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Book part
Publication date: 14 March 2024

Anett Erdmann

Digitalization and marketing technologies have made it possible to overcome some barriers to pricing – a multidisciplinary field between marketing, finance and IT – and have set…

Abstract

Digitalization and marketing technologies have made it possible to overcome some barriers to pricing – a multidisciplinary field between marketing, finance and IT – and have set the stage for a paradigm shift in the pricing profession. Value creation, the pricing process, and price communication have been transformed by innovative business models and advanced algorithmic and human–machine solutions. This chapter synthesizes the literature to date and provides a comprehensive framework for an all-encompassing 360° pricing approach that broadens the understanding of pricing in the context of digital business across all steps of the price management process. Starting from product attributes and motivational beliefs in consumers' value assessment and adoption of (technological or digital) products or services, new business models and pricing models emerge in the digital economy, human–machine solutions for price implementation and repricing are increasingly applied, and price search and communication take place through a variety of digital communication channels. Each stage of this framework discusses concrete examples, highlighting the freemium strategy, the subscription model, price tracking and repricing tools, and digital price information channels such as e-commerce, marketplace, or price comparison platforms. The implications for price management in a digital, technology-driven landscape are discussed from the executive level to the analyst level.

Details

The Impact of Digitalization on Current Marketing Strategies
Type: Book
ISBN: 978-1-83753-686-3

Keywords

Article
Publication date: 29 August 2023

Sarin Raju, Rofin T.M., Pavan Kumar S. and Jagan Jacob

In most economies, there are rules from the market regulators or government to sell at an equal wholesale price (EWP). But when one upstream channel is facing a negative demand…

Abstract

Purpose

In most economies, there are rules from the market regulators or government to sell at an equal wholesale price (EWP). But when one upstream channel is facing a negative demand disruption and another positive, EWP can create extra pressure on the disadvantageous supply chain partner, which faces negative disruption. The purpose of this study is to analyse the impact of EWP and the scope of the discriminatory wholesale price (DWP) during disruptions.

Design/methodology/approach

For the study, the authors used a dual-channel supply chain consisting of a manufacturer, online retailer (OR) and traditional brick-and-mortar (BM) retailer. Stackelberg game is used to model the interaction between the upstream and downstream channel partners, and the horizontal Nash game to analyse the interaction within downstream channel partners. For modelling asymmetric disruption, the authors took instances from the lock-down and post-lock-down periods of the COVID-19 pandemic, where consumers flow from BM retailer to OR store.

Findings

By analysing the disruption period, the authors found that this asymmetric disruption is detrimental to the BM channel, favourable to OR and has no impact on the manufacturer. But with DWP, the authors found that the profit of the BM channel and manufacturer can be increased during disruption. Though the profit of the OR decreased, it was found to be higher than in the pre-disruption period. Under DWP, the consumer surplus increased during disruption, making it favourable for the customers also. Thus, DWP can aid in creating a win-win strategy for all the supply chain partners during asymmetric disruption. Later as an extension to the study, the authors analysed the impact of the consumer transfer factor and found that it plays a crucial role in the optimal decisions of the channel partner during DWP.

Originality/value

Very scant literature analyses the intersection of DWP and disruptions. To the best of the authors’ knowledge, this study, for the first time uses DWP as a tool to help the disadvantageous supply chain partner during asymmetric disruptions. The study findings will assist the government, market regulators and manufacturers in revamping the wholesale pricing policies and strategies to help the disadvantageous supply chain partner during asymmetric disruption.

Details

Journal of Modelling in Management, vol. 19 no. 3
Type: Research Article
ISSN: 1746-5664

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Article
Publication date: 9 May 2023

Anurag Mishra, Pankaj Dutta and Naveen Gottipalli

The supply chain (SC) of the fast-moving consumer goods (FMCG) sector in India witnessed a significant change soon after introducing the Goods and Services Tax (GST). With the…

Abstract

Purpose

The supply chain (SC) of the fast-moving consumer goods (FMCG) sector in India witnessed a significant change soon after introducing the Goods and Services Tax (GST). With the initiation of this tax, companies started moving from individual state-wise warehouses to consolidation warehouses model to save costs. This paper proposes a model that frames a mathematical formulation to optimize the distribution network in the downstream SC by considering the complexities of multi-product lines, multi-transport modes and consolidated warehouses.

Design/methodology/approach

The model is designed as mixed-integer linear programming (MILP), and an algorithm is developed that works on the feedback loop mechanism. It optimizes the transportation and warehouses rental costs simultaneously with impact analysis.

Findings

Total cost is primarily influenced by the critical factor transportation price rather than the warehouse rent. The choice of warehouses at prime locations was a trade-off between a lower distribution cost and higher rent tariffs.

Research limitations/implications

The study enables FMCG firms to plan their downstream SC efficiently and to be in line with the recent trend of consolidation of warehouses. The study will help SC managers solve complexities such as multi-product categories, truck selection and consolidation warehouse selection problems and find the optimum value for each.

Originality/value

The issues addressed in the proposed work are transporting products with different sizes and weights, selecting consolidated warehouses, selecting suitable vehicles for transportation and optimizing distance in the distribution network by considering consolidated warehouses.

Details

International Journal of Productivity and Performance Management, vol. 73 no. 3
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 27 December 2022

Bright Awuku, Eric Asa, Edmund Baffoe-Twum and Adikie Essegbey

Challenges associated with ensuring the accuracy and reliability of cost estimation of highway construction bid items are of significant interest to state highway transportation…

Abstract

Purpose

Challenges associated with ensuring the accuracy and reliability of cost estimation of highway construction bid items are of significant interest to state highway transportation agencies. Even with the existing research undertaken on the subject, the problem of inaccurate estimation of highway bid items still exists. This paper aims to assess the accuracy of the cost estimation methods employed in the selected studies to provide insights into how well they perform empirically. Additionally, this research seeks to identify, synthesize and assess the impact of the factors affecting highway unit prices because they affect the total cost of highway construction costs.

Design/methodology/approach

This paper systematically searched, selected and reviewed 105 papers from Scopus, Google Scholar, American Society of Civil Engineers (ASCE), Transportation Research Board (TRB) and Science Direct (SD) on conceptual cost estimation of highway bid items. This study used content and nonparametric statistical analyses to determine research trends, identify, categorize the factors influencing highway unit prices and assess the combined performance of conceptual cost prediction models.

Findings

Findings from the trend analysis showed that between 1983 and 2019 North America, Asia, Europe and the Middle East contributed the most to improving highway cost estimation research. Aggregating the quantitative results and weighting the findings using each study's sample size revealed that the average error between the actual and the estimated project costs of Monte-Carlo simulation models (5.49%) performed better compared to the Bayesian model (5.95%), support vector machines (6.03%), case-based reasoning (11.69%), artificial neural networks (12.62%) and regression models (13.96%). This paper identified 41 factors and was grouped into three categories, namely: (1) factors relating to project characteristics; (2) organizational factors and (3) estimate factors based on the common classification used in the selected papers. The mean ranking analysis showed that most of the selected papers used project-specific factors more when estimating highway construction bid items than the other factors.

Originality/value

This paper contributes to the body of knowledge by analyzing and comparing the performance of highway cost estimation models, identifying and categorizing a comprehensive list of cost drivers to stimulate future studies in improving highway construction cost estimates.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 3
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 5 March 2024

Daniel Padgett, Christopher D. Hopkins and Colin B. Gabler

This paper aims to investigate the interrelated role of relational commitment and dependence as drivers of key performance outcomes. Specifically, the authors provide a conceptual…

Abstract

Purpose

This paper aims to investigate the interrelated role of relational commitment and dependence as drivers of key performance outcomes. Specifically, the authors provide a conceptual model of the impact of commitment on relationship value dependence and switching cost dependence. The authors further investigate how these dimensions of dependence offer differing noneconomic and economic paths to strategic and financial performance.

Design/methodology/approach

Survey data was collected from 296 purchasing agents across multiple industries located in the USA. The conceptual model and accompanying hypotheses were tested via partial least squares structural equation modeling.

Findings

The results show that the relational path is driven by affective and normative commitment, which are related to relationship value dependence. Conversely, calculative commitment is related to switching cost dependence. This economic path is related to both strategic and financial performance, whereas the relational path is more closely related to strategic as opposed to financial performance outcomes.

Research limitations/implications

This study extends research on Business-To-Business (B2B) relationships by leveraging social exchange theory to examine the interrelated roles played by two forms of dependence on performance outcomes. Thus, the authors answer Scheer et al.’s (2015) call for research into the two distinct types of dependence – relationship value and switching cost dependence – and their roles in determining B2B relationship outcomes. The findings contribute to the literature by integrating social exchange and relationship marketing concepts to develop a dual pathway approach to B2B partnerships.

Practical implications

The results suggest that dependence is not necessarily negative for firms. Specifically, buyers can and do still exhibit positive performance, both strategic and financial, in relationships with suppliers even when dependent on the relationship. Regardless of whether buyers are dependent due to a relationship or economic factors, both can, in different ways, lead to positive strategic and financial outcomes. Together, the authors contribute to the understanding of B2B partnerships by offering guidelines for both buyers and suppliers in the dyad.

Originality/value

The authors derive a comprehensive model depicting primarily relational and economic paths to performance through different types of commitment and dependence. The authors contribute to the literature by demonstrating that relational and economic paths to success are not the same, highlighting how firms could influence performance even when the relationship is not necessarily characterized by generally positive relational benefits and behaviors.

Details

European Journal of Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 27 June 2023

Nirodha Fernando, Kasun Dilshan T.A. and Hexin (Johnson) Zhang

The Government’s investment in infrastructure projects is considerably high, especially in bridge construction projects. Government authorities must establish an initial…

Abstract

Purpose

The Government’s investment in infrastructure projects is considerably high, especially in bridge construction projects. Government authorities must establish an initial forecasted budget to have transparency in transactions. Early cost estimating is challenging for Quantity Surveyors due to incomplete project details at the initial stage and the unavailability of standard cost estimating techniques for bridge projects. To mitigate the difficulties in the traditional preliminary cost estimating methods, there is a requirement to develop a new initial cost estimating model which is accurate, user friendly and straightforward. The research was carried out in Sri Lanka, and this paper aims to develop the artificial neural network (ANN) model for an early cost estimate of concrete bridge systems.

Design/methodology/approach

The construction cost data of 30 concrete bridge projects which are in Sri Lanka constructed within the past ten years were trained and tested to develop an ANN cost model. Backpropagation technique was used to identify the number of hidden layers, iteration and momentum for optimum neural network architectures.

Findings

An ANN cost model was developed, furnishing the best result since it succeeded with around 90% validation accuracy. It created a cost estimation model for the public sector as an accurate, heuristic, flexible and efficient technique.

Originality/value

The research contributes to the current body of knowledge by providing the most accurate early-stage cost estimate for the concrete bridge systems in Sri Lanka. In addition, the research findings would be helpful for stakeholders and policymakers to propose policy recommendations that positively influence the prediction of the most accurate cost estimate for concrete bridge construction projects in Sri Lanka and other developing countries.

Details

Journal of Financial Management of Property and Construction , vol. 29 no. 1
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 25 March 2024

Francis Nuako, Frank Ato Ghansah and Thomas Adusei

It is widely accepted that one criterion for determining if a construction project is successful is whether it is completed within the expected budget. There have been…

Abstract

Purpose

It is widely accepted that one criterion for determining if a construction project is successful is whether it is completed within the expected budget. There have been advancements in the management of building projects throughout time but cost overruns remain a key concern in the construction sector internationally, particularly in emerging economies such as Ghana. This study aims to answer the question, “What are the critical success factors (CSFs) that can assist reduce cost overruns in public sector infrastructure projects in the Ghanaian construction industry?”

Design/methodology/approach

This study used a quantitative survey method. The questionnaire was pre-tested by interviewing 15 contractors to ascertain the validity of the content. Factor analysis and multiple regression were adopted to analyze the data.

Findings

This study discovered that the critical factors that can reduce cost overruns in construction projects in Ghana are directly linked to five themes: early contractor involvement in the project planning stage, adequate funding, good project team relations, competent managers/supervisors and project participant incentives/bonuses. This study identifies indestructible, empirically measurable important success criteria for reducing cost overruns in public building projects in Ghana.

Practical implications

When well thought through from the project initiation stage to completion, these critical successes can also be used to deal with damaging economic effects such as allocative inefficiency of scarce resources, further delays, contractual disputes, claims and litigation, project failure and total abandonment.

Originality/value

The uniqueness of this research resides in the fact that it is, to the best of the authors’ knowledge, a first-of-its-kind investigation of the CSFs for reducing cost overruns in public building projects in developing countries.

Details

Construction Innovation , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1471-4175

Keywords

Article
Publication date: 27 October 2022

Tigor Tambunan

This study aims to discover a practical and effective way to apply the quality cost concept in Strategic Cost Management (SCM) framework. The interaction of preventive, appraisal…

398

Abstract

Purpose

This study aims to discover a practical and effective way to apply the quality cost concept in Strategic Cost Management (SCM) framework. The interaction of preventive, appraisal and failure (PAF) activities in a company's internal value chain will be the starting point of SCM implementation.

Design/methodology/approach

This study begins by establishing value chain and quality costs as the scope of conceptual analysis. Discussions on the interrelationships between activities, quality and costs were gathered to clarify conceptual and practical gaps in the scope of the study. The PAF quality cost model is applied to find viable, practical solutions. The costs of activities will serve as performance indicators.

Findings

The PAF quality cost model depicts opportunities to lower costs and increase profit in a business simultaneously; current poor quality costs are the benchmark. Identifying PAF activities and costs in the business value chain and linking it with others is crucial in evaluating SCM applications. These linkages will generate a Quality Cost Chain (QCC). The leading indicator of improvement is a higher ratio between new possible failure costs (FC) and the combination of prevention and appraisal costs (PAC) than the current value, followed by a lower total quality cost (TQC). The subsequent attention is a lower ratio between the appraisal cost (AC) and prevention cost (PC). Mathematically, for assessing the operability of new quality-related activities, ΔPACnew < ΔFCnew, TQCnew < TQCcurrent, (FC/PC)new>(FC/PC)current and (AC/PC)new<(AC/PC)current are proposed as feasible conditional-quantitative improvement criteria.

Research limitations/implications

This study only discusses the relationship between quality costs and activities related to quality management in the PAF quality cost model, not cost behavior. This limitation opens up opportunities for future research that intends to link QCC with cost behavior in the context of managerial accounting and Strategic Cost Management. The use of QCC in certain industrial areas is the next research opportunity. The variety of PAF activities this study addresses originates from a wide range of industrial sectors; QCC research by sector may produce unique industrial quality cost phenomena.

Practical implications

QCC will make it easier for managers to evaluate how strategically their departments or activities contribute to quality costs at the departmental or organizational level, as well as to effectively and efficiently improve quality cost performance.

Originality/value

The quality-related activity and quality cost issues are still rarely treated as subjects of research studies in the field of Strategic Cost Management. Even so, the discussion tends to be very broad, complex and difficult to apply. This study combines a simple diagrammatic and mathematical approach to simplify the discussion and, at the same time, manage the value of strategic quality management.

Details

The TQM Journal, vol. 36 no. 3
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 29 March 2024

Zhuang Qian, Charles X. Wang and Haiying Yang

This research aims to empirically investigate the impacts of product and international diversification strategies on firm-level inventory performance.

Abstract

Purpose

This research aims to empirically investigate the impacts of product and international diversification strategies on firm-level inventory performance.

Design/methodology/approach

This study empirically examines the associations between product and international diversification strategies and inventory performance based on a sample of 64,124 observations across 7,367 US publicly traded firms between 1989 and 2019 from the COMPUSTAT Segment, Fundamental Annual and Fundamental Quarterly data files. We employ both linear and nonlinear regression models to perform our empirical analysis.

Findings

This research provides strong evidence that there exists a U-shaped relationship between unrelated product diversification and inventory level and a partially inverted U-shaped relationship between international diversification and inventory level. We also find a positive impact of related product diversification on inventory level, but there is no significant curvilinear relationship between related product diversification and inventory level.

Practical implications

Our research findings offer important insights into top management’s strategic planning for diversification strategies and operations manager’s inventory control policies to achieve the strategic fit between corporate diversification and inventory management.

Originality/value

Product and international diversification strategies not only play an essential role in the firm’s competitive advantage, but also have a significant influence on operations manager’s inventory decision. This research is among the first to systematically investigate how top management’s related product, unrelated product and international diversification strategies may have complex nonlinear impacts on inventory performance.

Details

International Journal of Operations & Production Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3577

Keywords

Open Access
Article
Publication date: 21 July 2022

Anna-Therése Järvenpää, Johan Larsson and Per Erik Eriksson

This paper aims to identify how a public client’s use of control systems (process, output and social control) affect innovation possibilities in construction projects.

Abstract

Purpose

This paper aims to identify how a public client’s use of control systems (process, output and social control) affect innovation possibilities in construction projects.

Design/methodology/approach

Semi-structured interviews about six infrastructure projects were conducted to identify respondents’ views on innovation possibilities. These possibilities were then analyzed from an organizational control perspective within principal–agent relationships between the Swedish Transport Administration (STA) and their contractors.

Findings

How the client uses control systems affects innovation possibilities. Relying on process control could negatively affect innovation opportunities, whereas output control could have a positive influence. In addition, social control seems to have a weak effect, as the STA appears not to use social control to facilitate joint innovation. Public clients must comply with the Public Procurement Act and, therefore, retain the requirements specified in the tendering documents. Much of the steering of the execution is connected to the ex ante phase (before signing the contract), which affects innovation possibilities in the design and execution phases for the contractor.

Research limitations/implications

This study was conducted with only one client, thus limiting its generalizability. However, the findings provide an important stepping stone to further investigation into balancing control systems and creating innovation possibilities in a principal–agent relationship.

Originality/value

Although public procurement has increasingly been emphasized as a major potential source of innovation, studying how a public client’s use of organizational control systems affects innovation possibilities in the construction sector has received scant attention.

Details

Construction Innovation , vol. 24 no. 7
Type: Research Article
ISSN: 1471-4175

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