Capturing Customer Heterogeneity Using A Finite Mixture Pls Approach
Michael D. Johnson,
Andreas Herrmann and
Schmalenbach Business Review (sbr), 2002, vol. 54, issue 3, 243-269
An approach for capturing unobserved customer heterogeneity in structural equation modeling is proposed based on partial least squares. The method uses a modified finite-mixture distribution approach. An empirical analysis using quality, customer satisfaction and loyalty data for convenience stores illustrates the advantages of the new method vis-à-vis a traditional market segmentation scheme based on well known grouping variables. The results confirm the assumption of heterogeneity in the individuals’ perception of the antecedents and consequences of satisfaction and their relationships. The results also illustrate how the finite-mixture approach complements and provides insights over and above a traditional segmentation scheme.
JEL-codes: M31 C11 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sbr:abstra:v:54:y:2002:i:3:p:243-269
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