Customer Choice Variability and Profit Optimization Modelling in a Firm: An Analytical Framework

Abstract:     
The customer value in terms of satisfaction is one of the indicators for building profit oriented strategies in a firm. The customer value concepts may be applied by the firms to evaluate the product performance in the given market and determine the approach for competitive advantage. The framework for measuring the customer values discussed in this paper provides analytical dimensions for establishing the long run customer relationship by the firm and to optimize its profit levels. The model discussed in the paper analyzes how external factors like a change in consumer interests and competitiveness affect the relationship between customer satisfaction and profit in a firm. The model discussed in the paper in relation to customer choice under difference value determinants offer more general understanding of why consumers, although purchasing essentially similar products.

Number of Pages in PDF File: 24

Keywords: Customer choice, customer value, retailing, decision modeling, profit optimization

JEL Classification: C51, D11, D91, I31, L81, M31

working papers series