| Learning objectives |
- Explain how financial value is created in firms and how
financial value creation and profitability can be measured at the
firm-, market- and customer-level respectively.
- Select, explain and apply relevant customer-based metrics and
models covered in the course to analyze financial value creation in
a firm.
- Analyze and describe how sales/marketing managers and business
developers could use relevant theories and models covered in the
course to manage the financial value of customer relationships in a
specific case setting.
- Present a clear and coherent argument for your selection of key
theories and models and follow academic conventions in your oral
presentation.
|
| Prerequisites for registering for the exam
(activities during the teaching period) |
|
Number of compulsory
activities which must be approved (see section 13 of the Programme
Regulations): 1
Compulsory home
assignments
The student must get 1 out of 2 assignments/activities approved in
order to attend the ordinary exam.
1. Weekly quiz: Every week a mandatory multiple-choice test is
administered. The purpose of the test is to provide students with
an overview of which topics they master and which not. More
specifically, the multiple-choice test examines students’
capabilities with respect to (i) knowledge, (ii) comprehension,
(iii) application, and (iv) problem solving for the topics covered
in the course. This helps students to better prepare for the final
exam.
2. Interactive case: During the course students will work on an
interactive case. The purpose of the case is to provide students
with skills on how to apply theories and tools and reflect on its
use. This helps students to better understand theories and prepare
for the final exam.
Students will not have extra opportunities to get the required
number of compulsory activities approved prior to the ordinary
exam. If a student has not received approval of the required number
of compulsory activities or has been ill, the student cannot
participate in the ordinary exam.
If a student prior to the retake is still missing approval for the
required number of compulsory activities and meets the
pre-conditions set out in the program regulations, an extra
assignment is possible.
The extra assignment is a 10 page home assignment that will cover
the required number of compulsory activities. If approved, the
student will be able to attend retake.
|
| Examination |
|
Customer and
Firm Profitability:
|
| Exam
ECTS |
7,5 |
| Examination form |
Oral exam |
| Individual or group exam |
Individual exam |
| Duration |
20 min. per student, including examiners'
discussion of grade, and informing plus explaining the
grade |
| Preparation time |
With the listed preparation time: 20
Minutes |
| Grading scale |
7-point grading scale |
| Examiner(s) |
Internal examiner and external examiner |
| Exam period |
Summer |
| Aids |
Open book: all written and electronic aids
The student is
allowed to bring to the preparation room: Simple writing and
drawing utensils, laptop/tablet as a reference book (NB: there are
no electric outlets available), any calculator, books including
translation dictionaries, compendiums, notes. PLEASE NOTE: Students
are not allowed to communicate with others during the preparation
time. |
| Make-up exam/re-exam |
Same examination form as the ordinary
exam
|
|
| Course content, structure and pedagogical
approach |
|
Aim
Students will achieve a solid understanding of customer related
costs, profitability, and value creation tools and techniques that
provide a transparent, fact-based financial foundation for
strategic sales decisions with the purpose of driving business
performance in terms of customer equity, customer profitability,
and customer lifetime value. This general financial understanding
is a key asset to sales/ marketing managers and business developers
alike as they are increasingly expected to identify the financial
potential of sales development strategies. Students will also learn
how to strategically approach key accounts management and
understand that every customer has different expectations and needs
that must be translated into how the sales force engages with the
customers.
Content
The course is divided into three main parts:
The first part establishes how financial value is created in
firms. The students are introduced to key concepts such as
shareholder value, cost management, different types of firm
profitability measures, net present value, and customer
profitability measures.
In the second part of the course students will be exposed to
some long term measures of financial value creation at customer
level such as customer lifetime value and customer equity and the
use of customer analytics with relation to these metrics will be
demonstrated.
The final part of the course deals with the management of
customer accounts for value. Generally, the insights generated by
analyzing the financial value of customer accounts must be
converted into actionable customer management
strategies.
|
| Description of the teaching methods |
| This course is delivered in a blended learning
format. That is, we combine online material and lectures with
in-class discussions and workshops. A high level of interaction is
expected from the students. In class we will deploy a mix of
lectures, discussions, and interactive case studies. Moreover,
several guest speakers will be invited to share their perspectives
from practice. |
| Feedback during the teaching period |
| Quizzes are used to give students a better
overview of whether they are following the expected learning curve.
During the interactive case students will get feedback from peers
and the teachers. At the end of the course a Q&A session is
planned. |
| Student workload |
| Teaching |
33 hours |
| Preparation |
123 hours |
| Exam |
50 hours |
|
| Expected literature |
|
Research paper based (Indicative literature - more literature
will be announced upon enrollment):
- Berger, P.D. & N.I. Nasr (1998): “Customer Lifetime Value:
Marketing Models and Applications”, Journal of Interactive
Marketing, 12 (Winter).
https://doi.org/10.1002/(SICI)1520-6653(199824)12:1<17::AID-DIR3>3.0.CO;2-K
- Cokins, G. (2012) How to Measure and Manage Customer Value and
Customer Profitability
https://www.researchgate.net/publication/289410908_How_to_Measure_and_Manage_Customer_Value_and_Customer_Profitability
- Dalci, I. et al (2010). Customer profitability analysis with
time driven activity-based costing: a case study in a hotel.
International Journal of Contemporary Hospitality Management.
22(5), pp. 609-637.
https://www.researchgate.net/publication/235294113_Customer_Profitability_Analysis_with_Time-driven_Activity-based_Costing_A_Case_Study_in_a_Hotel
- Gupta, S. (2009). Customer-Based Valuation. Journal of
Interactive Marketing, 23, 169-178.
https://www.sciencedirect.com/science/article/pii/S109499680900036X
- Gupta, S., Lehmann, D.R., Stuart, J.A. (2004): “Valuing
Customers.” Journal of Marketing Research, 41 (February), 7-18.
https://doi.org/10.1509/jmkr.41.1.7.25084
- Gupta, Sunil, and Donald R. Lehmann. "Customers As
Assets." Journal of Interactive
Marketing 17, no. 1 (winter 2002): 9–24.
https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/721/gupta_customers.pdf
- Holm, M., & Ax, C. (2020). The interactive effect of
competition intensity and customer service competition on customer
accounting sophistication—Evidence of positive and negative
associations. Management Accounting Research, 46,
100644.
https://doi.org/10.1016/j.mar.2019.07.001
- Holm, M., V. Kumar, and C. Rohde. (2012): “Measuring Customer
Profitability in Complex Environments: An Interdisciplinary
Contingency Framework.” Journal of the Academy of Marketing Science
40 (3): 387-401.
https://link.springer.com/article/10.1007/s11747-011-0263-4
- IMA (2010): “Customer Profitability Management.” Statement on
Management Accounting Business Performance Management:
https://www.imachina.org.cn/Uploads/File/2019/02/21/u5c6e75b44c404.pdf
- Kaplan, R.S., Anderson, S.R. (2004): Time-Driven Activity-Based
Costing. Harvard Business Review, November, 131-138.
https://hbr.org/2004/11/time-driven-activity-based-costing
- Kumar, V., Shah, D. (2009): “Expanding the Role of Marketing:
From Customer Equity to Market Capitalization.” Journal of
Marketing 73, 119-136.
https://doi.org/10.1509/jmkg.73.6.119
- Robin Gleaves, R., J. Burton, J. Kitshoff, K. Bates & M.
Whittington (2008) Accounting is from Mars, marketing is
from Venus: establishing common ground for the concept of customer
profitability, Journal of Marketing
Management, 24:7-8, 825-845
https://doi.org/10.1362/026725708X345533
- Rust, R. T., K. N. Lemon, and V. A. Zeithaml. (2004): Return on
marketing: Using customer equity to focus marketing strategy.
Journal of marketing 6 (January 2004), pp. 109-127.
https://journals.sagepub.com/doi/10.1509/jmkg.68.1.109.24030
- Sunil Erevelles, S. N. Fukawa, L. Swayne (2016). Big Data
consumer analytics and the transformation of marketing. Journal of
Business Research. Volume 69, Issue 2. pp 897-904.
https://www.sciencedirect.com/science/article/pii/S0148296315002842
- Venkatesan R., Kumar V. (2004): A Customer Lifetime Value
Framework for Customer Selection and Resource Allocation Strategy.
Journal of Marketing, 68(4), 106-125.
https://doi.org/10.1509/jmkg.68.4.106.42728
|
Permalink