Author: | Cans, N. |
Title: | Customer Loyalty and Supplier Quality Competition |
Journal: | Management Science
2002 : FEB, VOL. 48:2, p. 207-221 |
Index terms: | CUSTOMERS CUSTOMER RELATIONS SUPPLIERS SUPPLY QUALITY COMPETITION |
Language: | eng |
Abstract: | The author of the article develops a model of customer choice in response to random variation in quality. The choice model yields closed-form expressions which reflect the effect of competing suppliers' service quality on the long-run fraction of purchases a customer makes at the various competitors. The author then uses the expressions as the basis of simple normative models for suppliers seeking to maximize their long-run average profits. The results provide insight into the effect of switching behavior on the service levels offered by competing suppliers. The paper also provides a substantial list of references on this subject. |
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