An analytical model that links customer-perceived value and competitive strategies

Abstract

Several authors developed predictive analytic models that link the value that represents customers to a firm (i.e., customer lifetime value) to several outcome variables, such as customer profitability, in relationship marketing. However, similar models that link the value that customers perceive and firm outcomes or customer responses are uncommon. To reduce this gap, we construct an analytic model that links customer-perceived value and a company’s competitive strategy, achieved through a multi-attribute model, analytic hierarchy processing, and a conceptualization of value that considers disparity between benefits and sacrifices. Operationalized in a context of industrial enterprise, the model predicts and orients a company’s competitive strategy and extends generic competitive strategies introduced in Bowman’s strategy clock mode by identifying when two strategies create competitive advantages.

Appendices

Appendix A

Questionnaire (evaluation of pairs)

Here is the list of various combinations of benefits (sacrifices) for the purchase of industrial pumps. Thank you to choose for each pair, the important benefit (sacrifice) by circling the letter following your choice. Also, please indicate the degree of preference of your choice on a scale of 1–7. 1: same preference and 7: great preference

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Appendix B

AHP method

The coherence ratio is calculated using the following formula:  ${\text{CR}} = \frac{{{\text{CI}}}}{{{\text{RI}}}}$, ${\text{CI}} = \frac{{\left( {\lambda_{\hbox{max} } - n} \right)}}{n - 1}$ (λ_max is the maximum eigenvalue of the global comparison matrix) and RI is the random index whose value depends on the number of benefits (sacrifices) compared.

According to Saaty (1970), IR less than 10% indicates that the comparison matrix is sufficiently coherent.

As the random index RI is equal to 1.24 for a number of criteria n equal to 6, the coherence ratio.

CR is equal to 0.55% $\left( {{\text{CR}}\,{\text{ = }}\,\frac{{{\text{CI}}}}{{{\text{RI}}}}} \right)$. The latter is less than 10%, therefore, the overall comparison matrix is sufficiently consistent (Saaty 1970)

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Appendix C

Questionnaire (example)

On a scale of 1–5 (1: strongly disagree and 5: strongly agree), please indicate your level of agreement with the following statements by circling a number:

The company’s pumps have a good quality of materials.	1	2	3	4	5
The competitor 1’s pumps have a good quality of materials	1	2	3	4	5
The competitor 2’s pumps have a good quality of materials	1	2	3	4	5
The competitor 3’s pumps have a good quality of materials	1	2	3	4	5
The competitor 4’s pumps have a good quality of materials	1	2	3	4	5