Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
Capturing Customer Heterogeneity Using A Finite Mixture Pls Approach, Carsten Hahn, Michael D. Johnson, Andreas Herrmann, Frank Huber
Capturing Customer Heterogeneity Using A Finite Mixture Pls Approach, Carsten Hahn, Michael D. Johnson, Andreas Herrmann, Frank Huber
Michael D. Johnson
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.