 Buying decision criteria of the current customer base ............................ 54
6.3 Identified benefits of LoadPlate .............................................................. 55
6.3.1 Third party customers ...................................................................... 55
6.3.2 Producers ......................................................................................... 59
6.3.3 Points-of-difference and Points-of-parity ........................................ 62
6.4 Verification of customer value propositions ........................................... 66
7 CONCLUSIONS .......................................................................................... 69
7.1 Managerial implications .......................................................................... 70
7.1.1 Confirmed Value Propositions ........................................................ 73
7.1.2 Value based sales process ............................................................... 75
7.2 Limitations to the study .......................................................................... 77
8 REFERENCES ............................................................................................ 79
V
LIST OF FIGURES
Figure 1. A model of organizational buying behavior. .......................................... 12
Figure 2: Relevance of processes by role in buying center. .................................. 16
Figure 3. An integrative model of industrial buying behavior. ............................. 18
Figure 4: An integrated model of organizational buying behavior........................ 21
Figure 5: Customer value management processes ................................................. 23
Figure 6: Suggested process framework for a value-based sales process ............. 31
Figure 7. Actiw Oy Turnover and profit margin ................................................... 34
Figure 8. LoadPlate container loading unit ........................................................... 35
Figure 9: Cumulative LoadPlate sales 2001-2014 ................................................. 36
Figure 10: Actiw LoadMatic ................................................................................ 37
Figure 11: 40ft High cube container ...................................................................... 39
Figure 12: 40ft Open-top container ....................................................................... 39
Figure 13: Typical way of loading lumber into sea containers ............................. 41
Figure 14: Possible damages and lost space in lumber containerization ............... 41
Figure 15: Containerstuffers C-Loader loading lumber ....................................... 42
Figure 16: IBS Container-Filler loading project cargo .......................................... 43
Figure 17: Case study research process. ................................................................ 46
Figure 18: The value construction process ............................................................ 51
Figure 19: Process framework for a value-based sales process ............................ 70
Figure 20: Proposed roadmap for marketing improvement ................................... 72
Figure 21: Proposed Value Based Sales Process for LoadPlate ............................ 75
VI
LIST OF TABLES
Table 1: Thesis structure .......................................................................................... 4
Table 2: The BUYGRID Analytic Framework for Industrial Buying Situations. ... 7
Table 3: Distinguishing characteristics of Buying Situations. ................................ 7
Table 4: Building Blocks of a Successful Customer Value Proposition ............... 25
Table 5: Which Alternative Conveys Value to Customers?. ................................. 27
Table 6: Actiw Oy product portfolio ..................................................................... 38
Table 7: Container External and Internal Dimension according to ISO 668 and
ISO 1496-1 ............................................................................................................ 38
Table 8: Conducted interviews by customer segments.......................................... 48
Table 9: Conducted interviews .............................................................................. 50
Table 10: Points-of-Parities and Points-of-Difference for LoadPlate ................... 62
Table 11: Fill rate comparison ............................................................................... 67
Table 12: Cost of operations comparison .............................................................. 67
Table 13: Customer complaint cost comparison ................................................... 68
1
1 INTRODUCTION
1.1 Background of the study
From sales perspective, it is very important to understand how customer may
behave during the sales and purchasing process. As Finland is limited market for
specialized equipment, it is necessary to reach global markets efficiently. The
globalization of companies has set codes of conduct for the suppliers, which can
make it easier for the suppliers to design and conduct global marketing plans. This
can reduce the local business culture so that the purchasing process can be viewed
in more uniform way. The purchasing is becoming more centralized in global
companies, the purchases as well need to be justified as different investment are
competing against each other on a corporate level.
As the case product of this study has been on market since 2001, it is beneficial
for the company to understand the buying behavior of current customers, so that
the earlier delivery and customer experiences can be used as a tool for marketing.
Understanding the customer buying behavior gives also understanding for the
supplier to recognize the strengths and weaknesses of the current offering, and
how these may bring value to the existing and potential customers.
Although the majority of the research on organizational buying behavior has been
done in the 1970s, the core of the research is still valid. The globalization and
usage of internet for market research purposes has undermined the importance of
exhibitions and other marketing activities. This also has opened up the
competition of products and services from local to global markets. Actiw
LoadPlate is an semi-automated machine for container and trailer loading. The
markets of the product are global. In the current main markets, Finland and
Sweden, the brand has strong foothold and is seen as the market leader. Challenge
for the product, is that it is changing the decades old way of loading containers.
The challenge is that as the potential customers do not have experience in this way
of working, so it is beneficial to convey the current user experiences to new
2
markets.
1.2 Objectives and limitations of the thesis
The objective of this thesis is to study organizational buying behavior, in more
specific term, the buying decision criteria of current customers of the case
company. When buying decision criteria and the experienced benefits are mapped
by using interviews, the answers are used to figure out material for sales.
Purchasing is approached from the sales perspective. Simply put, to understand
how customers buy, and what are the factors which may affect the decision
making process.
Research questions
Company has started to improve the marketing over the internet during the year
2012. As one of key goals, is to deliver the knowledge of successful projects for
wider audiences. To reach this, it has been seen that by communicating current
customer stories, best results may be achieved. The product in question is
changing the industry standard way of working. The customer segments which are
using the solution can vary in multiple ways. Focus segments for the product has
been so far lumber, steel and port industries. These all can be divided into two sub
segments: product owners or third parties. This results as six different approaches
to customers and the possible benefits and risks. To gain understanding on how
different segments see the product the first research question is presented:
1) What has been the buying decision criteria of current customer base?
The company has been able to transform LoadPlate from project into delivery
during past years. This enables higher sales volumes without increasing
engineering and other company resources to individual unit delivery as much as in
the past. To match this improvement, marketing process must be developed as
well. To increase the marketing efficiency, marketing material is to be improved
3
as well. This brings us to the second research question:
2) How buying decision criteria and customer experiences can be turned into
customer value propositions?
1.3 Structure of the thesis
This section of the thesis details the structure and gives a brief overview of each
section of the thesis. The structure and the inputs and outputs of each section is
presented in Table 1.
The first chapter introduces the background of the study, states the research
questions, and details of the study. The objective is to give a brief overview of the
motives and the purpose of the study to the reader.
The second and third chapters include the literary review of the study. It first goes
through the original frameworks of organizational buying behavior, to broaden the
understanding on different actors regarding the purchasing process. The objective
is to gain understanding in what factors marketer can influence and to which
factors it must adapt. Following this is the chapter on customer value propositions,
focusing on customer value proposition design and value-based sales process. The
objective is to gain the required tools and methods to develop and quantify
currently used customer value propositions of case company.
Tabl
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The sixth chapter describes findings from the empirical data that was gathered. It
follows value customer value management process. It tests the currently used
customer value propositions of LoadPlate. The focus is to present the interview
findings so, that the results can be refined in later steps of customer value
management process.
The eighth and final chapter includes the conclusions that can be made from the
insights and short summary of relative insights of the literature. This chapter
contains the answers to research questions and the delimitations of the thesis.
6
2 ORGANIZATIONAL BUYING BEHAVIOR
Purpose of this chapter is to gain basic understanding on the theoretical
frameworks of organizational buying behavior. The information is being viewed
from the marketing and sales perspective, to understand how customer works and
may behave in different buying situations. The research has introduced three main
models for the organizational buying behavior. Robinson, Faris and Wind
introduced their model in 1967, Webster and Wind in 1972, and Sheth in 1973. In
1996 Johnston and Lewin introduced their model, which combines the above
models into one. The following chapter will give introduction to these models.
2.1 Robinson, Faris and Wind Model
Robinson, Faris and Wind introduced Buygrid and Buyclass models in 1967 in
their book Industrial Buying and Creative Marketing. The presented model was
first model introduced in the field of organizational buying behavior research. The
research in this study is focused on the New Task and Modified Rebuy situations.
2.1.1 BUYGRID - Model
This model is a conceptual framework which incorporates eight buy phases and
three Buyclasses. These Buyclasses are different types of buying situations which
differ in the commonness of the product type. This model was made for managers
to understand and predict the marketing task in hand and to select suitable
approach to the problem.
In Table 2 below, the Buyphases can be seen as buying process steps. These steps
can be happening simultaneously, but Robinson et al. (1967 p.13) noted that the
purchasing process usually follows the similar pattern. Almost all of the steps
from one to eight can be affected by the marketing and sales function of the
supplier.
7
Table 2: The BUYGRID Analytic Framework for Industrial Buying Situations. Adapted from Robinson etet al. al. (1967 p.14)
New
Task
Modified
Rebuy
Straight
Rebuy
BU
YP
HA
SE
S
1. Anticipation or Recognition of a
problem (need) and a General Solution
2. Determination of Characteristics and
Quantity of Needed Item
3. Description of Characteristics and
Quantity of Needed Item
4. Search for and Qualification of
Potential Sources
5. Acquisition and Analysis of Proposals
6. Evaluation of Proposals and Selection
of Supplier(s)
7. Selection of an Order Routine
8. Performance Feedback
Buying situations and Buyclasses
Table 3: Distinguishing characteristics of Buying Situations. (Adapted from Robinson et al. 1967 p.25)
TYPE OF BUYING SITUATION (Buyclass)
Newness of Problem
Information Requirements
Consideration of New Alternatives
New Task High Maximum Important
Modified Rebuy Medium Moderate Limited
Straight Rebuy Low Minimal None
8
Newness of problem refers to the situation in hand: does the company have
experience in similar situations in the past. This has direct effect on the
purchasing process. If the problem is new, then more effort is put in first steps of
the buying process. The situation must be assessed and determined what kind of
solution is needed, and also the search of the potential suppliers is broader. If the
buyclass is modified rebuy, company has experience of the problem and also
knowledge of the suppliers. Thus search takes less time and effort. If the buyclass
is straight rebuy, then no assessing or searching is needed, the order is placed to
the same company as previously.
Information requirements refer to the amount and type of information which the
buying center needs to gather before they are comfortable with the level of
knowledge regarding the problem and possible solutions. If the buying situation is
new task, then vast amounts of information is gathered and analyzed in each step
of the process. If the situation is modified rebuy, then existing information can be
used and possibly updated along the process. If the situation is straight rebuy, then
possibly the only information needed is the changes in the pricing of supplier.
Consideration of new alternatives relates to the first two situations. This is
affected by two situations; knowledge of available alternatives, and the ability to
distinct the problem and the last solution to similar problem. If the buyclass is
new task, then high amount of time and effort is put in search of suppliers. In
modified rebuy situations, new alternatives are considered depending on the
experience with the current supplier.
2.1.2 Buyclasses
New task
In new task buyclass the problem has not existed before. This leads to the lack of
experience in the buying center, thus there is no past information to rely upon. To
fill the gap in the knowledge, large amounts of information must be sought to find
9
a solution to the occurred problem, and to search for suppliers. The new task
situations are not happening frequently, thus it can be difficult to anticipate. But
an external stimulus, such as governmental regulations, can create possibility to
foresee the upcoming situations. Other situations can be introduction of new
product line, thus requiring new machinery, or possible injury resulting in
investment in new safety mechanisms. From marketing perspective, it would be
highly beneficial to foresee the upcoming problems beforehand and highlight this
to the buying organization. By achieving this, it is possible for the supplier to have
effect on the scope and solution of the purchase in its favor, thus increasing the
probability to become the supplier.
The purchasing process in the new task situations will be determined by the
environmental influences. The process first narrows the possible solutions to the
problem. If the solution is capital equipment or technologically complex, the
technical staff from both parties are involved during the process. Alongside the
narrowing down, qualification of sources is done. The final specifications are set
usually after the supplier is selected, since it may be rare that multiple suppliers
propose completely identical solutions. After the solution has been found, the
economic feasibility studies and evaluations are made. The new solution always
involves risk to the buying company and the decision makers. Using known
suppliers, the risk can be reduced. The buyers inside the buying center are
primarily either information channels or handling only commercial transactions.
They do not usually possess the technical knowledge to play important role in the
decision making process. However they should not be forgotten, since they may
play crucial role in the feasibility studies. For marketer, the best opportunity may
lay in making customized solutions to the customers’ problem, although it may
only be combination of standardized products and services.
Straight rebuy
Straight rebuy situation is a continuing or recurring buying, which is handled in
routine basis. The decision is made by purchasing department on each transaction.
10
In straight rebuy, the research of the suppliers has been done earlier, leaving a list
of preferred suppliers. No new suppliers are considered between purchases. Due
the recurring nature of the purchase, the purchasers are experienced with the
information related to the purchase. These kinds of purchases can be, for example,
work gloves, raw materials, and other goods consumed in the production. The
only things changing on straight rebuy situation can be the price, delivery times,
etc. This is the most common purchase type in industrial environment. If any
changes have not been made in the procurement process, or problems have not
been arisen from the last purchases, then little to no consideration is done to
change the supplier. From marketing perspective, it is important to be in the short
list of accepted suppliers. Otherwise it may be difficult to gain access to the list.
Access may be gained if the purchaser does bidding of the contract in regular
basis.
Modified rebuy
The modified rebuy can develop from new task or straight rebuy situations. If it
develops from new task, then the company has previous purchasing experience
from similar situation and amount of work in the search process is reduced. If it
develops from straight rebuy, the reason may be bidding process or dissatisfaction
with current suppliers. In modified rebuy also additional information is required
for the decision making. Examples can be changed specification, contract details,
etc. This buying situation can be triggered by outside events, such as emergency
or also the marketer may have made the effect by his/her actions. If a marketer is
not on the preferred suppliers list, he/she may try to change the situation to make
the straight rebuy situation into modified rebuy.
The characteristics of the situation differ from the previous ones in the customers’
view on the problem and the way in solving it, in more specific, whether or not
serious consideration can be given to alternative solutions and suppliers to resolve
the problem. In modified rebuy, the vendor offerings are given new evaluation.
However, it does not necessary mean that the purchaser will change the purchased
11
item or the supplier. The re-evaluation of supplier may arise from the possibility
of cost savings, improvements in the end product or production process, or better
service offerings from alternative suppliers.
Bunn (1993 p.47-49) proposed more fine detailed model based on the original
three Buyclasses. In the study, six Buyclasses were proposed; (1) Casual
Purchase, (2) Routine Low Priority, (3) Simple Modified Rebuy, (4) Judgmental
New Task, (5) Complex Modified Rebuy, and (6) Strategic New Task. These
Buyclasses have different weighing values in terms of available choices,
perceived power of the purchaser, importance to the buying organization, and
uncertainty on the buying activities. In marketing, the original three-group
classification can be more practical to use. (Moon and Tikoo 2002 p.297).
2.2 Webster and Wind Model
Webster published his first study on the subject in 1965. This study summarizes
the buying process into four segments: (1) problem recognition; (2) organizational
assignment of buying responsibility and authority; (3) search procedures for
identifying product offerings and for establishing selection criteria; and (4) choice
procedures for evaluating and selecting among alternatives (Webster 1965 p.371).
Webster and Wind presented their model of the OBB in 1972. This model takes
into consideration the environment, organization, buying center, the individual
participants and the buying decision process.
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for new kinds of products or services for their suppliers. Government can make
new investments more attractive by handing out incentives, or create
protectionism in the market by setting high import taxes. Labor unions can create
difficult surroundings for the companies. As an example Finnish Port Laborers
can halt the Finnish exports totally by going in a strike, thus leaving their mark to
the annual GDP. This can make the investments in automation justifiable, but the
attitude of labor unions can make the implementation of automation difficult for
the companies. Trade associations can offer one path to access new markets.
Professional groups are way to get peer information about new products on the
market and also spread either positive or negative WOM (word-of-mouth) about
products. Other business firms in the market can either set competitive
atmosphere, or make it more attractive to new suppliers to enter the market. Other
social institutions, for example Finpro in Finland which does promotion for
Finnish companies abroad, can work to make direct connections between
suppliers and end customers in new markets.
The customer organization consists of communication, authority, status of the
individuals, rewards, and work processes (Webster 1972a p.14-16). All have
importance in how well the work flow in organization is working. Organizational
technology sets the level of technology. If organization is in low cost country,
then degree of automation may be low. Vice versa if organization is in developed
countries, degree of automation may be higher. This sets the limitations to the
technology which is sensible to purchase. Organization structure sets boundaries
in terms of hierarchical levels, workflow and levels of approval. Organization
structure can also be seen as divisions, where divisions can work as DMU.
Organizational goals direct the purchasing decisions, i.ex. if company has made
decision to launch new product line, it will require new machinery to adapt to new
products. This creates buying tasks to the buying center. Organizational actors are
the employees of the company within all levels and responsibility areas. These
actors form the buying center. From marketing perspective, it is important to
know, how the message about possible problem is conveyed from the user level to
the knowledge of the management. Usually it can be the users who recognize the
14
possible bottlenecks or problems in the production process during their daily
work.
The buying center is the decision making unit for each purchase. According to
Webster and Wind (1972a p.17) the buying center consists of five distinctive
roles:
Users -Members of the organization who will use the purchased products and
services.
Buyers – Members of the organization who have the formal responsibility and
authority to award the contracts with the suppliers.
Influencers – Members of the organization who have possibility to influence the
decision making process either directly or indirectly by effecting the
decision criteria in alternative supplier evaluation or by providing
information.
Deciders – Members of the organization who have authority to choose between
alternative suppliers.
Gatekeepers – Members of the organization who can control the flow of
information and materials into the buying center.
From marketing perspective, it is important to be aware of each individual in the
buying center and their roles in the decision making process. This way more
directed marketing can be done according to each individuals needs and wants.
The behavior and interaction between the buying center members is also an
important aspect to be taken into consideration when trying to influence the target
organization. Individuals can also occupy multiple roles in the buying center, i.ex.
decider can also be the buyer, or user can be influencer. The members of the
buying center can also have task and non-task related criteria for the evaluation of
15
suppliers. Task related motives are relating to the buying problem in hand and
includes the organizational criteria and guidelines for the purchasing. Non-task
criteria can be divided to two sets: achievement motives and risk-reducing
motives. With achievement motives member is trying to achieve personal
advancement or recognition. With risk-reducing motives member is trying to
transfer part of the risk to other members of the organization, or to reduce the
uncertainty related to the purchase (Webster and Wind 1972a p.19). For
marketing, information gathering within the buying center can help to reduce the
risk-reducing motives. Katrichis (1998) studied the interaction within the buying
center members. It was found out, that less than a third of the communication was
with outside members of the buying center. This is divided presumably to
multiple vendors and other parties outside the organization, thus the possibility of
one vendor to have effect on the purchasing outcome, may be small (Katrichis
1998 p.144). In the study it was discovered also that the persons who work as
information exchangers, are usually the most influential person in the purchasing
process (Katrichis 1998 p.144).
The buying center size and communication can change, depending on the
purchase situation. Johnston and Bonoma (1981 p.153) propose in their study, that
in organizations which are highly formalized, the extensivity of the buying center
is higher as well. The importance and the complexity of the purchase also have
positive effect on the amount of people involved in the buying center. When the
purchase is novel, also the lateral communication within organization is higher.
When the capital cost of investment is higher, upper levels of management are
involved also in the process. For marketing perspective, the levels of management
hierarchy must be known to plan a successful communication strategy. If the
communication is not reaching high enough, then the effort on marketing may go
to waste (Johnston and Bonoma 1981 p.154). However, in a direct marketing or
sales situation, the management levels above the buying center members may be
left unknown in a personal level to the marketer. This sets limitations to the
practical workability of the theory.
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proc
The
whic
on t
proc
the
indiv
ure 2: Relev
20)
a study of T
erent phase
ter. These fi
deline which
understand t
vant. From
naling, com
nagement. T
omers pro
ording to t
eloped tow
cess.
individual
ch has effec
the buying
cess, and pe
buying cen
vidual or th
vance of pr
Töllner et. a
s of the pu
findings are
h groups sh
that all gro
m marketing
mmunication
This can b
cesses and
hat. This w
ards all bu
participan
ct on the ta
task. The
erceived rol
nter. If, fo
he technolog
rocesses by
al. (2011),
urchasing pr
important w
hould be stre
oups do no
g perspecti
n during t
be achieve
d integratin
way more
uying cente
nts of the b
ask and non
motivation
les all have
or example
gy being pu
y role in bu
research w
rocess to d
when plann
essed in wh
t see all pa
ive, it is i
the bidding
ed by havi
ng the sale
detailed c
r members
buying cen
n-task activi
n, cognitive
effect on t
, the purch
urchased is
uying center
was done to
different act
ning market
ich part of t
arts of the
mportant t
g phase, a
ing clear u
es process
ommunicati
during eac
ter have th
ities within
e structure,
he willingn
hasing situ
unknown,
r. (Töllner
map the re
tors within
ting messag
the sales pr
sales proc
to have eff
and the in
understandi
and com
tion strateg
ch phase o
heir own b
the buying
, personalit
ness of work
uation is ne
it is depend
16
et al. 2011
elevance of
the buying
ges. It gives
rocess. Also
ess equally
ffort in the
nter-process
ing of the
mmunication
gies can be
of the sales
background,
g center and
ty, learning
king within
ew for the
ding on the
6
f
g
s
o
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e
s
e
n
e
s
,
d
g
n
e
e
17
learning process of the individual, how much training is needed to make it
understandable to the members. The perceived roles can have effect on the
internal communication of the buying center. If high ranking manager sets the
discussion in a certain way, it may suffocate the discussion from more
experienced personnel who may have better insights of the problem which needs
to be solved by the solution.
The final decision is made in either group decision unit or by individual decision
making unit. By having the decision made in group, it reduces the risk of
individual buyer. In group, consensus needs to be made to reach the decision.
2.3 Sheth Model
The model introduced by Sheth divides the organizational buying behavior in
three aspects. First is the psychological aspect of the individuals involved. Second
is related to the conditions which precipitate the decision making between these
individuals. The third is the process of decision making and the possible conflict
resolution (Sheth 1973 p.52). Sheth has noted that three departments are most
common in the buying center: the buying personnel, quality control, and
manufacturing departments.
There are five aspects which have effect on the expectations of the buying center
members. The background of the individuals is affected by the education, role
orientation and the life style of the person. These can have positive, negative, or
neutral effect on the communication between the salesperson and the individual.
The information sources can either be result of active marketing of the supplier,
peer groups, or other sources. The level of active search will have direct effect on
how well new solutions to a problem are being sought. Perceptual distortion is a
result on how the individual perceives the marketing material and other
information and transforms it to a personal view. And finally the satisfaction with
previous purchases or brands can also have an effect on the expectations.
Ferguson et al. (2010) suggested that the negative experiences with the past
purc
lead
supp
after
poss
The
look
look
good
1973
phas
Figu(197
In t
alon
time
resu
chases may
d to spreadi
plier. The su
r delivery to
sibility to m
expectation
k for fast de
k for price
d quality, st
3 p.52). Th
ses of the pu
ure 3. An in73 p.51)
the buying
ngside the e
e pressure, p
ult from bre
not only lea
ing of the
upplier shou
o ensure tha
mend the situ
ns are diffe
elivery, inst
advantage
tandardizati
hese differe
urchasing p
ntegrative m
process, t
xpectations
perceived ri
eakdown in
ad to not se
negative W
uld ensure t
at the negat
uation in m
ering betwe
tallation, an
and low sh
ion of the p
entiating ex
process.
model of ind
two other
s of the indi
isk, and the
n the produ
lecting the
WOM to th
that sufficie
tive WOM
more favorab
een the diff
nd efficient
hipping cos
product, and
xpectations
dustrial buyi
factors are
ividuals. Th
e type of pur
uction mach
same suppli
hird parties
ent follow-u
is not sprea
ble situation
ferent depar
serviceabil
sts. And en
d pretesting
may cause
ing behavio
e affecting
he product-s
rchase. The
hinery or ot
ier again, bu
s, which ca
up services a
ad around, a
n towards th
rtments. Th
lity. Purcha
ngineers are
g of the prod
e conflicts i
or. Adapted
the decisi
specific fac
e time press
ther cause.
18
ut also may
an hurt the
are in place
and to have
he supplier.
he users are
asing agents
e expecting
duct (Sheth
in the later
from Sheth
on making
ctors can be
sure may be
It may be
8
y
e
e
e
.
e
s
g
h
r
h
g
e
e
e
19
presumed that if the purchase is under high time pressure, it will be made as
autonomous decision rather than joint decision to reduce the possible conflicts and
thus lost time. Perceived risk can be high if the purchase is once in a lifetime or
involves high investment costs. Then it can be presumed that it is made as a joint
decision process. The company-specific factors are organization orientation,
organization size and the degree of centralization. The orientation of the
organization can set tone, in which criteria are emphasized in the supplier
selection process. It can be as an example automation, safety, small carbon
footprint, ethicality, etc. Organization size and degree of centralization usually
walk hand-in-hand. In large corporations, the decision making is usually made as
joint decisions. And in small companies it can be autonomous decision.
The joint decision making process is conflict resolution of different views,
motives and expectations of different decision makers in the buying center. These
differences are result of the background, compensation, and also the expertise of
the individuals. The conflict resolution can be done as problem solving, where the
purchasing problem is discussed openly and task focused. In persuasion
individuals are trying to influence others to share their view in the matter.
Bargaining can be that the buying center members are trading favors, in exchange
to comply with others goals in the purchasing decision. Politicking can result as
backstabbing tactics, where the decisions are pushed through with non-task
motives. Farrell & Schroder (1996) studied the influence strategies within
organizational buying decisions. In the study, the implemented influence types
were persuasion, using outside information to generate support, advocating
personal preferences, and opposing disfavored alternatives (Farrell et al. 1996
p.299-300). These findings are aligned with the theory of Sheth; relational
persuasion was most common and effective method in reaching the consensus in
the purchasing decisions. The conflicting joint decision making process has been
questioned by the study of Thompson et al. (1998 p.703), proposes that the
conflicting buying centers are nowadays replaced with more process-driven
purchasing teams.
20
Supplier brand can also have direct effect on the supplier choice. Brown et al.
(2012 p.516) proposed that brand has positive effect on the supplier choice on low
to moderate importance purchases, and also when the buying organization is
small. In moderate to high importance purchases the brand relevance decreases. In
low to moderate importance purchases, the brand may give the purchaser feeling,
that it is safe choice. In small organizations the search process may limit only
known brands, which usually can be easier to know and find. Unknown brands
may suffer from lack in marketing budget, which makes the companies harder to
find. In important purchases, more time and effort is placed on the purchasing
process overall, which can result in more serious consideration of less known
brands.
For marketer, it is worthwhile to understand the backgrounds and the motives of
the buying center members. This way, the communication can be planned and it is
possible to have effect on the internal communication, by providing suitable
information for all group members. As consultation was found as effective
method to influence the decision making, it is important to fully understand the
needs and wants of the members. With this, it is easier to construct solution,
which covers the expected risks of the members. Wilson et al. (1991 p. 464)
proposed in their study, that if the supplier selection is done as group decision
process, it is important to gain support from multiple members of the buying
center in the case that if the selection is done by voting.
2.4 Johnston and Lewin Model
The study of Johnston and Lewin (1996), is combining the buying behavior
models of Robinson et.al (1967), Webster and Wind (1972a p.15), and Sheth
(1973 p.51). In addition to the original models, Johnston and Lewin have
introduced two new factors into the framework; Decision rules can be formal rules
and procedures of the organization. These are influenced by the organizational,
environmental, seller and purchaser characteristics (Johnston & Lewin 1996 p.4).
Role stress is more focused on individuals, rather than organization. Role stress is
influ
addi
(Joh
of u
the r
the p
purc
stres
The
purc
FiguJohn
In su
facto
diffe
uenced by
ition other
hnston & Le
uncertainty,
right proced
performanc
chases size
ss as the pe
purchase im
chase is not
ure 4: An innston & Lew
ummary, th
ors which
erent purcha
the charact
sources o
ewin 1996 p
or lack of
dure in purc
ce of the pu
and comple
erspectives a
mportance c
successful
ntegrated mwin (1996 p
he organizat
affect the
asing situat
teristics of
of stress ca
p.4). Role s
information
chasing, org
urchaser (Jo
exity of the
and motiva
can also hav
(Johnston &
model of orgp.3).
tional buyin
behavior
tions. As ma
the purcha
an be from
stress can h
n, regarding
ganizationa
ohnston &
buying inc
ations inside
ve direct ou
& Lewin 19
ganizationa
ng behavior
of individu
ajority of th
ase, group,
m environm
appen when
g the purch
al expectatio
Lewin 199
creases, this
e the buying
tcome in th
96 p.9-10).
l buying be
models ma
ual, group,
he steps of t
and partic
ment and o
n there is h
hase, such a
ons, or the
6 p.4-5). In
s has effect
g center dif
he purchaser
ehavior. Ad
ap the variou
, and orga
the purchas
21
ipant(s). In
organization
igh amount
as knowing
outcome of
n important
on the role
ffer greatly.
r role, if the
dapted from
us different
nization in
ing process
n
n
t
g
f
t
e
.
e
m
t
n
s
22
can be influenced by the marketer, it must be taken into consideration that what
characteristics are affecting each part of the purchasing process, and how to
clearly communicate with each buying center member. By understanding the
motives of both, organization and individual, marketer can have better persuasion
on individual level.
As the case organization of the study has organic sales process, it is important to
have understanding of customer organizations in general. By having base
understanding of organizational buying behavior, it can have impact when
designing account strategies.
One of ways to have influence in the organizational buying behavior, is to
communicate reference case stories and communicate the possible value gained
from changing the supplier or to communicate the customer gained value from
previous deliveries. The next chapter is explaining the customer value
propositions, how to construct customer value propositions and how to prove the
customer value propositions.
3
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23
ESS-TO-
derstanding
theoretical
ow.
erson et al.
ecent years,
2006. p.2).
are making
having facts
s to believe
derson et al.
of those few
o select one
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3
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24
3.1 Value Conceptualization
As the value propositions are directed to the management, which in current times
can be very strained in time, which requires the propositions to be easily
transferrable into monetary value. The value can be understood as what the
customer receives in exchange for the purchasing price. The benefits do not
change whether the price is adjusted up or down, but has effect on the willingness
to invest. When presenting the value of an offering to the customer, marketer must
remember that customer always can compare the offering to the next best
alternative. Anderson et al. (2007 p.25) list four different alternative types:
1) Competitors offering with comparable or alternative technology to fulfill
the customer’s requirements and preferences.
2) Customers make or buy decision.
3) The status quo (not doing anything).
4) Previous offering from the same supplier.
The value can be put into following equation (Anderson et al. (2007 p.25):
(Valuef – Pricef) > (Valuea – Pricea)
Where Valuef and Pricef are the values of the suppliers offering and Valuea and
Pricea are the values of next best offering. In this formula, the price is reduced
from the value, leaving the two comparable against one another.
Proposed market offering of the marketer may deliver benefits to the customer,
such as increased profits and revenue, and cost savings. But also the next best
alternative may bring these. The market offerings may alter in ways it conveys
value in technical, service, and economic ways. The ways to communicate own
offering can be done in three ways; points of parity, points of difference and
points of contention. The explanations for these can be found below in Table 4.
25
Table 4: Building Blocks of a Successful Customer Value Proposition (Anderson et al. 2006 p.6)
Element Explanation
Points of Parity Elements which have the same performance or
functionality as the next best alternative
Points of Difference Elements which are superior or inferior compared to
the next best alternative
Points of Contention Elements which the supplier and customer view the
performance of suppliers product compared to the
next best alternative differently.
Anderson et al. (2006, p.3) propose three different value proposition types; all
benefits, favorable points of difference, and resonating focus. Summary of the
types can be found below in Table 5. All benefits proposition lists all the possible
benefits what the certain solution may bring; with no regard are the benefits
relative to the customer. This proposition class is the easiest to construct, since it
does not require detailed knowledge of competition or customer case in hand
(Anderson et al. 2006 p.3). The drawback of the all benefits proposition is that if
the benefit has no value for the customer, it can undermine the justification.
Another pitfall in all benefits proposition is that there can be points of parity with
the next best alternative, which reduces the power of those few points of
difference in the propositions (Anderson et al. 2006 p.3).
Favorable points of difference propositions recognize that the customer has an
alternative in choosing the supplier. The suppliers must make their offerings
different from the alternative suppliers, which requires knowledge in the
competing offers or finding the best solution to the customers’ problem (Anderson
et al. 2006 p.4). Mere knowledge on the points of difference does not convey the
value to the customer directly; it must be demonstrated to the customer which
points bring the most value to him or her. Without knowledge on the customers’
requirements, suppliers have the potential to emphasize points of difference which
do not bring much value to the customer (Anderson et al. 2006 p.4). This can be a
26
pitfall for the value proposition.
The best practice for value propositions is the resonating focus (Anderson et al.
2006 p.4). With this proposition suppliers have deep understanding in the
customer business and challenges and thus can convey simple yet powerful
customer value propositions. Such value propositions can be provided by making
the offerings superior on few, selected elements which matter the most to the
target customers. This value of superior performance should be documented and
demonstrated to the customer in a way that delivers a sophisticated understanding
of the customers’ business and the priorities (Anderson et al. 2006 p.4). With
resonating focus value proposals, more is not better when compared to all benefits
value propositions. Resonating focus proposals focus on one or two points of
difference which, will also in the future, deliver greatest value to the customers.
This proposition type may also include points of parity when it is required by the
target customers even to consider the offerings or when supplier wants to correct
misconceptions of the customer (Anderson et al. 2006 p.4). One of most important
parts of effective value proposition construction can be that the points of parity
need to be stressed, so that the customer does not mistake those as points of
difference in favor of next best offering (Anderson et al. 2006 p.5).
27
Table 5: Which Alternative Conveys Value to Customers?. Adapted from Anderson et al. (2006) p.5
VALUE
PROPOSITION
ALL BENEFITS FAVORABLE
POINTS OF
DIFFERENCE
RESONATING
FOCUS
Consists of: All benefits customers
receive from a market
offering
All favorable points of
difference a market
offering has relative to
the next best alternative
The one or two points
of difference (and,
perhaps, a point of
parity) whose improve-
ment will deliver the
greatest value to the
customer for the
foreseeable future
Answers the
customer
questions
“Why should our firm
purchase your
offering?”
“Why should our firm
purchase your offering
instead of your
competitor’s?”
“What is most
worthwhile for our firm
to keep in mind about
your offering?”
Requires: Knowledge of own
market offering
Knowledge of own
market offering and
next best alternative
Knowledge of how
own market offering
delivers superior value
to customers compared
with next best
alternative
Has the potential
pitfall:
Benefit assertion Value presumption Requires customer
value research
3.2 Constructing Customer Value Propositions
For suppliers it is important to have the knowledge of own offerings standing
against the next best alternative. When listing the possible benefits which market
offering may bring to the customers, it should be done so that both, points of
difference and points of parities are looked in unbiased manner. Doing the listing,
requires that the workgroup, involving supplier individuals from various
functional areas, decides which of the benefits may bring value to certain
customer type and also decide what might be the next best alternative. After this
28
the benefits are evaluated against this alternative. During the listing, also the
elements which are in favor of the next best alternative should be included
(Anderson et al. 2007 p.43). This way supplier can more accurately assess the
differences of what the offers provide.
When the internal assessment of the product value offering is done, it is best to
have customer feedback on the factors which may bring value to the customer,
and in what extent. Anderson, Jain and Chintagunta (1993) proposed in their study
multiple methods to assess the value to the customers. This is the work process
where supplier organization estimates the monetary benefits what proposed
market offering may bring to the customer.
- Internal Engineering Assessment: In this method suppliers own engineers or
scientists conduct laboratory tests to provide estimate on the value.
- Field Value-in-Use Assessment: Comprehensive listings of benefit and cost
elements related to the suppliers offering versus next best offering is collected by
either supplier personnel or third party. This data collection requires customer
cooperation and participation to arrive into customer value estimations.
Assumptions are made to assign monetary values to compare the offerings.
- Indirect Survey Questions: With this method, current users are surveyed how
one or more changes in the currently used market offering have effect in the
company operations. Combining this with currently used information, estimates
can be made to create monetary terms for each individual change.
- Focus Group Value Assessment: This is a qualitative approach, where focus
group is presented potential offerings or concepts to gain insight what value these
might bring to the customer operations.
- Direct Survey Questions: Participants in this method are directly asked what
value presented market offering would bring to their organization.
29
- Conjoint Analysis: With this method the potential market offering judgments of
the research participants are statistically transformed into estimates of value. The
participants are asked by personal interviews or telephone-mail-telephone
research method to evaluate set of potential market offerings. Offerings are
viewed on separate cards in which attribute sets, which are being studied, are
listed. These lists have also the specific level of attribute, which each offering
possesses.
- Benchmarks: Survey participants are given the description of current industry
standard which acts as a benchmark. Participants are then asked what would be
acceptable increase or decrease in the price they would be willing to pay if some
of these attributes are changed.
- Compositional Approach: In this study method the value placed on selected
attributes is asked directly from the participants, while some of the attributes are
being reviewed with fixed value. When the assessment is completed with each of
the attributes, the values can be added to provide estimates of market offerings to
the participants company. Though the method is easy to use, the shortcoming is
that the given value of selected attributes may be greater than the value of the
offering as a whole. The method has three steps in perception gathering. First, the
participants indicate completely unacceptable attribute levels; if the attribute has
that level, it is not being considered. Second, participants designate the most and
least preferred attribute levels on a scale from 1-10. Third, the participants select
the most preferred attribute as a 10, from which the other attributes are being rated
from 1-10 in relation to it.
Value word equations help supplier to show both, points of parity and points of
contention, compared to the next best alternative (Anderson et al. 2006 p.6). A
value word equation can show in simple mathematical equations (i.ex. – and * )
how to understand the differences in the suppliers offering and the competitive
offering. These equations can be as simple as comparing power consumption and
30
the savings what can be gained from it, such as Rockwell Automation has done it
below (Anderson et al. 2007 p.54-55):
[kW spent x nr of operating hours per annum x $ per kWh x number of
years system solution in operation] Competitor solution - [kW spent x nr of
operating hours per annum x $ per kWh x number of years system solution
in operation] Rockwell automation solution
3.3 Proving Value Propositions
To make value propositions persuasive, suppliers must be able to prove and
document them (Anderson et al. 2007 p.59). By using value word equations, these
can be easily communicated, but those need to have factual data from customer
value research behind them. The goal of the research is to generate knowledge on
how the offering generates value or reduces costs for the customers in comparison
to the next best alternative. Secondary goal is to learn how this value can vary
between customers (Anderson et al. 2007 p.60). This helps in new customer
segmentation.
To have solid value research findings, customer cooperation is a necessity. To
gain the customer to share their time and resources, the supplier needs to convince
them. Possible gains for the customer can be research findings and cost-savings
recommendations (Anderson et al. 2007 p.62). The customers usually participate
in these studies for one (or several) of four basic reasons: an opportunity to
benchmark, earlier access to some new product or service, get meaningfully
lower price, or a low-cost resource to better understand their business (Anderson
et al. 2007 p.63). Data gathering is started by showing to the customers the
internally listed value elements, which include the points of parity and points of
difference. If disagreement arises from points of contention, those can work as
motivators for the customer to participate more deeply into the data gathering.
When discussing the points of difference and contention, members of the team
should discuss what kind of data the customer currently generates, or is able to
gene
al. 2
be v
gath
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anal
Valu
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2007 p.64).
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2006 p.8).
Value b
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mer has und
. 2011 pp.
the busines
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h point of d
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et al. 2007
n monetary t
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on et al. 20
histories. T
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sales pers
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This also h
ork for a va
r point of co
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t be obtaine
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the value w
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3.2 above, a
Other way
one after th
stomer has
the BUYG
Value base
not know th
sonnel, it i
their custom
d and thus
helps to ref
alue-based s
ontention (A
h supplier th
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31
Anderson et
hinks might
e difficult to
e customers
, it is then
ays. One is
ustomer can
ware which
ed on value
onstrate the
and include
Anderson et
l of buying
s best used,
the offering
nt to have
l. This way
ing can be
wn offering
ss (Adapted
t
t
o
s
n
s
n
h
e
e
e
t
g
,
g
e
y
e
g
d
32
When in cooperation with customer, goals are set mutually. This can help to
quantify the value for the offering. When quantifying the impact of the solution to
the customer, validation of the value analysis results should be validated with
multiple customer representatives. If the value propositions are made without
customer interaction, the customer may be skeptical in believing the numbers
behind the assumptions (Töytäri et al. 2011 p.500). Business case can be one
persuasive way to do value based selling. Anderson et al. (2007 p.66) propose five
points which should be included in the business case:
1) What actions are recommended based on the customer value research?
2) Resources needed to accomplish the recommended changes?
3) Specific concerns in the implementation?
4) Milestones what can be charted to follow the progress in the change?
5) Increased profitability if the business case would be approved?
In combination with the business case, suppliers can present solid customer
references. These can be used to provide evidence about experience in supplying
similar offerings, show market position, demonstrate the delivered value (Jalkala
& Salminen 2010 p.981), and reduce customer perceived risk (Salminen & Möller
2006 p.23). The reference cases can bring more leverage to the customer, if
previous case studies have been verified with the customers and also can show the
gains in monetary terms. Difficulty may lie in getting the acceptance from the
customer to show this information, since in some cases the implementation may
have brought the customer a competitive advantage. When validating the data of
the supplied offering, it can serve as screening criteria for new customers, thus
creating a link to the beginning of the sales process (see Figure 6 above).
By delivering value to customers, new kind of investments can be introduced to
customers. In summary, the value delivering has been one of key topics in
marketing research and managerial literature during past years. However as the
challenge for the suppliers is to communicate the value, more focus should be put
into showing the value in factual and monetary terms. One of key challenges may
33
be to get current customers to opt-in to the value documentation programs, but it
is also a possibility to tie closer relations with the current customers.
34
4 CASE: CONTAINER LOADING AUTOMATION
4.1 Case company presentation
Actiw Oy is small family owned enterprise located in Naarajärvi, Finland. The
company as its current form was founded in 2008, but the products have been in
market for three decades. Originally Actiw Oy was part of Naaraharju Oy, which
used to do steel fabrications such as bridges, steel building frames and automated
warehouses.
Actiw Oy has three separate business segments; Actiw Systems, Actiw LoadPlate
and Customer care. The Actiw Systems segment includes automated warehouse,
LoadMatic, LoadForm and other automated solutions. From managerial point-of-
view, LoadPlate is regarded more as machinery, but as the market is young for
automated container stuffing equipment, it can be still treated as solution.
Figure 7. Actiw Oy Turnover and profit margin
Actiw Oy can be defined as engineering company with great focus on project
deliveries. This discontinuity creates challenges in steady turnover. This is in
correlation with the D-U-C – framework (Tikkanen & Aspara 1998 p.49) which
2,8
11,6
3,3
6,6
4% 7% 1% 2%0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
2009 2010 2011 2012
Turnover (M€)
Profit margin %
desc
com
abbr
that
proj
havi
as e
mark
4.2
Acti
Load
com
of L
shee
Pric
Figu
cribes the k
mpany shoul
reviation co
two projec
ects set ch
ing multiple
engineering,
ket situation
Actiw O
iw LoadPla
dPlate is s
mplex cargo
LoadPlate un
ets and stee
e range for
ure 8. LoadP
key characte
ld have ste
omes from
cts are not
hallenges to
e projects ru
, manufactu
n globally d
Oy Produc
ate
emi-automa
into standar
nits are use
l pipes. Mo
LoadPlate i
Plate contai
eristics of p
eady workl
Discontinu
t alike. In
o maintain
unning sim
uring, cons
does not allo
cts
ated loadin
rd cargo spa
ed to handle
ore compreh
is from 155
iner loading
project mark
load. The D
uity, Unique
the case co
steady turn
multaneously
struction an
ow this situa
ng equipme
aces such a
e cargo suc
hensive uni
000 Euro t
g unit (Pictu
keting. To e
D-U-C – f
eness and C
ompany the
nover. This
y at differen
nd start-up.
ation.
ent designed
s sea contai
ch as sawn t
t list can be
to 230 000 E
ure courtesy
even out the
framework,
Complexity
e discontin
could be
nt project p
However
d to load
iners and tra
timber pack
e seen on A
Euro.
of Actiw O
35
ese figures,
where the
y, describes
nuity of the
avoided by
hases, such
the current
difficult or
ailers. Most
kages, steel
Appendix I.
Oy)
5
,
e
s
e
y
h
t
r
t
l
.
36
Figure 9: Cumulative LoadPlate sales 2001-2014
The customer types of LoadPlate can be divided into two user types: 3PL and
producer. 3PL is abbreviation from third party logistics, an service provider for
other companies. In this instance 3PL is providing container stuffing service for
material producers, such as sawmills. 3PL providers are common in Nordic
markets, as the access to containers can be limited, or the distance to transport the
goods from the factory to the port is more efficiently done with a truck or a train.
Producer is both producing and stuffing the containers in the factory premises.
This is feasible arrangement, if the production is close to port or availability of
containers is secured in other ways.
Actiw Systems
Actiw Systems is automated storing and retrieval system (ASRS). Actiw has
delivered dozens of these systems around the world from the late 1980s. This
system is highly applicable as manufacturing and logistics center warehousing
needs. The greatest benefit of Actiw storage is the high input / output rate. Typical
delivery value ranges from 3 to 6 million Euros, but can be up to 11 million as
well. Market focus on Actiw Systems is in fast moving consumer goods and
beverage industry. Example key accounts which Actiw has are Procter & Gamble
0
5
10
15
20
25
30
35
3PL
Producer
and
Acti
Acti
hand
Load
auto
annu
high
with
such
350
prod
Figu
Coca Cola.
iw LoadMa
iw LoadMa
dled goods
dMatic, the
omatically.
ual savings
her degree o
h product da
h as convey
000 Euros
duction volu
ure 10: Acti
atic
atic is furt
compared
e plastic pla
This gener
in machine
of automatio
amages. Lo
ors, to func
. Market fo
umes are hig
w LoadMat
ther develo
d to LoadP
ate has been
rates forkli
ery and per
on which lo
oadMatic un
ction proper
focus on Lo
gh and good
tic (Picture
pment from
late is, tha
n modified s
ift free loa
rsonnel cost
owers hand
nit requires
rly. This can
oadMatic i
ds are handl
source www
m LoadPlat
at the good
so, that load
ading docks
t. Additiona
dling steps w
more equip
n raise the p
s petrochem
led on stand
w.actiw.com
te. Differen
ds are on p
d forming c
s, which y
al benefits
which is in
pment than
project price
mical indus
dardized pal
m)
37
nce on the
pallets. On
can be done
yields great
come from
correlation
LoadPlate,
e to approx.
stry, where
llets.
7
e
n
e
t
m
n
,
.
e
38
Table 6: Actiw Oy product portfolio
Product Main market Price range (k€) Customer
industries
LoadPlate Scandinavia 170 – 230 Sawn timber,
Storage Global 2 500 – 12 000 FMCG, beverage
LoadMatic Global 350 - Petrochemical,
FMCG
4.3 Standard cargo spaces
Sea containers are thought to be one metric for international trade. Container
dimensions are set by ISO organization, and the dimensions are set in the ISO 668
standard. In international trade, the most common containers are 20ft dry
container, 40ft dry container, and the 40ft high cube container. More specialized
container types can be 20ft and 40ft open top containers and flat rack containers.
All container sizes follow the same external dimensions. Standard measurement is
TEU, which means Twenty feet Equivalent Unit. In Europe and in northern parts
of Africa 45ft container is also quite common, although it is considered as special
container in global markets.
Table 7: Container External and Internal Dimension according to ISO 668 and
ISO 1496-1
Length Width Height
Dimensions 20’
2 058 mm
40’ 12 192
mm
45’ 13 716
mm
8’ 2 438 mm
8’6’’ 2 591 mm
9’6’’ 2 896 mm
Minimum Internal Dimensions
5 867 mm
19’3”
11 998 mm
39’4⅜”
13 532 mm
44’4¾”
2 330 mm
7’7¾”
2 350 mm
7’8½”
2 655 mm
8’8 ⅛” Minimum Door Opening Dimensions
- -
- -
- -
2 286 mm 7’6”
2 261 mm 7’5”
2566 mm 8’5’’
For lumber loading the 40ft high cube container is the most common choice. With
this
be a
prof
good
the i
Figu
Figu
Ope
12)
hand
also
trans
4.4
As t
com
container s
also used f
files, insulat
ds must fit
internal dim
ure 11: 40ft
ure 12: 40ft
en-top conta
are most co
dle in eithe
possible t
sportation.
Curren
loading
the market
mpetition is s
size the theo
for vast ma
tion panels,
through the
mensions of
High cube
Open-top c
ainers (40ft
ommonly u
r terms of
to load ov
t loading
is still bein
scarce in thi
oretical max
ajority of o
, and such.
e container
the contain
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container (so
Open-top c
used for com
dimensions
ver high, s
g method
ng introduce
is field.
ximum fill
other goods
The challen
door openi
ner, as it can
Source: Hap
ource: Hapa
container (s
mplex cargo
s, weight, o
so that the
ds and c
ed to altern
of the cont
, such as s
nge with dry
ing which i
n be seen fro
pag-Lloyd 2
ag-Lloyd 20
source: Hap
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or shape. Op
roof is n
competiti
native conta
tainer is 70,
steel pipes,
y containers
is slightly s
om Table 7
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which are
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not closed
ion in au
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39
,2m³. It can
, aluminum
s is that the
maller than
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2015)Figure
difficult to
ntainers are
during the
utomated
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9
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,
40
The container loading has been almost the same from the invention of sea
containers as those are today known. International Standardization Organization
(ISO) set the first standard dimensions for the intermodal containers. Standard sea
containers have only opening at the door, which limits the handling of the goods.
For more complex cargo there are available open-top containers, of which the roof
is possible to open. The availability of the open-top containers is being reduced
annually due higher demand of containers and the fact that shipping lines, who
rent the containers for their customers, do not produce the open-top containers in
high volumes. This leads to the challenge to either pay high rents for the open-top
containers, or find alternative ways to load complex cargo. Complex cargo can be
described as loads which are difficult to load in conventional methods, because of
the length, weight, height, width, location of center-of-gravity, or the combination
of different size boxes to utilize the cargo space in most efficient way.
To handle complex cargo into standard sea containers, different kind of
attachments have been developed to the market. The challenge with these kinds of
attachments is that these do not have distance control over the goods. This may
lead either damage to goods or the container. To control the distance, it is required
that there is a worker inside the container, which is rather large health and safety
hazard.
For lumber containerization the loading method has been rather unchanged during
the years. It requires at least two large forklifts, one to lift the lumber bundles and
second to push the goods inside the container. In addition to the two forklift
drivers there may be additional footman to check that everything is in order. This
method is suitable when the lumber packages are all the same length, the height
has clearing from the container door opening and the packet width is restricted so
that there is large tolerance between the container walls and the packages. By
reducing this tolerance, higher loading volumes can be reached, which has direct
saving in container shipping costs.
Figuhttp
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Figu
ure 13: Ty://www.usa
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ure 14: Poss
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n Figure 14
nloading is
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ttom layer o
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finding the p
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are loaded w
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ave direct an
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n the receiv
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which can
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costs of ha
made the er
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41
rs (source:199.jpg)
ure 13, the
ed with red
rs under the
r plate it is
ntainer can
out quality.
Direct costs
andling the
rror.
:
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Com
Stan
parti
majo
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ctionality as
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ay the com
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are set by
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t any underf
omated load
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mpetition for
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aws about
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42
nd receiving
anage, since
h is mostly
railers. Sea
e containers
possible for
st identical
ges and can
2
g
e
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a
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r
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n
Figulogis
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unde
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The
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43
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acturer. It is
machine and
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not require
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eld benefits
one service
ansportation
containers,
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3
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44
- Easy load forming: When load forming is done outside the container,
products can be placed in free order.
- Worker safety: No workers are needed inside container during loading,
resulting in worker safety. Also when less people are involved in the
loading process, risk is reduced.
- Increased fill rate: As container is aligned and locked with LoadPlate, it
gives greater accuracy and control in the loading. This way producers can
optimize the product dimensions in a way that the container fill rate is
increased.
- Less product damages: Better control over the loading process is reducing
the product damages. LoadPlate also does not force the goods inside
container when comparing against normal working methods.
- Increased productivity: Productivity can be increased by reducing the
work steps in the container loading process. In most cases containers need
to be placed on the ground for loading, requiring either specialized
container trailer or container handling equipment. Other metrics to
evaluate productivity, can be how many containers per shift are being
loaded, or how many workers are needed to load each container.
- Reduced operating costs: Running and lifecycle costs of LoadPlate are
rather small. Since the unit is only consuming electricity for short periods
of time, part and fuel consumption is rather minimal.
- Decreased freight costs: Switching from special containers to standard
containers can reduce the overall supply chain cost. Also increased fill rate
can drop the shipping costs.
45
- Better supply chain control: In cases where producer is taking charge of
the container loading process, gives better control over the goods. Each
handling can be subject to product damages, if handlings can be reduced,
product quality can improve.
- Simple and easy to use, and maintain: Since the design of the LoadPlate is
rather simple, but has seen evolution through the years, lots of small
details have been fixed. Almost all of the components are off-the-shelf and
as standardized as possible. Key goal here has been that the company does
not need to have large warehouse for spare parts, and also if component
gets broken, customer is able to purchase identical part from local
suppliers, which leads to shorter down-time of the equipment.
The current value propositions can be used to match different buying center
members needs and wants. For example Logistics Managers can be interested to
use standard sea containers instead of open-top containers, and to increase fill
rates of the containers, as these have direct effect on total shipping costs.
Maintenance managers may appreciate the easy maintenance. Reliability and easy
load forming are thought to be key drivers for operational managers.
Current value propositions are used in most steps of the Buyphases. Some
arguments can be used in the beginning to gain the attention of potential customer
in general level. In later phases these can be calculated more case specific, on how
the propositions would change the current operations.
5
This
in th
seco
5.1
Case
char
dyna
used
polit
orga
Figu
Case
as
quan
vario
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whic
rese
RESEAR
s chapter de
his research
ond part des
Case stu
e study a
racteristics o
amics prese
d in the fie
tical scienc
anization, so
ure 17: Case
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archives, i
ntitative ev
ous aims: t
eration (Eis
ch theory c
arches is b
RCH MET
escribes the
h. The first
scribes the d
udy as a r
allows inv
of real-life
ent within
lds of soci
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ocial, politic
e study rese
a research m
interviews,
idence or b
to provide
senhardt, 19
an be devel
based on th
THODOL
research m
part describ
data sources
research m
vestigators
events (Yin
single setti
al sciences
w to incre
cal and rela
earch proces
method typi
questionn
both can be
description
989, p.534)
loped induc
he situation
LOGY
methodology
bes case stu
s which wer
method
to retain
n 2009 p.4)
ings (Eisen
, such as b
ease our k
ted phenom
ss. Adapted
cally combi
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e used. Cas
n, testing of
). The case
ctively. The
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udy as a res
re used in th
the holis
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hardt, 1989
business, ec
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mena (Yin, 2
from Yin, 2
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s can be u
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re set and
sources whi
search meth
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stic and
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9, p.534). I
conomics, p
of individu
2009, p.4)
2009, p.2
ollection me
ons. Quali
an be applie
theory, or n
used as the
is based on
is develop
46
ch are used
hod and the
meaningful
tanding the
It has been
psychology,
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ethods such
itative and
ed to reach
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ped by the
6
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47
recognized patterns or relationships among the variables within and across the
cases and the underlying theory (Eisenhardt et al. 2007, p.25). The theories are
created by using one or multiple cases to theoretical constructs, propositions or
mid-range theories from case-based, empirical evidence (Eisenhardt & Graebner,
2007, p.25). Case study is found to be useful to answer research question types
“how” and “why”, the kinds of questions which are used to explain events or
phenomenon which is studied.
The case study research framework of Yin (2009, p.2) is presented in Figure 17.
The process can be seen as linear but still has iterative characteristics to it since
the consequent steps can have feedback function to the next and previous steps of
the process. This way the researcher may alternate the approach of the research
questionnaire along the interview process is ongoing. This allows the feedback to
guide the depth to the interview in ways which might otherwise be unaddressed in
the beginning.
The research was planned by using the framework presented in Figure 17. The
questionnaire was based on previous studies concluded in the case company and
by the market knowledge which had been previously unverified and
undocumented. The background information of the LoadPlate was based on the
experiences of the researcher who has three year experience on the equipment in
technical, marketing, sales, and economical perspective.
The preparation phase involved in combining the existing value propositions
which had no documented proof, but had been internal speculation within the
company. Then the questionnaire was designed to test these speculations.
The interviews were conducted during business trips, which limited the available
time for interviews and the availability of interviewees. As part of the customers
have had the unit for over a decade, the original buying center members were
difficult reach due organizational changes, retirements and unfortunately due
death from illness. The complete unit list can be seen on Appendix I
48
Table 8: Conducted interviews by customer segments
Lumber Steel Other
Producer UPM Timber – FIN Stora Enso – AT Bergkvist-Insjön – SWE Karl Hedin - SWE
Sandvik Materials Technology – SWE,
FPC Tissue – Chile
3PL Sören Thyr – SWE ILP-Group – FIN
Gävle Stuveribolaget – SWE
Eskilstuna Kommun - SWE
The objective of the customer interviews was twofold: 1) first part of the
interview is to create market knowledge related to product and the changes in the
operating environment. This is to gain internal understanding within the case
company, since there is no documented evidence. And 2) build case studies of the
unit delivery for marketing purpose.
The interview questions were separated into five groups:
Background of the individual
Did the customer experience any risk in the implementation of new
working method?
Buying decision criteria of the company?
Had the LoadPlate brought them business or operational value?
Comments on the product and the co-operation between the companies.
Intent was to interview two operational areas within the customer organization; 1)
Managerial level and 2) operative level. Each operational area would have
specified questions to focus on their daily activities. From managerial level, such
as CEO, CFO and CMO, the goal was to find if LoadPlate has brought strategic
advantage to the business, how the company was leveraging LoadPlate in their
marketing and bidding purposes, what has been the actual return on investment
49
with the LoadPlate, amount of customer complaints before and after the
investment regarding product damages, cost of these complaints. From operative
level the key areas were operative planning and daily operations. From this level,
the focus was on how LoadPlate has effected planning, effects on safety and the
actual user experience; such as what is difficult, what is obsolete, and what could
be improved. By investigating the buying center members, it is possible to
understand how many managerial layers can be involved in the purchasing
process.
5.2 Data sources and content analysis
The empirical data was obtained through 13 interviews. In total 16 interviews
were conducted during the research process, and the first three interviews were
conducted as a pilot study with much wider questionnaire form. As the focus of
the study changed between the two interview sets, the results are not fully
comparable. However, some of the insights gained from the first three interviews
were used in the study as they state the value what the customer had gained.
The interviews were conducted in companies which are current LoadPlate
customers. The ownership time of the equipment is ranging between half a year to
12 years. During the interviews some of the questions were left unasked, since the
researcher had personal experience in the complete marketing and sales
knowledge from the first contact to the installation of the equipment. Interviews
were conducted during sales trips, which limited the maximum duration and the
amount of interviews.
50
Table 9: Conducted interviews
Title Company Country Interview
type
Duration
Commercial
manager
Forestal y Paperla
Concepcion
Chile In-person 14min
Tissue line manager Forestal y Paperla
Concepcion
Chile In-person 19min
General Manager Forestal y Paperla
Concepcion
Chile In-person 21min
Logistics developer Eskilstuna
Kommunfastighet
Sweden In-person 18min
Manager Sören Thyr Sweden In-person 38min
Foreman Gävle Stuveribolaget Sweden In-person 12min
Terminal manager Gävle Stuveribolaget Sweden In-person 20min
Logistics manager Bergkvist-Insjön Sweden In-person 35min
Logistics planner Bergkvist-Insjön Sweden In-person 13min
Logistics planner Karl Hedin Sågverk Sweden In-person 16min
Global coordination
manager
Sandvik Materials
Technology
Sweden In-person 38min
Inbound service
center manager
Sandvik Materials
Technology
Sweden In-person 30min
Foreman ILP-Group Finland In-person 27min
The interviews were recorded and later transcribed into text. Interviews were
divided by market segments and analyzed.
6
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51
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52
workers limit the output of the factory.
Variations in organizational characteristics were found in the interview. The size
of the company has been noted to have factor in the sales cycle time. The larger
the company, the more time it takes. The tasks and goals of the purchase had been
varying between the companies. In multiple cases however, the motivation for the
purchase had been to be the forerunner in the advance in technological solutions
The initial impression within Actiw had been that the customers may perceive risk
in implementing the solution. This was proven to be misconception. In all
interview companies, a reference visit and/or contact details of reference
customers were given to the buying center members. In most cases test loadings
had been done at the premises of existing customers. The buy tasks of the
customers have been either new buy situations or modified rebuys. In new buy
situations the investigation period usually takes longer time and involves more
people in the buying center, and in modified rebuy situations the buying center is
smaller and not as much investigation is required. This finding is in line with the
RFW theory of the buying center size and information requirements in new buy
versus modified rebuy situations. Importance of the purchase was found to be
altering in purchasing motives. Some customers in the Nordics are required to use
LoadPlate for the products of their customer. Related to this, some customers have
purchased the equipment to attract new customers by offering service different to
the competition. In some cases second unit was purchased to increase the
reliability of the supply chain, so that the peak loading hours can be divided to
two machines, or just to increase the work capacity to serve more customers.
The seller characteristics were found to be reliable through all interviews. The
price of the offering was mentioned to be relatively high in some interviews, but
investment was found reasonable if daily container volumes are stable. Product
and the quality of the equipment were appreciated by the owners. The service was
mentioned in couple of instances. Positive feedback was received from using
standard components and good operating manual which includes maintenance
53
information so that the customer is able to do the service maintenance themselves.
Negative feedback was received from Chile, where the long distance and the time
difference were seen as risk factors for service. Image of the product was seen in a
positive perspective. One Swedish customer mentioned the following:
“In the business every machine you use to load containers, you use the
name LoadPlate. But it’s not the same. We wanted to have the best machine.
And when I talk about the best, I talk about the one which has been sold the
most on this area.”
In larger companies, the buying center size was larger and cross functional (I.ex.
Sandvik Materials Technology), where purchasing, managers, operational level,
and different installation locations were part of the buying center. After the
buying center had made case study of the investment, it was getting accepted by
the board of directors. In smaller companies the purchasing has been very straight
forward. The buying center was involving in most cases upper management,
maintenance and operations planning. In case of modified rebuy situations, only
management was involved.
Information source which have been used in Scandinavian countries, was mostly
word-of-mouth. It has been seen that in more cases the producer of the product is
demanding the service from their suppliers. Other information sources mentioned
have been internet and video streaming services, such as Youtube. In new task
purchase situations, the amount of information needed is relatively high. This can
be explained by the newness of the technology when compared to forklift trucks.
The education of the customers has been seen to yield positive consequences and
necessity since the working method can in best cases change the working methods
greatly. The active search of the customers has been seen to raise the amount of
enquiries during the past years. Reason behind this can be either the
dissatisfaction of the current situation or the increased market knowledge that
solutions to automated loading exist.
54
Participant characteristics have had impact in sales situations. Personnel with
technical background have more interest in the technical aspects and the
functionality of the equipment, whereas customers with financial or managerial
background want to see the figures behind.
6.2 Buying decision criteria of the current customer base
From the interviews, several explanations for the reasons buying the LoadPlate
were discovered. In the lumber industry for the third party subcontractors, the
purchase motives have been to increase the capacity and to respond to customer
demand. In current markets, LoadPlate is recognized to be gentle loading method,
which does not damage the products. Some sawmills do not award the business to
subcontractors if they are using conventional container loading methods. This is
specially appreciated, when the products are going to Japanese markets, where the
product quality is highly appreciated. One customer recently expanded the
operations to new area, where LoadPlate has been creating market disturbance
inside the port. Second customer told the reason to be just to create market
disturbance in the area and also to use LoadPlate as a marketing asset towards
new customers.
For steel customers the purchase motivations were increasing the safety during the
containerization process and to secure the container capacity. The project involved
container loading and unloading solutions which were distributed globally in the
production units. This way the customer is able to use standard containers in the
global transportation, where they refine the goods at different factories. The
estimated ROI has been under two years.
The purchase behavior had been following almost identical in all cases. The initial
contact had been made after either colleague or peer had seen LoadPlate at
existing customer which had created an interest in the equipment. After this
customer had contacted Actiw and requested for budgetary price to understand the
scale of investment. Budgetary quotation is easy to provide as the equipment is
55
currently sold with cost-plus pricing policy. If the quotation had been feasible and
the customer had understood the possible gains from the investment, an internal
study was made within the customer organization, while Actiw has provided
numbers for energy consumption, running cost, and so on. If the investment has
been seen feasible for the customer, then next step has usually been reference visit
to existing customer. During the visit potential customers usually realize possible
changes what they would need to have and the quotation is adjusted to these
requests, as the vision of the investment is more concrete. If the customer
reference visit is successful, the probability in gaining the business is usually high.
6.3 Identified benefits of LoadPlate
The interviewed customer companies were divided into different customer
segments: third parties, customers who do container loading in behalf of producer,
and to producers, who containerize the goods themselves. As the interviews were
not directly focused to confirm the value propositions of LoadPlate, this part of
the study tries to find connections to the internal value assessments and develop it
further.
6.3.1 Third party customers
As third party producers can generate value in both directions of the supply chain,
to the customers who manufacture the products and to their customers’ customers.
Their position can be stronger or weaker against the manufacturer, depending on
the customer organizations focus points in their operations. In some cases
manufacturer has made strategic decision to outsource the container loading and
other logistics if it is not their core business. Second factor in Scandinavian
countries is the availability of empty containers in inland. For example sawmills
can be located in North Karelian region, from where the distance to the port is
very long and it is not economically feasible to transport empty containers so far
from the port. Also if the producer is small and the export volumes are volatile,
56
meaning that there is no stable workload to stuff containers, it may not be feasible
to invest in such equipment at the factory, whereas third party operators can
combine multiple small streams to justify the investment. Some value
propositions have no impact on the third party suppliers business. For example
switching from special containers to standard containers does not bring any value
or savings for the subcontractor, since they are not responsible in renting the
containers, and thus do not pay the additional cost of specialized containers.
Forestry products
In total three interviews were conducted on companies which do subcontracted
containerization for lumber products. Identified value factors for this segment
were following:
- Less product damages: The product damages are possible to inspect only
after the container has reached the destination for discharging. With
LoadPlate it is relatively see if the product is going to be damaged, if the
packages do not fit through the guiding rollers on the side of the
LoadPlate, it will not fit through the container door opening. Though
lumber package dimensions have been designed according to the container
dimensions, the boards may have shifted during the road or rail
transportation. The runners, boards that go sideways on the bottom of the
package, may also be damaged. This is more common during winter
conditions, when minus temperature can cause weakening of the plastic
strapping. For more expensive product types such as glulam, a glue
laminated timber, the producers are demanding LoadPlate for the loading.
Normal forklift pushing is not acceptable method for that product group.
“I think it (customer reclamations) is less than 1% that are
disappointed. But often it is not with the LoadPlate. Only when we
have pushed it in on customer request.”
57
- Better space utilization: Sawmills who use third party which has
LoadPlate, have been able to design the loads so that all the space inside
the container is utilized. In some instances sawmills do not recognize that
the door opening dimension has smaller dimensions than the internal
dimensions of the container.
“The opening of the container is the maximum height is the limiting
factor. 11,94 and 2,32 is the best dimension. But they try to do the
packages by the container.”
- Easy load forming: The LoadPlate has given the customers to make more
difficult loadings. They still use conventional methods, pushing the timber
in with forklifts, but only in cases where there is tolerance in all directions.
- Improved worker safety: Customers have been able to reduce the
workforce in the containerization. As there are no workers walking
alongside the heavy machinery, it reduces the risk of injuries.
“Yes, there are no people running around. We haven't had any
accidents in the area.”
- Increased productivity: The customer has been able to change the
container loading procedure so, that single employee is in charge of
loading the container.
Steel products
- Easy load forming: With steel products, the load forming procedure before
was to handle one sheet at a time with big forklift. The new warehouse
where LoadPlate is located, was designed so, that the steel plates are being
handled with overhead crane equipped with steel plate actuator.
58
“Before we take one steel package at a time, because for 12m you
can have only one 5tn steel plate at a time. So it was very time
consuming at a time.”
- Worker safety: Switching from forklift loading to loading with LoadPlate
had made impact in worker safety. The workers do not need to be inside
container to unhook chains or steel wires which are typically used to lift
the steel plates.
“Before when you used to go inside the container with the 12m long
steel. If you sit inside the forklift and you move the steering wheel
only a little bit, 1cm, you can hurt someone inside the container.”
- Less product damages: Using equipment, which is specially designed for
the handling of certain products, always reduces the risk of damages.
Though steel can be visualized as a product which is not easy to damage,
the packaging however can be very delicate.
“Before with the forklift, we put wires, some chains inside the
container and it always cuts the package a little bit. So now it is a
lot better.”
- Increased productivity: The customers have been able to reduce the
workforce required in the container loading operations and also to reduce
the loading time as mentioned above.
“The way we do here, we only need only two men to load plates into
container. If we wouldn't have the machine, then I think we would
need many more people.”
- Reduced operating costs: Operating costs have been reduced at the
customers after the implementation as fewer workers are needed for the
59
operations.
6.3.2 Producers
In the study, total of eight interviews were conducted with producers, of which six
at forestry product manufacturers and two at steel mill. Three of the forestry
product interviews were conducted during the pilot study phase.
Forestry products
- Easy load forming: When the solution has been applied at the mills, the
customers have been able to form different sizes of packages in containers.
With typical forklift loading method, it would be possible to load only four
packages at a time (see Figure 13 above), which are identical in length.
“The regular working method sets boundaries to effective loading. It
is effective to load only four stacks in one container. With LoadPlate
it is possible to load ten stacks of different sizes in one container.”
- Worker safety: Reducing the workers involved in the loading process has
increased the safety also at sawmills.
- Increased fill rate: Sawmills have been able to utilize the filling rates of
the containers. One customer has possibility to compare the container fill
rates, since they fill containers at a port which does not have LoadPlate,
and also directly at sawmill. In comparison, at the sawmill they could load
0% to 1,6% more lumber in container, depending on the destination.
- Less product damages: When the lumber is loaded directly at the sawmill,
multiple handling steps are being reduced from the overall supply chain.
Since each of the handling is subject to damage the goods,
60
- Increased productivity: One customer was able to transfer all the container
loadings from the port to the sawmill. Customer has been able to
streamline the warehousing and the shipping process so, that the
warehouse space is rather minimal and can carry approximately one week
worth of production.
- Reduced operating costs: Customers who have applied the unit at
sawmill, have been able to reduce operating costs by removing one forklift
and the forklift driver to other duties. In these instances the overall costs
do not change, but reduces the costs on the container loading and increases
the efficiency in other parts of the sawmill.
“We have reduced the amount of people and forklifts. The payoff
was maximum 6 months.”
“It was a good purchase, break-even was about 2500 containers.”
- Decreased freight costs: Increased fill rate can have direct effect in the
freight costs. Freight costs have also been reduced when the operations
have been transferred from the ports back to the sawmill.
- Better supply chain control: When handling the goods, and completing all
paperwork at the sawmill has given better control over the logistics.
“The producer can be more confident about preserving the quality
of the goods. On-site loading is always the best possibility, because
if it is loaded at the port, the producer cannot be certain about the
quality of the goods when it leaves to customers.”
61
Steel products
- Standardized cargo space: Customer has been able to switch from open-
top containers to standardized containers. Savings per container can be up
to 3000 USD.
- Worker safety: Previously, when customer used open-top containers, the
recognized risks were that when the container roof is opened, there is a
risk of falling down. Second safety perspective is that when lowering the
steel bundles inside the container, it required personnel to stay inside to
unlock the lifting equipment from the goods.
- Reduced operating costs: Operating cost savings are planned by reducing
the amount of operators involving the investment.
- Decreased freight costs: Freight costs have drastically been reduced after
the application of LoadPlate at the factory. The cost savings have been
gained from multiple points: 1) changing container type, 2) no additional
truck traffic between port and factory, and 3) no extra cost of
containerization done by subcontractors.
- Better supply chain control: With the steel manufacturer, the benefit has
been to secure the availability of the containers, by changing the container
type.
- Simple and easy to use, and maintain: In cases where LoadPlate is
positioned as key component in the supply chain, customers appreciate the
standardization of the unit from component perspective. Also the
documentation was proven to be valued, since it includes complete part
lists and maintenance instructions so that the customer is able to do the
maintenance internally.
62
6.3.3 Points-of-difference and Points-of-parity
As the container loading equipment can be thought as new invention in the
market, rarely it is seen that there is competitive situation in the buying process.
Actiw has history knowledge of several different self-made container loaders. It
has been seen that in current times makeshift solutions are getting less usual as
there are market offerings available. Most beneficial for Actiw, is to map points of
difference and points of parity against the conventional loading method. This can
advance the marketing efforts in cases when company is trying to access new
markets, and it is necessary to educate the customer in the topic. The proposed
setting between points-of-parities and points-of-difference can be seen below in
Table 10.
Table 10: Points-of-Parities and Points-of-Difference for LoadPlate
Customer
segment: Sta
ndar
dize
d ca
rgo
spac
e
Eas
y lo
ad f
orm
ing
Wor
ker
safe
ty
Incr
ease
d fi
ll r
ate
Les
s pr
oduc
t dam
ages
Incr
ease
d pr
oduc
tivi
ty
Red
uced
ope
rati
ng c
osts
Dec
reas
ed f
reig
ht c
osts
Bet
ter
supp
ly c
hain
con
trol
Sim
ple
and
easy
to u
se, a
nd
mai
ntai
n
3PL – Forest products
P P&D D D P&D P D P P P
3PL – Steel products
P D D P D D D P P D
Producer – Forest products
P D D D D D D D D P
Producer – Steel products
D D D P D D D D D D
D = Point-of-Difference P = Point-of-Parity
63
The value propositions for the forestry sector are divided partially by market
experience, and partly by the answers gained from the interviews. In comparison
to the initial steps of the value proposition process of Anderson et al. (see Figure
5), there is some partial knowledge inside the company where these are based on.
When looking from third party subcontractor perspective, Points-of-Parities can
be noted on standardized cargo spaces, easy load forming, less product damages,
increased productivity, better supply chain control, decreased freight cost, and the
simplicity to use.
The standardized cargo space does not change in lumber loading, whether the
container is stuffed with conventional methods or with specialized machinery.
The standard container which is used is 40 foot long container due the high
availability. If increased productivity is seen as containers per shift, then this can
be point-of-difference in favor of conventional method. If the product dimensions
are so, that there is large tolerance between the goods and the wall, then
conventional method is faster. But if inspecting from operational cost perspective,
then LoadPlate can be cheaper option due fewer workers are involved in the
loading. Supply chain control is not seen as important factor for the 3PL
subcontractors since the producers are handling the steps, and subcontractor only
provides the service for the containerization. Decrease in freight cost is not
important factor for subcontractors, since the producer carries the cost of the
transportation. Simplicity to use and maintain can be seen as points-of-parity,
since the equipment is not more complicated to maintain than forklifts. Easy load
forming and product damages can be seen as both, points-of-difference and
points-of-parities. Points-of-parities in a case where the products are within
standard dimensions, so that it is easy and safe to load with forklifts.
Points-of-difference in cases where the producer can fit different lengths of
packages into one container and there is less free space inside the container. Other
points-of-difference are: worker safety, increased fill rate, and reduced operating
64
costs. Worker safety improves on the notion that fewer workers are involved in
the loading operations. The same argument fits for reduced operating costs, in
addition second forklift and the driver can be removed from the loading process.
Increased fill rate can prove benefits to the subcontractor if the pricing is cubic
based, meaning that if the subcontractor can fit more products in one container, he
or she gains more profit from the same work.
For steel loading subcontractors the recognized points-of-difference are: easy load
forming, worker safety, less product damages, increased productivity, reduced
operating costs, and simplicity to use. Easy load forming and increased
productivity go together. The less time the load forming takes, the better the
productivity. Worker safety is improved when no lifting boom apparatus are
needed for loading, no personnel need to be inside the container to unhook the
lifting chains, and less people are involved in the loading. Reduction of people has
also direct cost effect on the operating costs. Typically it can be assumed, that
there are at least three workers involved in steel container loading: one operating
forklift or overhead crane, and two lashing and unlashing the steel chains or wires.
Product damages are reduced when no steel chains or wires are required for the
lifting. Points-of-Parity are standardized cargo space, increased fill rate, decreased
freight costs, and better supply chain control. Changing the container type does
not have impact for the subcontractor profitability or operations, and thus cannot
profit from the decreased freight costs. Fill rate is non-important factor for steel
loading, since the weight limits are exceeded before the volume of the container is
full. Supply chain control has same justification as with forest product
subcontractors.
For forest product producers the change in the overall supply chain can have
larger impact. The points-of-difference for producers are: easy load forming,
worker safety, increased fill rate, less product damages, increased productivity,
reduced operating costs, decreased freight costs, and better supply chain control.
Easy load forming allows flexibility for the operations, the loads can be done
before the container arrives to the sawmill for loading. This also allows freedom
65
in load planning which again goes hand in hand with increased fill rates and
decreased freight costs. Benefits in operating cost perspective and worker safety
are the same as with the subcontractors. In addition to the operating cost
proposition is the fact that the producer now does not need to pay for the
containerization service. Supply chain control can be improved as the supplier has
control over the goods over the whole process. This way producer can guarantee
the quality of the goods when it leaves from the sawmill. Points-of-parity to the
conventional working method are the standardized cargo space and easy usability.
For these the reasons are similar as in the third party subcontractor situation.
For steel producers the assumed benefits gained from points-of-difference are as
following. Changing to standard cargo space, the savings in freight costs can have
greater impact in savings, than any other factor. One container can save up to
3000USD in shipping expenses. This effects also the overall freight cost change,
because the producer does not need to pay for the container loading service. Easy
load forming can give benefits comparing to open-top container loading and
different forklift applications. Worker safety is improved in situations when
container type is changed from open-top to dry containers, as the workers do not
need to climb ladders to open and close the roof tarpaulin, and no people need to
be inside the container during the loading process. Product damages are reduced
as the products can be handled safely outside the container, without chains or steel
wires, and the loading process itself is controlled. Productivity increase can be
measured in two ways, containers loaded per shift, or less workers involved per
container. In steel loading securing of the cargo is very time consuming, which
sets restrictions in the container loading process, if the loading and securing is
done in same place. Other possibility is to remove the loaded container to securing
station, where workers fasten the cargo so that it does not move during the sea
transportation. Operation costs can be reduced by having less people in the
loading process. Supply chain is better controlled when the loading is happening
inside the own factory premises. The quality control over the goods can be
handled easier and the production equipment involved in the loading process is
specially selected for that product type. Simple and easy operations are also
66
differing factor when comparing to open-top loading. With LoadPlate several
steps of the process can be reduced, for example, opening and closing the
tarpaulin. Only recognized point of difference is the better space utilization inside
container; as mentioned earlier, as steel is heavier material than lumber, the
maximum payload is reached before the volume of the container is filled.
6.4 Verification of customer value propositions
For the verification on customer value propositions, an example case is
constructed. Though it would be seem natural to use steel producer case, as the
points-of-differences are greater than with other customer segments, an case of
lumber loading is used since the marketing focus of the company is currently for
these markets. Numbers used are rough industry averages. The instances are
compared by each value proposition separately. Only value propositions, which
are quantifiable in a simple manner, are being demonstrated.
EXAMPLE CASE – SAWMILL CONTAINERIZATION:
A sawmill which is located 250km away from the port, is considering to move the
containerization operations to the mill. The sawmill can produce 400 000m³ of
lumber and 85% is going to export in 40ft high cube containers. Typical fill rate at
the port is approximately 51m³ in one container. Container shipping cost is 1500€.
The mill is working in two shifts, but container loading in only one 10h shift.
The fill rate can have direct effect on the shipping costs. By using industry
verified numbers on the fill rate increase, we can propose to potential savings seen
on Table 11.
67
Table 11: Fill rate comparison
Current
operations
Planned
operations
Change
Annual volume
340 000m³
340 000m³
0%
Fill rate 51 m³ 51,8 m³ +1,6%
Required containers 6 666 pcs 6 563 pcs - 103 pcs
Container rent
1500 € 1500 € 0%
Total: 9 999 000€ 9 844 500€ 154 500€
Table 12: Cost of operations comparison
Current
operations
Planned
operations
Change
Containers per year 6666 pcs 6563 pcs -1,8%
Containers per day 26,5 pcs 26 pcs
Workdays per year 252 d 252 d
Hours per day 10 h 10 h
Required forklifts 2 pcs 1 pcs - 50%
Maintenance cost 3€ /h 3€ /h + 2,6€ /h - 7%
Tyres 5,2 € /h 5,2 € /h - 50%
Fuel / electricity 7€ /h 7€ /h + 1€ /h - 43%
Worker cost / a 50 000€ 50 000€
Required workers 3 1 - 66 %
Total: 226 608€ 97 376€ 129 232€
Table 12 the operational costs are compared. The numbers stated are per forklift
truck or per LoadPlate. In the comparison the scenario is so that the producer
needs to containerize same volume of products. Majority of the savings are gained
from reduced need of workforce. The typical amount of needed workers per
68
container is three, two forklift drivers and one footman. The difference in running
costs were 38% lower.
Customer complaint costs can include the price reduction of the damaged
products. Also indirect costs for handling of the complaint should be taken into
account. In the example, cost of complaint is assumed to be 1% of the value of the
goods inside container. Comparison of the situations can be seen on Table 13
below.
Table 13: Customer complaint cost comparison
Current
operations
Planned
operations
Change
Required containers 6 666 pcs 6 563 pcs -1,8%
Complaint ratio 0,5% 0,1% - 80%
Cost per complaint 2500 € 2500 €
Total: 83 325€ 16 407€ 66 918€
69
7 CONCLUSIONS
In this thesis research was done to build understanding on current customer
buying behavior and motives. The research was done by first studying the main
researches on organizational buying behavior and customer value proposition
design. After this interviews were conducted to investigate the buying motives
and buying center size and members.
The organizational buying behavior studies the variables and complicated
relationships concerned individual buying task (Sheth 1973 p.51). The
organizational buying situations can be divided into three categories; new task,
modified rebuy, and straight rebuy (Robinson, et al. 1967 p. 28). The study
focused on first two, as the unit sales of the case company are modified according
to each purchase. The newness of the problem, information needs and
consideration of alternatives always require more effort in the new task buying
situations (Robinson, et al. 1967 p.25). As the purpose of the study was to
understand the buying motives and buying center compositions of current
customers, the study failed to completely answer to the first research question:
What has been the buying decision criteria of current customer base? Reason for
this was that since the interviews were conducted in person during sales trips, the
available time and possible persons to interview were limited. This could have
been avoided by making the interviews over the phone. Since the main function of
the researcher is to do sales function in the company, knowing current customers
personally is an advantage.
Customer value propositions are reasons why customer should consider in
changing the supplier (Anderson et al. 2010). The customer value propositions
need to be verified with customers and need to have to be easy to transform into
monetary terms. Effective customer value propositions take into consideration the
own offering and also the next best alternative (Anderson et al. 2006 p.5). The
best practice in customer value propositions is to have resonating focus with the
customer business. This requires deep understanding in the customer business and
can
can
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f the unit ar
70
red solution
deepen the
customer is
. By using
criteria and
et al. 2011
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purchasing
This means
g to current
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ase specific
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,
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71
by each customer. These customer case stories should include the before and after
situation of the customer and also have the scenarios presented in monetary terms.
This would help the company to understand the possible benefits what the
customer has gained and also to create more accurate ROI calculator, which is
based on actual figures, instead of theoretical ones. The investigation phase would
also need to be done in a standardized form, so the customer cases could be
comparable against each other.
As the purchasing process from the customer perspective has been more or less
straight forward and the customers need more education on the topic, it is
recommended that more effort is put understanding the customer operations after
the implementation. This information would help Actiw to create stories how the
equipment changes the operating environment, which again would help to create
realistic scenarios to potential customers. These stories should include clear
notion on the before and after situations, how the business and operations has
changed after the investment. For this, customer management program should be
implemented. This way regular infeed of information can be gathered from the
markets, but also from possible problems. Quantitative and qualitative results
should be included in the customer reference stories to demonstrate the value.
Great importance should be focused on the first year after the implementation, so
that the learning curve of the future customers can be reduced and the positive
experiences can be transferred to customers while negative experiences can be
avoided with training. By taking better care of the customers, it can improve the
satisfaction of the customers. As customers noted in the interviews, peers and
colleagues have been good and trusted information sources. By encouraging
current customers to do positive word-of-mouth, it could have great impact on the
overall sales of the LoadPlate.
The framework of Anderson et.al seen on Figure 5, should be taken into practice
and to be used alongside the marketing planning process. The customer value
propositions listed above should be tested with current customers to gain feedback
and proposed metrics to evaluate the propositions.
Figu
The
the
inter
own
cust
mark
inve
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As a
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ell less tha
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This way, di
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ess. The co
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f informatio
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vations and
Reference Marketing
rovement
improve th
rther as it
high with t
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hat in man
ars. This s
s it can be
as there are
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ommunicatio
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on. In the be
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ormation can
goals betw
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was confirm
the current
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value, using
ny cases th
should enc
directly tra
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of the give
nterviewed
high focus
on channels
ng practice
eginning it i
d the positi
n be spread
ween the me
olution arketing
72
marketing in
med in the
equipment
osed in the
g reference
e return of
ourage the
ansferred to
l researches
en values is
companies
should be
s should be
es are not
is important
ions of the
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embers can
2
n
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t
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e
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s
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e
e
t
t
e
e
n
73
vary. The experience with similar working methods should also be investigated
with new customers, as the information requirements and such are much greater
and the related uncertainty when the customer is unexperienced with this kind of
purchases.
7.1.1 Confirmed Value Propositions
The study has gathered up the current customer value propositions and divided
them to points-of-parities and points-of-differences. These can be used as a base
for customer value management program and further development of value
marketing. To continue the sales process development, it is recommended that
company applies the customer value management process of Anderson et.al
(2007).
The interviews did succeed to confirm all of the customer value propositions of
which the company is already using. This information works as an insight for the
company, as now the propositions can be pinpointed to specific customer and
product types. By this it is possible to promote the resonating focus on the value
propositions by customer type instead of all benefits value propositions.
The value propositions are following:
- Standardized cargo space: Using standard cargo spaces can yield benefits
to the customers in several ways. Customer is not dedicated to one service
provider and thus can freely do competitive bidding on the transportation
service providers. Customer does not need to use specialized containers,
enjoying thus direct savings from transportation cost and better availability
of containers. No fixed cost has to be put into specialized containers or
trailers.
- Easy load forming: When load forming is done outside the container,
products can be placed in free order.
74
- Worker safety: No workers are needed inside container during loading,
resulting in worker safety. Also when less people are involved in the
loading process, risk is reduced.
- Increased fill rate: As container is aligned and locked with LoadPlate, it
gives greater accuracy and control in the loading. This way producer can
optimize the product dimensions so that the container fill rate is increased.
- Less product damages: Better control over the loading process is reducing
the product damages. LoadPlate also does not force the goods inside
container when comparing against normal working methods.
- Increased productivity: Productivity can be increased by reducing the
work steps in the container loading process. In most cases containers need
to be placed on the ground for loading, requiring either specialized
container trailer or container handling equipment. Other metrics to
evaluate productivity can be how many containers per shift are being
loaded, or how many workers are needed to load each container.
- Reduced operating costs: Running and lifecycle costs of LoadPlate are
rather small. Since the unit is only consuming electricity for short periods
of time, part and fuel consumption is rather minimal.
- Decreased freight costs: Switching from special containers to standard
containers can reduce the overall supply chain cost. Also increased fill rate
can drop the shipping costs.
- Better supply chain control: In cases where producer is taking charge of
the container loading process, gives better control over the goods. Each
handling can be subject to product damages. If handlings can be reduced,
product quality can improve.
-
Nex
cust
This
qual
As d
proc
enco
7.1.2
Base
proc
2.
Figu
Suit
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- Simple a
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2 Value b
ed on the pr
cess is prese
ure 21: Prop
able custom
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and easy to
simple, but
have been fi
dardized as
purchase id
me of the e
he process i
if possible,
rovide impo
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d value pro
and effort s
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posed Value
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use, and m
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ortant insig
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opositions c
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mework of T
oadPlate in
e Based Sale
identified b
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maintain: Sin
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st all of the
Key goal he
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ut into docu
e marketing
Töytäri et al
n Figure 21.
es Process f
by similar p
loading test
nce the desi
through the
component
ere has been
l suppliers,
alue propos
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some of t
ary terms ea
the first s
umenting th
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It can also
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product char
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the value
asily.
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n modified
o be seen on
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75
LoadPlate is
ts of small
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customer is
ds to shorter
the current
alue driver.
drivers are
e marketing
and also to
value sales
n Appendix
of previous
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5
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o
76
existing knowledge, internal assessment needs to be done on how the loading
would be done and what modifications would the LoadPlate need to make it work.
The price level is then reviewed with the customer to ensure that it is feasible to
continue and that the sales can be possible. By selecting either key or account
plan, company assesses that is there potential for multiple units, and how
independent individual units are. This sales process follows account plan.
Geographical and environmental assessment gives understanding in country or
culture specific boundaries for trade, or legal requirements for machinery.
Environmental aspect can set limitation for the support of equipment or
availability of spare parts.
When assessing customers process, internal calculations and process assessment is
made to understand how customer works at that moment. By reflecting to existing
deliveries, and possible case descriptions, a before – after scenario can be
constructed for the customer case. If customer has already done internal
assessments on the challenges on the loading process, then these findings are
incorporated to the case. At this point an assessment is done, if the customer is
potential for sales. In this point also the competition is mapped, as it has direct
effect on the value proposition selection.
Own product is positioned according to the points-of-differences against the next
best alternative. Using the customer case and internal costs of the customer, more
accurate simulation of the possible investment is done to demonstrate the value in
monetary terms.
After the internal work is done with the LoadPlate, and company has rough
understanding on how much the solution is worth to the customer, it is agreed
together with the customer that what the requirements are for the investment. By
deepening the accuracy of the simulation, an return of investment and total cost of
ownership assessment can be done by reflecting the data from earlier deliveries to
specific customer case.
77
In impact quantification the resonating focus value propositions are presented to
the customer. These one or two propositions should work as the tip of the spear
during the quantification, but also other point-of-difference propositions should be
taken into account, as these create more accurate picture of the change.
During the negotiation the terms of transaction is being settled and agreed upon.
This should include the legal agreements, delivery, timetable and price.
After delivery, there should be situation review in 6, 12, and 24 months after the
delivery. This way the learning curve and change in customer experiences can be
followed more closely. This information can be used as information to improve
training of new and existing customers. In this point also the value calculations
should be revised to the originally made ones. This will provide accuracy to the
future calculations and also the reliability of these calculations.
7.2 Limitations to the study
The study partially failed to answer to the first research question: Buying decision
criteria of current customer base? As some of the companies selected for the
interviews have owned the equipment for a long time, organizational changes,
retirements, and passing’s due illnesses made it challenging to find customers who
were involved in the initial purchases. As the modified rebuy situations had been
more recent, buying center members were easier to find. But as the focus was to
understand the situation on the initial purchase, so that the situations would be
comparable to use with potential customers, the study failed in reaching this
objective.
Small amount of interviews per company could not give broad understanding in
the customer organizations. Also the geographical diversity in the interviews was
small, as the Nordic business cultures are alike. Since Actiw has goal to expand to
North American lumber markets, this serves the function partly. Interviews of
North American lumber companies would have increased the insight of the target
78
market.
However, this study has given a good base for Actiw to start systematically
interview and investigate the value what the customers have gained. This
information can then be used for more organized marketing, which can lead into
success in the turbulent global markets.
79
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Brown, B.P., Zablah, A.R., Bellenger, D.N. & Donthu, N. (2012). “What factors influence buying center brand sensitivity?” Industrial Marketing Management. Vol. 41. pp.508-520 Bunn, M.D. (1993). “Taxonomy of Buying Decision Approaches” Journal of Marketing Vol. 57 (January 1993). pp. 38-56 Eisenhardt, K. (1989). Building theories from case study reserach. Academy of Management Review, Vol. 14, No. 4, pp. 532-550. Eisenhardt, K., & Graebner, M. (2007). Theory building from cases: opportunities and challenges. Academy of Management Journal, Vol. 50 No. 1, pp. 25-32. Farrell, M.A. & Schroder, B. (1996) “Influence Strategies in Organizational Buying Decisions”. Industrial Marketing Management Vol. 25. Pp. 293-303 Ferguson, J.L. and Johnson, W.J. (2010). “Customer response to dissatisfaction: A synthesis of literature and conceptual framework.” Industrial Marketing Management. Vol.40. pp.118-127
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Hapag-Lloyd: Container Specification. Source: https://www.hapag-lloyd.com/downloads/press_and_media/publications/Brochure_Container_Specification_en.pdf. Accessed 21.4.2015 Jalkala, A. and Salminen, R.T. (2010). ”Practices and functions of customer reference marketing – Leveraging customer references as marketing assets.” Industrial Marketing Management. Vol. 39. pp. 975-985. Johnston, W.J. and Bonoma, T.V. (1981). “The Buying Center: Structure and Interaction Patterns.” The Journal of Marketing. Vol. 45 No. 3. pp. 143-156 Johnston, W.J. and Lewin, J.E. (1996) “Organizational Buying Behavior: Towards an Integrative Framework”. Journal of Business Research. Vol.35. pp.1-15 Katrichis, J.M. (1998) “Exploring Departmental Level Interaction Patterns in Organizational Purchasing Decisions”. Industrial Marketing Management Vol.27. pp.135-146 Moon, J. & Tikoo, S. (2002) “Buying decision approaches of organizational buyers and users”. Journal of Business Research. Vol. 55. Pp. 293-299 Robinson, P. J., Faris, C. W. and Wind, Y. (1967) Industrial Buying and Creative Marketing. (1st ed.) Boston, USA: Allyn & Bacon, Inc.
Salminen, R. & Möller, K. (2006). “Role of references in business markets – Towards a normative theory of referencing. Journal of Business-to-Business Marketing. 13(1), pp. 1-52.
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Töytäri, P., Alejandro, T., Parvinen, P., & Ollila, I. (2011). Bridging the theory to application gap in value-based selling. Journal of Business & Industrial Marketing , Vol. 26, No. 7, pp. 493-502. Webster, F.E. (1965) “Modeling the Industrial Buying Process”, Journal of Marketing Research. Vol. II (November 1965), pp. 370-76
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Appendix I
LoadPlate Deliveries
Customer TypeYear of Delivery
Country Goods Type
1 Fin-Terpuu Oy LoadPlate 2 001 Finland Timber 3PL2 ILP-Group Oy LoadPlate 2 001 Finland Timber 3PL3 Bergkvist-Insjön Trävaru KB LoadPlate 2 003 Sweden Timber Producer4 Karl Hedin Sågverk AB LoadPlate 2 003 Sweden Timber Producer5 Steveco Oy LoadPlate 2 004 Finland Timber 3PL6 Steveco Oy MultiLP 2 004 Finland Timber 3PL7 Vika Wood LoadPlate 2 004 Latvia Timber Producer8 Luvian Saha Oy LoadPlate 2 004 Finland Timber Producer9 Sören Thyr AB LoadPlate 2 005 Sweden Timber 3PL
10 Stuveribolaget Gävle AB LoadPlate 2 006 Sweden Timber 3PL11 Sören Thyr AB LoadPlate 2 006 Sweden Timber 3PL12 Solomenskij Lesozavod JSC LoadPlate 2 006 Russia Timber Producer13 Stora Enso Timber AG, Ybbs LoadPlate 2 007 Austria Timber Producer14 Stora Enso Timber AG, Sollenau LoadPlate 2 007 Austria Timber Producer15 Bois Du Nord LoadPlate 2 008 France Timber Warehouse16 Sören Thyr AB LoadPlate 2 008 Sweden Timber 3PL17 van Leeuwen Buizen LoadPlate 2 008 Holland Steel Warehouse18 Norrköpings Hamn och Stuveri AB LoadPlate 2 008 Sweden Timber 3PL19 Sandvik Materials Technology LoadPlate 2 008 Sweden Steel Producer20 Fredericia Shipping A/S LoadPlate 2 008 Denmark Steel 3PL21 DCT Gdansk LoadPlate 2 009 Poland General Cargo 3PL22 TM Baikal LoadPlate 2 010 Russia Timber Producer23 Kokkolan Lastaus Oy (Rauanheimo) LoadPlate 2 010 Finland Timber 3PL24 Skutskärs Hamn & Logistik AB LoadPlate 2 010 Sweden Pulp reels 3PL25 Stuveribolaget Gävle AB LoadPlate 2 011 Sweden Steel 3PL26 Hiansa Panel, S.A. LoadPlate 2 011 Spain Construction panels Producer27 DB Schenker - Romtrans LoadPlate 2 011 Romania General Cargo 3PL28 Fin-Terpuu Oy LoadPlate 2 011 Finland Timber 3PL29 Raahen Satama MultiLP 2 011 Finland Steel 3PL30 LLC Amurskaya LK LoadPlate 2 012 Russia Timber Producer31 ILP-Group Oy LoadPlate 2 013 Finland Timber 3PL32 Sören Thyr AB LoadPlate 2 013 Sweden Timber 3PL33 Carpenter Technology LoadPlate 2 013 USA Steel Producer34 Sandvik Materials Technology LoadPlate 2013 India Steel Producer35 Sandvik Materials Technology LoadPlate 2013 Czech Rep. Steel Producer36 Sandvik Materials Technology LoadPlate 2013 China Steel Producer37 Sandvik Materials Technology LoadPlate 2013 USA Steel Producer38 Heraeus Quarzglas Gmbh LoadPlate 2013 Germany General Cargo Producer39 Fin-Terpuu Oy LoadPlate 2013 Finland Timber 3PL40 Cedar d.o.o (Limit Plus) LoadPlate 2013 Croatia Timber Producer41 Ege-Profil LoadPlate 2013 Turkey Steel Producer42 Reliance industries LoadPlate 2013 Intia Petrochemical Producer43 Forestal y paperla Conception LoadPlate 2014 Chile Tissue paper Producer44 Jansens & Dieperink LoadPlate 2014 Hollanti Aluminum Silos Producer45 Pfeifer Holz LoadPlate 2014 Germany Timber Producer46 SCA Forest Products - Umeå LoadPlate 2014 Sweden Timber Producer47 SCA Forest Products - Sundsvall LoadPlate 2014 Sweden Timber Producer48 Luvian Saha Oy LoadPlate 2014 Finland Timber Producer49 Shorelink Ab LoadPlate 2014 Sweden Timber 3PL50 Eskilstuna Kommunfastinghet LoadPlate 2014 Sweden Timber 3PL51 Tilly Holz LoadPlate 2014 Austria Timber Producer52 Sören Thyr AB LoadPlate 2015 Sweden Timber 3PL53 Vänerhamn AB LoadPlate 2015 Sweden Timber 3PL54 Euroports Rauma Oy LoadPlate 2015 Finland Timber 3PL55 Perfinor LoadPlate 2015 Spain Construction panels Producer
Identify suitable customers
•Is there currentcustomers insame productgroup?
•Similarities toexistingdeliveries?
•Account or keyaccount plan?
•Geographical &Environmentalconditions
Understand customer business
•Internal costs inloading process?
•Does customerrealize challengesin loadingprocess?
•Map competition•Sales potential?
Position own offering
•Find points-of-differencecompared tocompetition /current situation
•Simulate businesscase
Set mutual targets
•Goals which needto be reached?
•ROI limit?•Timetable?•Total cost ofownership
Quantify impact
•Experiencetransfer fromearlier projects?
•Select resonatingfocus valuepropositions
•Total cost ofownership
Negotiate, offer, and deliver
•Agreement oncontract terms andprice•Check legalconditions
•Check localrequirements
Verify and document impact
•Measure changes ofimplementation at6, 12, and 24m
•Check forunforseen(mis)benefits
•Adjust valuepropositions
•Case study
Appendix 2
Go / No-Go
Go / No-Go
Go / No-Go
Go / No-Go
Go / No-Go
Go / No-Go