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This paper aims to assess the usefulness of cost‐to‐serve for customer profitability management through literature review and a case study in a food‐industry company.

The research is based on a case study. The study presents the state‐of‐the‐art of the literature review related to cost‐to‐serve measurement and customer profitability analysis and a case study of a Brazilian food‐industry company with high operational complexity and an extensive customer product and commercial service line.

The literature review demonstrates that few empirical studies have actually addressed the problem of cost‐to‐serve measurement and customer profitability analysis. The findings of the study show that the measurement of cost‐to‐serve provides specific and detailed customer information that enables a more comprehensive customer profitability analysis than the classical paradigm.

A single case study does not allow the results to be generalized to other organizations.

The paper includes a comprehensive review of literature and the empirical case study in a Brazilian food company offers additional insights in cost‐to‐serve measurement and customer profitability analysis.

The article seeks to assist managers in low‐margin markets to grow profitability by applying principles of profit leverage.

The paper identifies a series of principles for targeting market segments and growing profits.

Gross margins are usually taken for granted by managers, but are actually key indicators of the types of marketing strategies – what the author calls “gross profit strategies” – that managers should use to leverage the growth of gross profit. Two general classes of gross profit strategies are identified – volume‐driven, and price/bundling gross profit strategies. The latter is particularly applicable to managers in low‐margin markets. The paper also discusses four subsidiary gross profit strategies and illustrates with examples of real‐world firms and situations.

The paper defines market‐driven costing and stresses the importance of measuring “true” gross margins, by measuring costs based on the cost to serve the customer, including opportunity costs. Finally, the paper explicates the relationship between true gross margins and managers' perceptions of their competitive ability to compete in the marketplace.

The purpose of this paper is to investigate how firms attempt to increase the profitability of specific groups of extant customers by achieving adjustments in customer behaviour that consequently lead to reduced costs associated with serving these customers.

The paper takes the form of multiple case studies in the retail banking sector. Three specific initiatives launched by European retail banks for the stated (partial) purpose of modifying customer behaviour in order to reduce customer‐related costs are evaluated.

The findings from the three case studies show that strategies that aim to modify customer behaviour in a positive way can successfully decrease the costs of interacting with customers while at the same time maintaining and even increasing customer retention and customer‐related revenues.

This study is limited to an assessment of three initiatives carried out by three European banks. The findings bring the issue of costs into customer relationship management in a constructive manner, abandoning the view of cost reductions as a necessary evil or drastic measure to handle problematic customers.

Marketing and customer relationship managers who consider strategies to change customer behaviour in a cost‐reducing way as a complement to traditional revenue and loyalty enhancement strategies will expand their opportunities to achieve increases in customer lifetime value (CLV) and customer equity (CE).

The paper reclaims the management of costs as a key customer management activity, thereby answering calls for more attention to cost issues in marketing.

The interaction between customer service policy, as defined by the in‐transit delivery lead time component of the order cycle and the design of least cost distribution systems is examined. A broader view of the distribution system design problem than previously taken in the literature is given and both the firm′s network strategy (number and location of facilities) and transportation strategy (mode/method of shipment) into the planning process are incorporated. Procedures for incorporating customer service policy into the distribution system design process are discussed; the effect of alternate customer service definitions on the least cost distribution system design are evaluated; and new mathematical procedures that integrate customer service policy, network strategy and transportation strategy into a comprehensive planning model are provided. Example problems in the text illustrate the potential benefit of accepting premium transportation costs in return for reduced facility proximity to customers.

Differentiation and revenue growth have heretofore been the focus of marketing practice in large Western companies. That focus is unlikely to work well as growth slows in aging Western markets and volume growth comes from more price sensitive emerging markets. Successful companies will need to deliver not just better products, but better value for money. That will require integrating marketing and operational choices to achieve greater cost-effectiveness. Pricing professionals are uniquely positioned to facilitate that integration and thus to become more involved in defining a profitable strategic focus for their companies. To fulfill that role, they will need to define and target market segments that reflect not just differences in growth potential and “unmet needs,” but also each segment’s “strategic fit” with the firm’s capabilities.

The main objective of this study is to initiate general building cost indicators to serve as cost indicators for the construction industry in Egypt. The two models (Egypt 1 and Egypt 2 Indices) developed for building the indices in this paper have been derived based on the “Engineering News Record” (ENR) Indices model with modifications to better suit the Egyptian market. Egypt 1 Indices is comprised of three indices which serve as a general cost indicator for the construction industry price movement in Egypt. Egypt 2 Indices is comprised of two indices which serve as a construction cost indicator for the reinforced concrete structures price movement in Egypt. The period analyzed in this research is 11 years (1988 through to 1998). The validation of index numbers produced showed that each index does indeed represent the respective type of building for which it was computed. Further, the analysis of Egypt Indices compared to the ENR Indices revealed that both indices exhibited trends that are generally similar from the year 1992 up to 1998.

Purpose: The purpose is to introduce the fundamental economic concepts that must be wrestled with the incorporation of robots, artificial intelligence and service automation (RAISA) into the travel, tourism and hospitality industries.

Design/methodology/approach: This chapter uses cost-benefit analytical framework of the incorporation of RAISA technologies into travel, tourism and hospitality industries.

Findings: The chapter elaborates on the economic fundamentals of RAISA adoption into the travel, tourism and hospitality industries. The analysis reveals that many financial and non-financial costs and benefits need to be considered when taking a decision to use RAISA technologies. Automation of tasks leads to simultaneous substitution and enhancement of human employees. Introduction of RAISA technologies results on inevitable deskilling of some and upskilling of other tourism and hospitality jobs.

Research limitations/implications: The chapter is conceptual and conclusions are limited by the views and interpretations of the authors.

Practical implications: RAISA technologies will become increasingly omnipresent in the travel, tourism and hospitality industries. That is why an understanding of the costs and benefits and many of the practical impediments to the incursion of RAISA into the workplace should be understood to make a transition from human-performed tasks to technology-performed tasks.

Social implications: Replacement of human labour will have significant social implications for the workforce and employers.

Originality/value: This is one of the few publications that discuss the economic aspects of the incorporation of RAISA technologies into travel, tourism and hospitality industries.

Imagine the reaction of your company's sales force when you tell them they are losing money selling to Wal‐Mart. To counter their objections, you explain the final delivered product cost exceeds the revenue generated by Wal‐Mart sales. The scenario may seem unrealistic based on the sales volume of mass merchant discounters such as Wal‐Mart, Kmart, and Target; however, manufacturers frequently do not know the cost to serve these merchants or the cost of the functions being shifted backwards in the supply chain. Additional services increase the cost of serving the big retail accounts and jeopardize supplier profitability. While it is understandable that retailers want to lower their costs by eliminating tasks they perform, retailers also need their suppliers to obtain a reasonable margin to ensure the availability of product from a high quality supplier. It is necessary to ensure that selling to these large retail accounts is profitable by determining the costs of serving them.

The purpose of this paper is to describe the interactions between accounting and marketing activities in a Taiwanese telecommunication firm by demonstrating the dramatic impact that improved costing methods had on the firm’s customer portfolio management activities and consequently on the firm’s bottom line.

The paper presents a case study of a firm in the highly competitive telecommunications industry in Taiwan. The case study was constructed by interviewing key individuals within the organization over an extended period and supplementing those reports with an analysis of internal company documents.

The firm dramatically increased profitability through the integration of activity-based costing into their customer portfolio framework requiring marketing and accounting functions to work closely together. In this rapidly evolving market, cost allocation and customer portfolio management are indispensable. Identifying accurate costs and keeping key customers is a critical issue for the case company. While theoretically the approach is simple, in practice considerable hurdles needed to be overcome.

While considerable literature suggests that customer profitability drives the management of an organization’s customer portfolio, critical to the success of such an endeavor is the accurate calculation and allocation of costs to individual customers. As an interdisciplinary study, this paper provides insights for both accounting and marketing highlighting their reliance on each other in a sound firm. The results of this paper will serve as a supplement to past customer portfolio management research as well as a reference for any firm seeking to enhance their approach to portfolio management.

This paper aims to take note of the need to better understand cost consciousness from a management accounting perspective and serves as an exploratory study striving to analyze how the notion has been addressed by management accounting scholars.

This paper presents the findings of a thorough literature review identifying the drivers, interpretations, definitions and results which management accounting scholars have associated with cost consciousness.

This paper has synthesized the definitions and interpretations by considering their conceptual broadness and the subjects that cost consciousness characterizes. In addition, various potential drivers of cost consciousness have been identified where management control systems play a major role. Also, this paper summarizes both the positive and negative outcomes which scholars seem to expect from an increase of cost consciousness.

Given that no prior work has focused on the conceptual development of cost consciousness, it was necessary to infer most of the interpretations, drivers and results which management accounting scholars have associated to the cost consciousness notion.

Cost consciousness is a concept that appears in hundreds of peer-reviewed articles on management accounting. However, only a handful of management accounting scholars have defined or evaluated this concept to a certain degree. As a result, what management accountants believe cost consciousness to be, how it is driven and what result may be expected from it, is nowhere to be found in any synthesized manner. The findings of this paper develop the concept of cost consciousness by illuminating the common use of the construct across various disciplines.