Erasmus students Weblog

Recommendation of a book: Michael Solomon, Gary Bamossy, Soren Askegaard „Consumer behavior – a european perspective”, 4th Ed., Chapter 2 – perception
November 16, 2008, 4:55 pm
Filed under: Cases, Classes, Uncategorized | Tags:

The main subject of the chapter is to explain how perception of people works and how looks a way from our senses to interpretation of its signal from marketing perspective. It also describes how marketers use our perceptional behaviors to position different brand.

I find the chapter very interesting because it clearly explains important things in a simple way. What is more, inside this part of the book you can find many practical examples as well as pictures from marketing world which helps you to better understand theoretical knowledge.


“A Cognitive and Behavioral Hierarchical Decision-Making Model of College Students’Alcohol Consumption”.
November 16, 2008, 4:50 pm
Filed under: Cases, Classes, Uncategorized | Tags:

Psychology & Marketing, Vol. 22(8): 649–668 (August 2005)  Published online in Wiley InterScience (  © 2005 Wiley Periodicals, Inc. DOI: 10.1002/mar.20078

Review of article from a Proquest data base:

The market of alcohol beverages is very profitable and sophisticated as exists on them huge competition. One of the most desirable consumers are young students who just begin their adult life, The article tries to explain why youth from colleges and universities start drinking, what are their main reasons to do so and how often they used to drink during their studies. All the answers are based on random group of people from biggest American universities.

In my opinion the article itself is not as interesting as of its subject. The language is very specialized and should be understood for people dealing with statistic research rather than marketing behaviors. The main topic is not to explain reasons why college students start drinking but if the results answer some hypothesis given at the beginning. Positive side of the article is huge bibliography on which it is based on so everyone who is interested in this kind of research can easily extend his or her knowledge by reading other publications mentioned in text.

Eco Valley – how to do CRM in a public company ?
November 16, 2008, 4:43 pm
Filed under: Practice | Tags:

ABC about company

Waste management on the range of business activity of the Communal Union “Dolina Redy i Chylonki”, has been given to Eko Dolina. The Communal Union associates seven neighboring municipalities: Sopot, Gdynia, Wejherowo, Rumia, Reda, Kosakowo, Wejherowo municipality (about 400 000 inhabitants).
Communal Union „Dolina Redy i Chylonki” was established in 1991.

Tasks of the Communal Union

· Water supply of municipalities,
· Receipt and waste water treatment,
· Central heating,
· Waste management system,
· Ecological education and information,
· Maintenance of order and cleanness,
· Environmental protection – air, nature and soil,

In this range Union performs public tasks instead of municipalities. The Communal Union together with municipalities is co-owner of three companies:
· “PEWIK” Ltd in Gdynia, which operates in water management system
· “OPEC” Ltd in Gdynia, which operates in (heating system)
· Eko Dolina Ltd in Łężyce.

System MIX associates organizational, legislative and educational activities for implementation of modern waste management system.

Customer Relationship management

As a company is built on capital of local municipalities, its main customers are people who live there. The main aim of customer relationship policy is maintaining good relations between local people and company which area of activity like collecting garbage may be onerous for inhabitants living near to that place. That is why company decides to do a pro public policy which main aspects are:

Activities for Łężyce

In addition to the statutory tasks of the company, Eco Valley has taken and is taking a number of investment for the residents of Łężyce. These activities aim to raise standards of living and improve the ratio of local communities to business.
In February 2000 an agreement was signed between the municipality Truro, and the Department of ECO VALLEY.
Under the agreement with residents of Łężyce in April 1999 Eco Valley has committed to:

1. Construction of rural roads in Łężyce over a distance of 600 – 800 m, the road will be reinforced, asphalt with the necessary infrastructure (shoulder, culverts, etc.). The local roads will determine the conduct of land-use planning.

2. The organization of municipal waste water treatment system from the site of Łężyce. Was planned execution of the sewerage network with a length of 4,000 m from the discharge of waste water treatment plant to “Dębogórze” by collector sanitary Department VALLEY ECO.
3. The construction of deepwater wells supplementing the existing mains water-supply system.

4. Implementation of the modernization and complete the street lighting continuous part of the village Łężyce in length to 800 m.

5. Building of pitches, changing rooms and the playground

6. The modernization of the existing bus stops and building new ones in the quantity of 9 pc

7. Implementation of planting greenery interest (green areas, hedgerows) and building ecological corridors with a total area of 7.7 hectares.

8. Routing and pre-compression of roads over a distance of around 2,300 meters – as described in the draft plan for the management of spatial strings

Ensuring and implementing:

1. Systematic monitoring of the environmental tests of air, water, land and ensure access to the inhabitants of the examinations and their results – a task performed on a regular basis.

2. Maintaining the environment Eco Valley, Łężyce and rural access roads in the purity and order, as well as assistance in organizing winter road maintenance No 1404G – a task performed on a regular basis.

Improve the situation in the social field:

1. Giving priority to employment in Eco Valley of residents of Łężyce.57 people are employed.

2. Taking over the period 1999 – 2001 graduation rates, improve job training for residents.

Funding social courses for local people :
– Exchange service cash registers – individual training,
– Exchange of drivers of vehicles equipped – trucks driven by combustion,
– Courses support the Windows NT operating system, word processor Microsoft Word 2000, Microsoft Excel spreadsheet 2000, and the Internet,
– The school of modern offices for secretaries, administrative staff,
– A course entitled. “Human resources, payroll, social security,”
With eighteen courses have benefited residents of Łężyce, so to increase their professional abilities and become more attractive in the labor market.

3. The granting of local operators within the limits permitted the public procurement law, the priority in obtaining contracts during the construction and operation of Eco Valley, in terms of services and works financed from national resources.

4. Providing a free collection and disposal of solid waste from residents of Łężyce (as at 30.04.1999r.) Throughout the duration of the operation of Eco Valley.

5. Propose a change in the name of BET in such a way that will not be used in the determination of associate village Łężyce waste management.
Announced a contest to change the name of the Association. Settlement of the competition is the name of “Eco Valley.”

6. Making donations to the Association of Residents of Łężyce – a task performed on a regular basis.
Eco Valley forward Residents Association of Łężyce measures to achieve the following objectives:

– Promoting measures in the sphere of environmental protection – an organization point of information, together with access to the Internet
– Other statutory activities.

November 11, 2008, 7:41 pm
Filed under: Definitions

IBM offers strategic customer relationship management (CRM) solutions tailored to specific industry processes that can promote growth and profitability by providing a compelling, consistent customer experience across channels.

IBM CRM solutions enable a better understanding of customer sets and expectations to improve interactions with your employees and online systems. We offer:

  • Technology platforms that align business units across departments, enabling collaborative information sharing.
  • Strategic alliances with world-leading application providers including Oracle, SAP, Avaya, Genesys, Infor, KANA, and Nortel.
  • Extensive industry-specific strategy, implementation, integration and infrastructure expertise.
  • The right mix of hardware, software and services that can help drive a successful CRM implementation at your company.

Our CRM solutions are based on customer-focused strategies, incorporate all necessary departments, and are built on a scalable architecture that can start small but adjust to growing volumes of data. We have technology integration and project management expertise to help ensure a successful, consistent implementation across your business processes. Let IBM help you turn customers into advocates, while driving profitability and growth across your organization.

The Secrets Of Peppers and Rogers (Kaspars)
October 28, 2008, 11:55 pm
Filed under: Links

J. Dyche, The CRM Handbook, A Business Guide to Customer Relationship Management (Kaspars)
October 28, 2008, 9:49 pm
Filed under: Practice, Theory

Web-based Self-Service

From my opinion it is very important service to company because you can find all necessary information at companies homepage. Company where I work, they use this service all the time because it is convenient to customer to check the information by himself just putting the right information where it is needed. Everything is created very simple and easy to understand. Other thing is that customers can see promotions or other interesting information nearby the thing he is doing that moment. Very big companies usually can’t provide good call-center service and other thing is that often customers are asking the same questions over and over again, so at your website you can create FAQ (Frequently Asked Questions) which customer can easily find. Some companies create even top 5 of them. In company where I work, they use the same system. You can find FAQ section and see the main questions. We have 24-hour helpline in case of problems and reservation telephone. These 2 are very important issues at my company.

People are willing to find any contacts in homepage if they have any questions or problems. That is very important that they can find it easily.

Some companies are providing person to person – electronic support like online chat. In my company we don’t have such things and we don’t need it. You can contact our company through e-mail and I think that it is enough. If you have some more important question, you can always find our telephone at homepage and call, but usually we solve client problems through e-mail.

Peppers & Rogers Group Insight (Re: Return on Customer)- (VW)
October 28, 2008, 2:34 pm
Filed under: Theory


What steps does your company take related to ROC?

Does your company primarily focus on short-term or long-term decision-making?

Do you proactively have measures in place to build customer trust?

What’s the difference between ROI and ROC?

If we measure return on investment accurately, isn¹t that just as good as Return on Customer? In a word: no. ROI is based on the premise that money is your scarcest resource.

But customers are, quite literally, scarcer than money. If you have a customer you can almost always get the capital you need to serve him. On the other hand, even when you have money, you can¹t always get customers. There are only a limited number of customers, and a business needs to create the most value possible from each one. ROI measures the efficiency with which a business creates value from the capital available, while ROC measures the efficiency with which it creates value from the customers available.
To take a simple example, suppose a company is considering two treatments for its customers, to improve their LTV. Treatment A is a voucher that improves LTV and also returns a profit to the business. That is, every time a customer accepts this offer, the firm not only increases that customer¹s LTV, but also earns more money than the voucher cost. It is a self-liquidating promotion. Treatment B generates a higher LTV increase, but incurs a cost on execution. The decision-maker who treats capital as the scarce resource thinks Treatment A is better because it is completely self-liquidating. He reasons that all he needs to do to create more value with A than with B is to run A over and over and over again creating value every time, at no cost to the firm. But the manager who recognizes that customers are the scarce resource knows it is impossible to run any treatment ³over and over² again, because customers are limited in number.
His task is to create the most value with the customers available. He will probably choose Treatment B. Return on Customer is not a magic formula; it is simply a calculation based on the premise that customers are your scarcest value-creating resource. Acknowledging this fact will allow you to balance your actions so as to create a more solid and robust business‹one that not only returns current earnings, but is more likely to continue as a valuable enterprise long into the future.

How do I balance short and long term?

Some executives tell us that while ROC is a nice concept, how does it help a firm make a profit, today? It¹s important to remember that the Return on Customer argument does not imply that increases in lifetime values are any more important than cash. Far from it. LTV, by its very nature, is already a diminished version of cash, because it is based on discounted future cash flows. Nevertheless, short-term results are more important to some businesses than others. The right way to quantify the intensity of your company¹s preference for the short term is simply to raise your discount rate. The more important the short term is, or the more risky it is to wait for long-term results, the higher discount rate you should use. Our problem is that because they completely ignore long-term value creation (i.e., changes in LTV), most businesses are in effect using an unnaturally high discount rate some even use a rate greater than 100 percent.

How can I predict changes in customer lifetime value?

This is of course the crux of the ROC idea. To calculate the long-term customer value created by its actions, a firm must be capable of somehow predicting today that a customer lifetime value will increase or decrease. We¹ve identified four types of ³leading indicators² of changes in lifetime value-variables that can be measured today and indicate a likely change in the future behavior of a customer or customer group. Lifestyle changes include events like marriage, pregnancy, retirement, or divorce, which can obviously change a customer¹s future behavior. Then there are the drivers of a company¹s LTV equation itself‹customer-churn rate, repeat purchase frequency, and so forth. Third are behavioral cues. Customers who change their purchase patterns, frequency of contact, or their payment frequency are giving you a clue to their future behavior. The fourth leading indicator is attitude.
Attitudes precede behavior, so changes in customer satisfaction levels, willingness to recommend, or other such attitudes are all signals that communicate likely changes in the future behavior of customers.

Return On Customer

“Without Customers, You Don’t Have a Business.
You Have a Hobby.”

In their new book Return on Customersm, bestselling authors and renowned consultants Don Peppers and Martha Rogers, Ph.D. address today’s most crucial business question: How do companies strike the right balance between maximizing current-period profits and building long-term enterprise value. The foundation of their findings is a customer-based value proposition that provides a practical and sound business metric to better manage your business – this quarter, this fiscal year, and for the foreseeable future.

Peppers and Rogers present a compelling case that long-term customer equity is an enterprise’s single most valuable asset. In Return on Customer the authors provide a deceptively simple formula for measuring customer profitability and provide the tools for analyzing what the proper balance of customer attraction, retention, and in some cases loss, is for your company. Determining how best to create long-term customer value is central to any successful business strategy.

In addition to offering a unique growth strategy, Return on Customer can improve your company’s everyday practices and provide a means to measure the results of those efforts. Peppers and Rogers offer insights from many of today’s brightest business success stories to illustrate that understanding how individuals within your customer base differ in terms of needs and values, and that creating learning relationships along with other customer-focused efforts, has led Best Buy,, Southwest Airlines, and Costco to profitability.

Simply put: To maximize the value of what their customers do for them, these successful companies have placed maximum value on their customers. In turn, we can see that maximizing the value of the customer base is equal to maximizing the value of the enterprise.

Why Return on Customersm
After writing the successful and highly influential One to One book series, Don Peppers and Martha Rogers, Ph.D. had a somewhat radical idea. They started thinking about how customers can help businesses. They wanted to break away from previous theories and business strategies. In talking with many business leaders they realized that not everyone was thinking like they were. When they asked executives what the primary source of their revenue is, most answered that it is sales of their product. Too few realized that the ultimate source of their revenue is their customers—today and in the future. Don and Martha charged themselves with the mission to let executives know that every function across an enterprise, from hiring, training, accountability, etc. should revolve around their most valuable resource—customers.

Larry Kudlow, Host of CNBC’s “Kudlow and Company,” has offered highest praise for Return on Customer: “Finally! A business metric that can drive better management and a higher stock price. I predict soon you’ll be hard pressed to find a company that isn’t tracking ROCsm.”

Read more industry praise for Return on Customersm