Criteria for evaluating structural equation models with latent variables are defined, critiqued, and illustrated. An overall program for model evaluation is proposed based upon an interpretation of converging and diverging evidence. Model assessment is considered to be a complex process mixing statistical criteria with philosophical, historical, and theoretical elements. Inevitably the process entails some attempt at a reconcilation between so-called objective and subjective norms.

On the evaluation of structural equation models

Marketing inherited a model of exchange from economics, which had a dominant logic based on the exchange of “goods,” which usually are manufactured output The dominant logic focused on tangible resources, embedded value, and transactions Over the past several decades, new perspectives have emerged that have a revised logic focused on intangible resources, the cocreation of value, and relationships The authors believe that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange The authors explore this evolving logic and the corresponding shift in perspective for marketing scholars, marketing practitioners, and marketing educators

/pdf/evolving-to-a-new-dominant-logic-for-marketing-bnlxqi06a2.pdf

Evolving to a New Dominant Logic for Marketing

If service quality relates to retention of customers at the aggregate level, as other research has indicated, then evidence of its impact on customers’ behavioral responses should be detectable. Th...

The behavioral consequences of service quality

According to W. Edwards Deming, American companies require nothing less than a transformation of management style and of governmental relations with industry. In Out of the Crisis, originally published in 1982, Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future, he claims, brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved product and service. In simple, direct language, he explains the principles of management transformation and how to apply them.

Out of the Crisis

计量经济分析 = Econometric analysis

Customer satisfaction, customer retention, and market share

The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm’s customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer’s lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm’s contribution margin. The brand-switching matrix can be estimated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can analyze drivers that have the greatest impact, compare the drivers’ performance with that of competitors’ drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be implemented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in customer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the greatest return.

http://accuraad.nl/wp-content/uploads/2012/09/Return-on-marketing1.pdf

Return on Marketing: Using Customer Equity to Focus Marketing Strategy

Service Quality: Insights and Managerial Implications from the Frontier

Many companies have been disappointed by a lack of results from their quality efforts. The financial benefits of quality, which had been assumed as a matter of faith in the “religion of quality,” are now being seriously questioned by cost-cutting executives, who cite the highly publicized financial failures of some companies prominent in the quality movement. In this increasingly results-oriented environment, managers must now justify their quality improvement efforts financially. The authors present the “return on quality” approach, which is based on the assumptions that (1) quality is an investment, (2) quality efforts must be financially accountable, (3) it is possible to spend too much on quality, and (4) not all quality expenditures are equally valid. The authors then provide a managerial framework that can be used to guide quality improvement efforts. This framework has several attractive features, including ensured managerial relevance and financial accountability.

Roland T. Rust

Papers

Customer satisfaction, customer retention, and market share

Return on Marketing: Using Customer Equity to Focus Marketing Strategy

Service Quality: Insights and Managerial Implications from the Frontier

Return on quality (ROQ): Making service quality financially accountable

Return on quality (ROQ) : making service quality financially accountable : technical wooking paper