Home Articles Abstract
Research Article

A Study on Web-Based Customer Utility Measurement Systems

Lee, Hunyeong · Lim, Minhyeong · Yang, Juhwan

Published: January 2003 · Vol. 31 No. 7 · pp. 1787-1808
Full Text

Abstract

This study focused on developing a marketing decision support system that can effectively measure customer utility and apply it to marketing decision-making by communicating with customers using information technology such as the Internet. A system was developed that collects data and measures respondent utility through interaction between the computer and respondents via the Internet while minimizing respondent effort. The developed system collects data using choice sets that are relatively easy for respondents to answer in order to reduce respondent burden, and measures respondent utility by inferring insufficient information from the response data of existing respondents. The significance of this study can be found in the following aspects. First, it has value as a new attempt to improve marketing research methods. A computer system was developed that avoids the rapidly increasing respondent burden associated with the growing number of cards—the biggest problem in using traditional conjoint methods—while showing no significant difference in predictive power compared to traditional methods. Second, the conjoint analysis method, which is used for market segmentation, market share estimation, and new product development by measuring customer utility, was implemented on an online Internet-based platform to enable real-time analysis. Furthermore, analysis results were accumulated in a database to enable firms to conduct various marketing activities more effectively and scientifically. Third, by automatically measuring customer utility and introducing products that match their preferences, the system can earn customer trust while simultaneously reducing sales costs. Finally, by analyzing data accumulated in the database, it provides a foundation for conducting more effective Customer Relationship Management (CRM). Specifically, by selecting products and services that match individual customers based on their calculated utility, the system enables the execution of direct marketing and telemarketing, and by providing services and products tailored to their preferences, it allows for more effective and scientific customer management.
Keywords: Case Based ReasoningConjoint AnalysisCustomer Utility