A dynamic decision support system to predict the value of customer for new product development

In recent years, firms have focused on how to enter markets and meet customer requirements by improving product attributes and processes to boost their market share and profits. Consequently, market-driven product design and development has become a popular topic in the literature. However, past research neither covers all of the major influencing factors that together drive customers to make purchase decisions, nor connects these various influencing factors to customer purchasing behavior. Past studies further fail to take the time value of money and customer value into consideration. This study proposes a decision support system to (a) predict customer purchasing behavior given certain product, customer, and marketing influencing factors, and (b) estimate the net customer lifetime value from customer purchasing behavior toward a specific product. This will not only enable decision-makers to compare alternatives and select competitive products to launch on the market, but will also improve the understanding of customer behavior toward particular products for the formulation of effective marketing strategies that increase customer loyalty and generate greater profits in the long term. Decision-makers can also make use of the system to build up confidence in new product development in terms of idea generation and product improvement. The application of the proposed system is illustrated and confirmed to be sensible and convincing through a case study.     

Item-level RFID for enhancement of customer shopping experience in apparel retail

In the customer-oriented apparel retail industry, providing satisfactory shopping experience for customers is a vital differentiator. However, traditional stores generally cannot fully satisfy customer needs because of difficulties in locating target products, out-of-stocks, a lack of professional assistance for product selection, and long waiting for payments. Therefore, this paper proposes an item-level RFID-enabled retail store management system for relatively high-end apparel products to provide customers with more leisure, interaction for product information, and automatic apparel collocation to promote sales during shopping. In this system, RFID hardware devices are installed to capture customer shopping behaviour and preferences, which would be especially useful for business decision-making and proactive individual marketing to enhance retail business. Intelligent fuzzy screening algorithms are then developed to promote apparel collocation based on the customer preferences, the design features of products, and the sales history accumulated in the database. It is expected that the proposed system, when fully implemented, can help promote retail business by enriching customers with intelligent and personalized services, and thus enhance the overall shopping experience.     

An empirical study on Web-based services and customer loyalty

E-business success is tied to the ability to foster customer loyalty. Businesses that deliver superior value derived from excellent services and quality products are likely to win customer loyalty. This paper examines Web-based services and the effects of three sets of factors: pre-purchase, transaction-related, and post-purchase services on customer loyalty (measured as repeat purchase intention from a given Web-based store) in a business-to-consumer environment. Based on the study's results, pre-purchase services that support search and evaluation of products replete in e-commerce systems have limited effect on customer loyalty. Among transaction-related services, transparency of the billing mechanism positively impacts customer loyalty. Customers shun any hidden costs associated with product acquisition. Post-purchase services consisting of support of order tracking, on-time delivery, and customer support positively influence customer loyalty. These findings imply that Web-based stores need to pay more attention to post-purchase services in their strategy to retain customers. This is what will keep customers satisfied and willing to continue the relationship with a company over the long term.     

Hybrid recommendations for mobile commerce based on mobile phone features

Mobile data communications have evolved as the number of third generation (3G) subscribers has increased. The evolution has triggered an increase in the use of mobile devices, such as mobile phones, to conduct mobile commerce and mobile shopping on the mobile web. There are fewer products to browse on the mobile web; hence, one‐to‐one marketing with product recommendations is important. Typical collaborative filtering (CF) recommendation systems make recommendations to potential customers based on the purchase behaviour of customers with similar preferences. However, this method may suffer from the so‐called sparsity problem, which means there may not be sufficient similar users because the user‐item rating matrix is sparse. In mobile shopping environments, the features of users' mobile phones provide different functionalities for using mobile services; thus, the features may be used to identify users with similar purchase behaviour. In this paper, we propose a mobile phone feature (MPF)‐based hybrid method to resolve the sparsity issue of the typical CF method in mobile environments. We use the features of mobile phones to identify users' characteristics and then cluster users into groups with similar interests. The hybrid method combines the MPF‐based method and a preference‐based method that uses association rule mining to extract recommendation rules from user groups and make recommendations. Our experiment results show that the proposed hybrid method performs better than other recommendation methods.     

The Effects of Customer Value on Loyalty and Profits in a Dynamic Competitive Market

Providing high value products and services to customers normally leads to customer loyalty and profits. In practice, the relationship of customer value, loyalty, and profits can be observed in the market. However, the dynamic interactive relationships which lead to customer loyalty and profits still remain ambiguous. In this paper, the Agent-Based Computational Economics (ACE) model is introduced to explore the formation of customer loyalty in the Taiwanese imported lumber market. Using agents with reinforced learning algorithms in trading simulations, the effects of customer value on loyalty and profit are incorporated and examined in this interactive dynamic model. As results, the positive correlations among variables of customer value, loyalty, and profits are observed. A controlled experiment shows that changing customer value leads to changes in customer loyalty and profits, but price is not the determinant factor for improving customer loyalty. The R ² values of customer loyalty and profits elucidate that they are increasing as the time lapsed elongate. Providing high value of products and services is a better strategy for suppliers to attract potential loyal customers.      

A UNIFIED FRAMEWORK OF TARGETED MARKETING USING CUSTOMER PREFERENCES

One of the fundamental tasks of targeted marketing is to elicit associations between customers and products. Based on the results from information retrieval and utility theory, this article proposes a unified framework of targeted marketing. The customer judgments of products are formally described by preference relations and the connections of customers and products are quantitatively measured by market value functions. Two marketing strategies, known as the customer‐oriented and product‐oriented marketing strategies, are investigated. Four marketing models are introduced and examined. They represent, respectively, the relationships between a group of customers and a group of products, between a group of customers and a single product, between a single customer and a group of products, and between a single customer and a single product. Linear and bilinear market value functions are suggested and studied. The required parameters of a market value function can be estimated by exploring three types of information, namely, customer profiles, product profiles, and transaction data. Experiments on a real‐world data set are performed to demonstrate the effectiveness of the proposed framework.     

Feature-based recommendations for one-to-one marketing

Most recommendation systems face challenges from products that change with time, such as popular or seasonal products, since traditional market basket analysis or collaborative filtering analysis are unable to recommend new products to customers due to the fact that the products are not yet purchased by customers. Although the recommendation systems can find customer groups that have similar interests as target customers, brand new products often lack ratings and comments. Similarly, products that are less often purchased, such as furniture and home appliances, have fewer records of ratings; therefore, the chances of being recommended are often lower. This research attempts to analyze customers' purchasing behaviors based on product features from transaction records and product feature databases. Customers' preferences toward particular features of products are analyzed and then rules of customer interest profiles are thus drawn in order to recommend customers products that have potential attraction with customers. The advantage of this research is its ability of recommending to customers brand new products or rarely purchased products as long as they fit customer interest profiles; a deduction which traditional market basket analysis and collaborative filtering methods are unable to do. This research uses a two-stage clustering technique to find customers that have similar interests as target customers and recommend products to fit customers' potential requirements. Customers' interest profiles can explain recommendation results and the interests on particular features of products can be referenced for product development, while a one-to-one marketing strategy can improve profitability for companies.     

The Effect of Product Type on Consumer Preferences for Website Content Elements: An Empirical Study

This study attempts to demonstrate empirically how the importance of website content in online purchasing varies across 2 product categorizations: goods versus services and hedonic versus utilitarian products. We conducted an experiment that showed that when purchasing services, customers value evaluative elements and risk‐reducing content, while consumers buying goods may be satisfied with fewer features. In addition, selling hedonic products could be more effective when focusing on large and unique assortment. Websites selling utilitarian products, on the other hand, may profit from investing in instrumental website content. The study validates the guiding role of product type in website design, and suggests that incorporating product tactics into design likely contributes to the development of websites tailored to specific consumer groups.     

Intelligent agent-based systems for personalized recommendations in Internet commerce

The prosperity of electronic commerce has changed the traditional trading behaviors and more and more people are willing to conduct Internet shopping. However, the exponentially increasing information provided by the Internet enterprises causes the problem of overloaded information, and this inevitably reduces the customer's satisfaction and loyalty. One way to overcome such a problem is to build personalized recommender systems to retrieve product information that really interests the customers. For products that people may purchase relatively often, such as books and CDs, recommender systems can be built to reason about a customer's personal preferences from his purchasing history and then provide the most appropriate information services to meet his needs. On the other hand, for those commodities a general customer does not buy frequently, for example computers and home theater systems, more appropriate are the kinds of recommender systems able to retrieve optimal products based on the customer's current preferences obtained from the iterative system–customer interactions. This paper presents the above two kinds of recommender systems we have developed for supporting Internet commerce. Experimental results show the promise of our systems.     

Investigation into waiting time,self‐service technology,and customer loyalty: The mediating role of waiting time in satisfaction

This study examines customer satisfaction with waiting time (WT) and customer loyalty (CL) relationships in the airline industry. The mediating influence of waiting time satisfaction (WTS) in the self‐service technology (SST) and CL relationship was also examined. Seven hundred fifty structured questionnaires were administered at Sabiha Gökçen, and Instabul international airports in Turkey and partial least square–structural equation modeling were employed for the model analysis. The findings reveal that SST, perceived, retrospective, and prospective WTs are major determinants of WTS. Furthermore, SST and WTS were found to have a linear and significant positive influence on CL. Therefore, this study suggests that the airport management should identify the causes of WT, make the waiting environment conducive for the customers, make the WT inconsequential to the customers, and enhance their loyalty to the airport.     

Group RFM analysis as a novel framework to discover better customer consumption behavior

The RFM model provides an effective measure for customers’ consumption behavior analysis, where three variables, namely, consumption interval, frequency, and money amount are used to quantify a customer’s loyalty and contribution. Based on the RFM value, customers can be clustered into different groups and the group information is very useful in market decision making. However, most previous works completely left out important characteristics of purchased products, such as their prices and lifetimes, and apply the RFM measure on all of a customer’s purchased products. This renders the calculation of the RFM value unreasonable or insignificant for customer analysis. In this paper, we propose a new framework called GRFM (for group RFM) analysis to alleviate the problem. The new measure method takes into account the characteristics of the purchased items so that the calculated the RFM value for the customers are strongly related to their purchased items and can correctly reflect their actual consumption behavior. Moreover, GRFM employs a constrained clustering method PICC (for Purchased Items-Constrained Clustering) that could base on a cleverly designed purchase pattern table to adjust original purchase records to satisfy various clustering constraints as well as to decrease re-clustering time. The GRFM allows a customer to belong to different clusters, and thus to be associated with different loyalties and contributions with respect to different characteristics of purchased items. Finally, the clustering result of PICC contains extra information about the distribution status inside each cluster that could help the manager to decide when is most proper to launch a specific sales promotion campaign. Our experiments have confirmed the above observations and suggest that GRFM can play an important role in building a personalized purchasing management system and an inventory management system.     

基于客户喜好的双向个性化推荐算法

为了解决现有推荐算法仅考虑同类产品间单向推荐所缺乏的灵活性,提升产品的销量及用户的购物体验,提出一种基于客户喜好的双向个性化推荐算法,不仅可以为客户精准推荐产品,还可以为商家推荐潜在客户.首先,基于产品购买网络中客户及其邻居的购买信息,扩展客户购买信息;其次设计客户产品喜好权重计算办法,分析客户的购买喜好,并在客户喜好的指导下为客户提供个性化的产品推荐;最后,基于商家提供的样本客户,挖掘与样本客户相似的客户构成社区,为商家提供潜在客户推荐以及精准客户维护.在真实数据集上的实验验证了算法的有效性.该算法从客户和商家两个维度出发实现了产品与客户的双向推荐,为个性化推荐领域的研究提供有益的帮助.     

The Mechanisms through Which Certain Variables Influence Customer Loyalty: The Mediating Roles of Perceived Value and Satisfaction

This study surveyed 123 bank users who experienced problems with their banks’ online banking services, with the aim of understanding the mechanisms through which certain variables influence customer loyalty. Principally, the possible mediating roles of value and satisfaction on the relationships between recovery and loyalty and between ISO 9001 and loyalty were scrutinized. The dimensionalities of the scales were assessed using exploratory and confirmatory factor analysis. Thereafter, structural equation modeling and multiregression analyses were used to test the proposed model. The overall results showed that service recovery can be used to enhance customers’ satisfaction and perception of value and, therefore, customer loyalty. This study also confirmed the partial mediating roles of customers’ satisfaction and perception of value in the relationship between service recovery and loyalty. In contrast, ISO 9001 has no influence on perceived value, satisfaction, and loyalty; the mediating roles of both perceived value and satisfaction were not supported in the relationship between ISO 9001 and loyalty. In practice, even though ISO 9001 appeared to offer few extras to satisfy and retain customers, its use is still advisable because of the other potential benefits that it provides.     

Customer satisfaction‐aware scheduling for utility maximization on geo‐distributed data centers

With the increasingly growing amount of service requests from the world‐wide customers, the cloud systems are capable of providing services while meeting the customers' satisfaction. Recently, to achieve the better reliability and performance, the cloud systems have been largely depending on the geographically distributed data centers. Nevertheless, the dollar cost of service placement by service providers (SP) differ from the multiple regions. Accordingly, it is crucial to design a request dispatching and resource allocation algorithm to maximize net profit. The existing algorithms are either built upon energy‐efficient schemes alone, or multi‐type requests and customer satisfaction oblivious. They cannot be applied to multi‐type requests and customer satisfaction‐aware algorithm design with the objective of maximizing net profit. This paper proposes an ant‐colony optimization‐based algorithm for maximizing SP's net profit (AMP) on geographically distributed data centers with the consideration of customer satisfaction. First, using model of customer satisfaction, we formulate the utility (or net profit) maximization issue as an optimization problem under the constraints of customer satisfaction and data centers. Second, we analyze the complexity of the optimal requests dispatchment problem and rigidly prove that it is an NP‐complete problem. Third, to evaluate the proposed algorithm, we have conducted the comprehensive simulation and compared with the other state‐of‐the‐art algorithms. Also, we extend our work to consider the data center's power usage effectiveness. It has been shown that AMP maximizes SP net profit by dispatching service requests to the proper data centers and generating the appropriate amount of virtual machines to meet customer satisfaction. Moreover, we also demonstrate the effectiveness of our approach when it accommodates the impacts of dynamically arrived heavy workload, various evaporation rate and consideration of power usage effectiveness. Copyright © 2014 John Wiley & Sons, Ltd.     

The effects of relationship benefit on relationship quality and store loyalty from convergence environments—NPS analysis and moderating effects

The primary concern of CRM is core customers from convergence environments. They show such passionate partnership with the company that they actively put forth their opinion to improve products and service through voluntary pro-company activities and participate in the development of new products through open innovation. Therefore, the top priority of a company should be given to defining its core customers and accurately understanding and managing them, which would contribute to the growth of the company. This study has the purpose to identify net promoter score (NPS) of company by adopting index that evaluates the degree of customer loyalty to the company in judging the relationship of company and customer, and later on establish strategy to increase the number of loyal customers by classifying customers by the score. It has become more important nowadays how to manage a long-term customer relationship, for it can assure the company of increased income in spite of steep competition with rival companies. Therefore strong customer relationship is an important means of proving the company with competitive edge and maximizing company income. In addition, as NPS serves as adjustment variable, net promoters were analyzed to contribute to store loyalty significantly. The way for bookstore ‘A’ to grow as a company with potential for future growth would be re-establish customers through one more in-depth analysis of customers as well as seek for methods to raise NPS.     

iValue: A knowledge-based system for estimating customer prospect value

In the past, companies changed their focus from product-oriented within marketing to demand-oriented within quality improvement. Today, they emphasize customer service, customer loyalty, and customer profitability. The significance of customer-centric services has become critical and essential. However, certain research which investigates the effect of customer lifetime value focuses only on lifetime values of existing customers. This study devises a novel model to predict customers’ prospect value. In the proposed model, we utilize the concept of finance which stands in the current status and predicts future value based on historical data. The simulated results reveal that, in a long-term simulation, customer prospect value rises when reach rate increases. Decreasing reach rate and costs result in high customer prospect value; however, the value of customer prospect value decreases in a long-term simulation. The new model complements the existing customer lifetime value model from a different perspective and provides clues to customer value for future researches.     

Which is more important in Internet shopping,perceived price or trust?

Price and trust are considered to be two important factors that influence customer purchasing decisions in Internet shopping. This paper examines the relative influence they have on online purchasing decisions for both potential and repeat customers. The knowledge of their relative impacts and changes in their relative roles over customer transaction experience is useful in developing customized sales strategies to target different groups of customers. The results of this study revealed that perceived trust exerted a stronger effect than perceived price on purchase intentions for both potential and repeat customers of an online store. The results also revealed that perceived price exerted a stronger influence on purchase decisions of repeat customers as compared to that of potential customers. Perceived trust exerted a stronger influence on purchase decisions of potential customers as compared to that of repeat customers.     

How to Improve E‐Satisfaction and E‐Loyalty and Strengthen the Links Between Them: Value From Regulatory Fit

This article aims to investigate how regulatory fit can improve e‐satisfaction and e‐loyalty and strengthen the links between e‐satisfaction and both its antecedents (two technology acceptance model factors and the perceived quality of e‐shopping) and consequence (e‐loyalty). The research model and hypotheses are constructed through a literature review. An empirical study is performed to test the proposed research model, using survey research. The data are gathered via a questionnaire, which is developed on the basis of prior empirical studies. Results from this study point to the following: first, the two technology acceptance model factors and the perceived quality of e‐shopping significantly affect e‐satisfaction, which in turn e‐loyalty. Second, regulatory fit not only improves e‐satisfaction and e‐loyalty but also strengthens the links between e‐satisfaction and both its antecedents and consequence. On the basis of these findings, the implications are discussed and directions for future research are highlighted.