TOTAL COST OF OWNERSHIP IN SALES AND MARKETING
2015
Background: There is an internal belief within Axis that despite their products’ relatively high
initial price, the total cost of ownership (TCO) of an Axis camera solution is lower
than that of other brands. However, there is no internal research or tools to verify if
it is true. Without this, Axis is unable to communicate their belief in an educated
and quantifiable way, which is desired in sales and marketing situations.
Purpose: The purpose of this master thesis is to create a TCO analysis framework for a
network based video surveillance solution from a seller perspective. The framework
is then to be applied on Axis’s solutions to identify and weigh the most important
parameters that affect the TCO. Based on this, a TCO analysis model that can be
used by Axis’s sales force is to be developed.
Methodology: The overall methodology used in the project is action research in combination with
descriptive, exploratory and problem-solving approaches depending on the specific
research question. The theoretical methodologies have been integrated with a TCO
development and implementation framework, which has formed the research
process.
Conclusions: Existing literature offers a range of TCO frameworks, but little research has been
done regarding TCO from a seller perspective. A TCO analysis is very case specific,
why generic models are not appropriate. A new framework for the development of
a TCO sales tool is therefore proposed, which is adapted and provides detailed
guidelines to the network camera surveillance industry. Using this framework, more
than 50 cost factors that affect the TCO of a camera solution have been identified
and categorised. These were then implemented into a sales tool that can be used to
analyse and demonstrate costs and benefits.
The significance of the cost factors affecting the TCO for a camera solution varies a
lot. For sales and marketing purposes, the parameters that the company can
influence and that differentiate a product from another should be emphasised. The
benefits for companies to utilise TCO in sales and marketing are several, even
though there are some distinct barriers to overcome. For Axis, the developed TCO
sales tool can be a strategic resource to help convince its customers to shift their
focus from a low-price mind-set to a pursuit of low-cost solutions.
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