Customer acquisition and customer retention in a competitive industry
Conference paper
Lianos, G. and Sloev, I. 2016. Customer acquisition and customer retention in a competitive industry. Petruzzellis, L. and Winer, R. (ed.) Springer. pp. 541-552 https://doi.org/10.1007/978-3-319-29877-1_111
Type | Conference paper |
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Title | Customer acquisition and customer retention in a competitive industry |
Authors | Lianos, G. and Sloev, I. |
Abstract | We study optimal customer acquisition and retention strategies in an infinite-horizon model of dynamic competition. We find that acquisition expenditures constitute the larger share of the marketing budget, when the customer profit margin is either low or large, but for intermediate profit margin values, firms spend more resources for customer retention. If customer profit margins rise for exogenous reasons, we find that the share of customer acquisition expenditures in the marketing budget increases in markets with high profit margins, whereas it decreases in markets with low profit margins. The impact of entry of new firms in the market on the optimal strategy depends on the effect of the entry on profit margins and absolute levels of profit margins. A similar phenomenon may also appear in a single segmented market: the impact of higher competition on the luxury and mass- consumption segments of a market would be different. |
Research Group | Corporate Social Responsibility and Business Ethics group |
Strategic Marketing, Consumer Behaviour and Branding/Identity group | |
Page range | 541-552 |
Series | Developments in Marketing Science: Proceedings of the Academy of Marketing Science |
Editors | Petruzzellis, L. and Winer, R. |
ISBN | |
Hardcover | 9783319298764 |
Publisher | Springer |
Publication dates | |
Online | 28 Jun 2016 |
Publication process dates | |
Deposited | 16 May 2019 |
Output status | Published |
Copyright Statement | © Academy of Marketing Science 2016 |
Additional information | The 18th AMS World Marketing Congress, Bari, Italy, July 14-18, 2015 |
Digital Object Identifier (DOI) | https://doi.org/10.1007/978-3-319-29877-1_111 |
Language | English |
Book title | Rediscovering the Essentiality of Marketing: Proceedings of the 2015 Academy of Marketing Science (AMS) World Marketing Congress |
https://repository.mdx.ac.uk/item/88472
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