A latent structure factor analytic approach for customer satisfaction measurement

The linkage of customer satisfaction, customer retention, and firm profitability has been well established in the marketing literature, and provides ample justification as to why customer satisfaction measurement (CSM) has been a focal point in marketing decision making. Although aggregate market level research on understanding the determinants of customer satisfaction is abundant, CSM decisions at segment level are possible only if the individual or market segment differences in the formation of overall satisfaction judgments and subsequent heterogeneity in the role these various determinants play are understood. Based on expectancy-disconfirmation theory in customer satisfaction, we propose a maximum likelihood based latent structure factor analytic methodology which visually depicts customer heterogeneity regarding the various major determinants of customer satisfaction judgments involving multiple attributes, and provides directions for segment-specific CSM decisions. We first describe the proposed model framework including the technical aspects of the model structure and subsequent maximum likelihood estimation. In an application to a consumer trade show, we then demonstrate how our proposed methodology can be gainfully employed to uncover the nature of such heterogeneity. We also empirically demonstrate the superiority of the proposed model over a number of different model specifications in this application. Finally, limitations and directions for future research are discussed.     

Unidimensional measurement and structural equation models with latent variables

This article considers various methods for constructing sets of multiple indicators that measures one and only one trait, i.e., unidimensional measurement. The article compares two procedures for constructing unidimensional measures: the modification index and tests designed specifically for assessing unidimensionality. The specific tests were shown to work better than the modification indices.     

Fitting and testing for the implied volatility curve using parametric models

Numerous issues have arisen over the past few decades relating to the implied volatility smile in the options market; however, the extant literature reveals that relatively little effort has thus far been placed into comparing the various implied volatility models, essentially as a result of the lack of any theoretical foundation on which to base such comparative analysis. In this study, we use a comprehensive options database and employ methods of combining the various hypothesis tests to compare the different implied volatility models. To the best of our knowledge, this is the first study of its kind to address this issue using combination tests. Our empirical results reveal that the linear piecewise model is the most appropriate model for capturing the implied volatility smile, with additional robustness checks confirming the validity of this finding.     

Integrated mixed logit and latent variable models

Extending the traditional discrete choice model by incorporating latent psychological factors can help to better understand the individual’s decision-making process and therefore to yield more reliable part-worth estimates and market share predictions. Several integrated choice and latent variable (ICLV) models which merge the conditional logit model with a structural equation model exist in the literature. They assume homogeneity in the part-worths and use latent variables to model the heterogeneity among the respondents. This paper starts from the mixed logit model that describes the heterogeneity in the part-worths and uses the latent variables to decrease the unexplained part of the heterogeneity. The empirical study presented here shows these ICLV models perform very well with respect to model fit and prediction.     

Customer satisfaction measurement and management: A processual analysis

Customer satisfaction (CS) measurement has been widely advocated as central to the pursuit of market orientation, total quality management, and competitive advantage by allowing management to monitor and improve performance in the terms most significant to customers. However, relatively little analytical attention has been devoted to the processual issues implicit in the adoption of CS measurement systems by organizations. This paper presents executive workshop data and new survey evidence to support the contention that both research and managerial agenda should be extended to recognize the multi‐dimensionality of organizational process, and the implications of that characteristic for the adoption and use of CS measurement systems.     

Issues in the estimation and application of latent structure models of choice

Our paper provides a brief review and summary of issues and advances in the use of latent structure and other finite mixture models in the analysis of choice data. Focus is directed to three primary areas: (1) estimation and computational issues, (2) specification and interpretation issues, and (3) future research issues. We comment on what latent structure models have promised, what has been, to date, delivered, and what we should look forward to in the future.     

Issues in fitting theoretical and measurement models in marketing

This article reviews the applications of linear structural equation modeling in business. It further examines the extent to which measurement models are constructed to fit theory models. The consensus appears to be that modelers intuitively use congeneric models without considering the appropriateness of such use. The other measurement models, such as tau equivalent or parallel form models are used very little in the literature. In addition, there is no use of common factor measurement models. The article also examines the extent to which various indices of fit are used in modeling marketing phenomena. Although chi square tests of model fit are used most frequently, the study documents increasing use of yet other indices, which perhaps more accurately reflect the extent to which the model fits.     

Productivity and externalities: models of export-led growth

In developing countries, successful export-led growth (ELG) industrialization has been associated with rapid structural change and productivity growth. There are major difficulties in explaining this performance using a standard neoclassical growth model. To develop a more satisfactory framework, we start from empirical and theoretical work with models incorporating externalities. We develop a simple analytical model with an export externality that captures the large increase in both total factor productivity and trade share associated with ELG. A second model is developed to decompose growth into various components: (i) factor accumulation, (ii) a factor reallocation effect from moving factors from low to high productivity sectors, (iii) an export externality effect arising from exporting light and heavy manufactures and (iv) an import externality effect arising from importing capital goods (heavy manufactures). The second model is implemented with data for an archetype semi-industrial country. In addition to accounting for the higher total factor productivity growth observed in countries pursuing ELG strategies, the model captures the patterns of structural change experienced by such countries better than simpler neoclassical models without disequilibrium features or externalities.     

Some observations on models of growth and distribution with autonomous demand growth

This paper offers some theoretical and methodological observations on a model of growth and distribution, recently developed by Franklin Serrano and others and called the Sraffian supermultiplier model, in which the growth of autonomous capitalist consumption demand and distribution are exogenously given and capacity utilization is at an exogenously given “normal” level in long‐run equilibrium. First, it provides a simple long‐run equilibrium version and dynamic formulation of the model, and compares it to other models of growth and distribution using a common framework and focusing on the effect of a change in income distribution on growth. Second, it shows that the model can be modified to examine other components of autonomous demand growth, including government spending, exports, consumption by workers, and investment and technical change, and to simultaneous multiple sources of autonomous demand growth. Finally, it comments on some methodological issues concerning the model, and on its implications for the notion of long‐run equilibrium.     

Efficiency and quality as economic dimensions of perceived value: Conceptualization,measurement, and effect on satisfaction

Perceived value has been analyzed from various perspectives, and a variety of typologies and dimensions have been suggested for the construct. Economic value is one of these types, which is posited in this study as being composed of two dimensions: efficiency and quality. Based on the typology of Holbrook [1999. Introduction to Consumer Value. In: Holbrook, M.B. (Ed.), Consumer Value. A Framework for Analysis and Research. London, pp. 1–28], the present study develops a conceptual framework and a measurement scale for these two components. The relationship between economic value and consumer satisfaction is also examined. The study also describes an empirical study that confirms the validity and usefulness of the proposed model. The results provide an operational tool for measuring economic value that will allow retailers to design suitable strategies for creating and delivering value to consumers. Furthermore, they demonstrate the usefulness of economic value as a concept in the study of consumer satisfaction.     

Trade,growth and consumption in alternative models of capital accumulation

This paper shows that some of the most interesting effects of international trade on capital accumulation are essentially the same in a range of different technologies: input-output models, vintage models, and the standard two-sector model. Trade and autarky equilibria are compared on the assumption that the rate of profit is the same in both cases. The effect of trade on intertemporal choice is analysed, with emphasis on the case where steady state consumption falls as a result of trade. Alternative saving assumptions are discussed.     

Service failure and recovery in using technology-based self-service: effects on user attributions and satisfaction

This study examines service failure and recovery in using technology-based self-service (TBSS) systems to determine the effects of a variety of relevant factors on negative customer/user attributions to the service provider, to employees who try to help in recovery, and to the technology itself, as well as the effects on customer/user satisfaction with the failure/recovery experience. The findings show that immediate recovery of TBSS failures reduces negative attributions and increases customer/user satisfaction with the experience, as does a low-anxiety environment around the kiosk. Technology error (as opposed to user error) decreases user satisfaction. Employee assistance decreases negative attributions to the employee but increases negative attribution to the technology. Some interactions were found among the experimental factors that are also meaningful.     

Trade,money and employment in intertemporal optimizing models of growth

This paper unites elements of Sidrauski's (1967) monetary model of growth, Ventura's (1997) analysis of the effects of international trade on growth, and some work on the labour market implications of growth by Barro and Sala-i-Martin (1995). It was shown by Ventura that, for a small economy, free international trade leads to an increase of the de facto elasticity of substitution between the domestic factors of production. The first part of the paper analyses how such an increase in the elasticity of substitution influences the steady state and the speed of convergence. From the Sidrauski model we know that money is super-neutral in the long-run but that monetary policy can have real effects along the transition path as long as the intertemporal elasticity of substitution is not equal to one. In the second part of this paper, it is shown how these results also depend on the elasticity of substitution between factors of production. The results give some important insights into possible interactions between monetary and trade policy in the long and short run. The last part of the paper deals with a modified version of the monetary growth model, which includes endogenous labour supply as in Klump (1993) or Barro and Sala-i-Martin (1995). In this context, international trade, by increasing the elasticity of substitution, leads to lower domestic employment in the long run whereas monetary policy may be able to increase employment at least in the short run. Thus, under certain circumstances, trade and monetary policy can be regarded as complementary with respect to their labour market effects.     

Human versus spatial dimensions of crowding perceptions in retail environments: A note on their measurement and effect on shopper satisfaction

Perceived retail crowding was originally conceptualized as having two dimensions, but subsequent empirical work in marketing has treated the construct unidimensionally. This paper reports a series of lab and field studies that examine the dimensionality of the construct and its relationship to store satisfaction. Two alternative crowding measures are tested. Results suggest that perceived retail crowding has distinct human and spatial dimensions that affect satisfaction differently.     

商业产业与区域经济增长关系的计量分析

利用商业产业与区域经济之间关系的简单计量方法,不仅可以研究一个国家、一个地区的商业,甚至是一个商业产业集群与区域内各个产业之间及区域经济整体之间的关系,而且可以进行跨地区的比较分析,以CD生产函数建立商业产出模型,用商业产业与相关产业互动发展和商业产业与区域经济增长率的因果关系检验,以此为商业产业发展的产业政策制定提供实行依据。     

Consumer participation in using online recommendation agents: effects on satisfaction,trust, and purchase intentions

Online product recommendation agents (RAs) are gaining greater strategic importance as a critical touch-point between marketers and consumers. Yet, the role of consumer participation in using RAs has not been examined. This study shows that greater consumer participation in using an RA leads to more satisfaction, greater trust, and higher purchase intentions, related to the RA and its recommendations. In contrast, the financial risk (associated with the product under consideration) reduces satisfaction, trust, and purchase intentions, and it also moderates the effect of consumer participation on these same variables. The findings extend the literature and suggest actionable implications for marketing strategy.     

Sustainable growth for the self-employed in the retail industry based on customer equity,customer satisfaction,and loyalty

In Korea, traditional retail districts face a serious situation whereby businesses in downtown areas face collapsing as local population declines: resulting in a decrease in self-employed sales and a declining local economy. Traditional retailers use ambiguous accounting and are reluctant to use credit cards, and thus, the overall reliability of their customer data is low. This paper solves this problem by applying the concept of customer equity (CE). We conducted an empirical analysis through questionnaires to identify differences in CE between traditional and new retail formats. The questionnaire consisted of questions related to CE (value equity, brand equity, relation equity), satisfaction, loyalty, and demographic characteristics. CE and satisfaction were measured on a 5-point Likert scale. A total of 400 surveys were completed, resulting in 391 usable returns for analysis in this study. In the regression analysis between CE and customer satisfaction, both old and new retail firms showed statistically significant effects. In the traditional retail industry, value equity and brand equity were statistically significant, while relation equity were not.     

Predicting resilience in retailing using grey theory and moving probability based Markov models

The level of resilience for an urban retail system is referred to as the ability of diverse types of retailing to adjust to any modifications, crises or shocks, which can adversely influence the system equilibrium, without compromising on performing its’ functions in a viable way. We use the case of retailing in an urban environment, considering a town center, and observed the resilience factors in retailing. Apart from that, we propose a methodology to measure and predict the level of retail resilience of urban town centers. The idea and theory of grey prediction models and moving probability based Markov models are used in this research for predicting the retail resilience of town centers using several identified indicators. Here, the retail resilience of a case town center, which is located in an Indian city, is evaluated based on the five indicators of retail resilience. From the results of prediction, an increasing trend in the level of retail resilience is observed for the case during 2020. This is perceived as per the results of predictions from the grey model of the first order and with one variable (GM (1, 1) model) and the grey moving probability state Markov model-based error correction. Managers can acknowledge the level of retail resilience and the stage of the adaptive cycle, where the town center stands in resilience, for improving the future trends in the resilience of the town center. Also, the policy implications points in the direction to mend or amend strategies to fit the town center within the adaptive cycle of resilience, as discussed in the paper.     

Valuation of brand equity and retailer growth strategies using real options

In marketing, significant attention has been devoted to the study of drivers and outcomes of strategic flexibility drawing on real options theory. However, research that quantifies the specific value of flexibility reflected in a bundle of strategic real options is lacking. To remedy this gap, we develop a real options-based framework that takes account of brand expansion and extension options to value brand equity and retailer growth strategies. We show how to value the bundle of strategic real options associated with a flexible marketing strategic vision and how to assess the growth strategies related to the corporate brand of an international retailer. We apply our method to estimating the brand equity of Starbucks both under growth and adversity conditions. The results reveal that our method can more reliably incorporate the growth potential of the brand under uncertainty conditions. Comparisons with other brand valuation approaches are discussed. Our study helps clarify the links among management’s strategic plans, brand-based marketing strategies and share price, and allows to better monitor the impact of retailer strategic choices on long-term brand equity value.