Ashutosh Dixit

Customer Loyalty and Lifetime Value: An Empirical Investigation of Consumer Packaged Goods

It is traditionally accepted that customer loyalty is critical for a firms profitability. Recent research, however, questions the effects of customer loyalty on profitability. In light of this controversy, we examine the financial effects of customer loyalty using the framework of customer lifetime value (CLV). Our analysis reveals that in the area of consumer packaged goods, customer loyalty is positively associated with customer revenue and customer retention, both of which drive CLV. Thus, customer loyalty is indeed a predictor of long-term customer profitability to a firm. For marketers, customer loyalty continues to be a legitimate end goal to pursue in marketing management.

Chalkboards to Cybercourses: The Internet and Marketing Education

The Internet leads the way to ever-changing concepts in marketing education. The changing state of technology necessitates an equally rapid synthesis of literature. Our study serves as an investigation of research concerning the Internet and marketing education. We synthesize 77 articles featuring the Internet and marketing education and classify the literature into seven components. These areas include: 1) active learning, 2) Internet marketing degree requirement, 3) marketing department websites, 4) pedagogical obstacles, 5) student benefits and obstacles, 6) distance learning courses, and 7) the future of marketing education. We then systematically identify gaps in the research, in order to provide streams for future study in this evolving area. The emerging gaps include: e-ethics in marketing, collapsing international boundaries, technology and marketing department value, and the infinite “Internet2”. We ultimately address the state of Internet based education, and how the state of the field relates with the gaps in literature. Our research targets the marketing professor, doctoral students in marketing, and educational institutions, as each may be profoundly impacted by the body of knowledge that has emerged as marketing classrooms have evolved from the “chalkboard to the cybercourse”.

Integrating Internet Technology in Marketing Research Education

This paper considers the applications and implications of Internet technology in an essential aspect of any marketing curriculum: Marketing Research education. A review of relevant literature on the use of technology and the Internet in marketing education is presented and current and potential issues are discussed from evaluation, strategic, and implementation perspectives. The outline follows the marketing research process and the major topics that are standard in a marketing research course. The authors discuss each phase and demonstrate the use of Internet technology for each. Most implications apply to distance education initiatives as well as classroom-based efforts.

Application of customer lifetime value model in make-to-order manufacturing

Purpose – The applicability of the customer life time value (CLV) concept goes beyond consumer markets. Specifically, the purpose of this paper is to show how a make-to-order manufacturing company in a supply chain can set customer-focus manufacturing strategies using CLV. Design/methodology/approach – Data from an integrated steel plant is used to calculate the life time value of customers based on the past value, the potential value, and their loyalty. The past value of a customer is based on the historical data and the future value of a customer is then forecasted. The loyalty index of a customer is determined by survey results. Findings – In general, it was found that the CLV for the most valuable customers increases exponentially and the top 28 percent of customers constitute 80 percent of the total value of all customers. Research limitations/implications – This study focuses on make-to-order manufacturing organizations and the three strategies suggested for business process improvement need to be r...

Aggressive and Predatory Pricing: Insights and Empirical Examination in the Airline Industry

The authors advance the understanding of predatory pricing through an examination of the Supreme Courts elements for proving allegations of such conduct in the marketplace. On the basis of recent research in economics, marketing, and other fields and a 2001 U.S. Department of Transportation report, the authors offer several insights into understanding and applying these elements in the airline industry. Drawing on these insights, the authors conduct empirical research to examine patterns of market power on the part of major airlines in selected hub airports and the pricing response to the entry of discount airlines over time on the part of a major airline. They also examine the relationship between market power and pricing-related conduct through a simultaneous equation model. Findings from these analyses yield insights into understanding aggressive and predatory pricing in the airline industry.

Price Dispersion in the Airline Industry: A Conceptual Framework and Empirical Analysis

Price dispersion can influence product demand, firm profitability, and social welfare. The authors develop a framework centered on understanding the effects of competition and market structure on price dispersion. An empirical analysis evaluates the effects of competition in a multi-market context on price dispersion in the airline industry by focusing on competition and market characteristics. The results of this study show that multi-market contact between rival firms and the interaction of multi-market contact and market concentration have significant effects on price dispersion. This study provides valuable insights for developing marketing strategies and extends the stream of research on price dispersion.

Psychological influences on customer willingness to pay and choice in automated retail settings: Context effects, attribute framing, and perceptions of fairness

Purpose - – The purpose of this paper is to investigate the influence of price attribute framing and factors such as urgency and perceived price fairness on customer willingness to pay (WTP) in automated retail settings. Design/methodology/approach - – The authors conducted two sets of quasi-experimental scenarios surrounding vending-machine purchase decisions. The first set was analyzed with MANOVA, the second set with choice-based conjoint (CBC) analysis. Findings - – When prices are framed positively (as a discount), customer WTP is higher at high published price levels than it is for unframed or negatively framed prices. The effect on WTP holds whether the reference price range is broad (few large increments) or narrow (numerous small increments). In the CBC scenarios, immediate availability of the product was most influential on choice, followed by price and brand effects. These findings held under conditions invoking both urgency and price fairness. Providing an explanation for higher prices increases perceived price fairness. Research limitations/implications - – Further study might assess the presence or absence of interaction effects in the conjoint scenarios. Practical implications - – Managers should consider transparency in dynamic pricing, particularly when the price change is outside the control of the firm. The conjoint scenario results also offer evidence that dynamic pricing will not impact other marketing-mix decisions for fast-moving consumer goods (FMCG) dramatically (availability at point of purchase and presence in the consumer consideration set remain strong influences on choice). Social implications - – Understanding these effects on WTP could help managers manage perceptions of unfairness and optimize WTP. Originality/value - – A theoretical contribution from this study is that the immediate loss/gain consideration under theories of decision making under uncertainty outweigh considerations such as scarcity urgency or perceived unfairness. Use of conjoint analysis in WTP research, study of dynamic pricing in FMCG setting.

Understanding Differences in Customer Willingness to Pay (WTP): Context Effects, Attribute Framing, and Perceptions of Fairness

Researchers in marketing have studied customer willingness to pay (WTP) for a variety of goods and services extensively. However, to date there has been limited empirical investigation of environmental factors such as need urgency (demanddriven or circumstantial scarcity of a desired good or service) and agency (whether the purchaser is spending her own money to make the purchase, or money provided by someone else, such as an employer). In addition, factors such as the way price information is framed may have an effect on customer WTP, as might the presentation of incidental price information. In addition, the perceived fairness of a price, or of a change (particularly an increase) in price, may have an effect on customer WTP under some circumstances. Understanding the effect of need urgency, agency, framing, reference pricing, and perceived fairness on customer WTP could help managers optimize pricing and (in the case of fairness) firm reputation.