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Article: Customer lifetime value: Stochastic optimization approach

TitleCustomer lifetime value: Stochastic optimization approach
Authors
KeywordsCustomer Lifetime Value
Markov Process
Relationship Marketing
Stochastic Dynamic Programming
Issue Date2004
PublisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.html
Citation
Journal Of The Operational Research Society, 2004, v. 55 n. 8, p. 860-868 How to Cite?
AbstractSince the early 1980s, the concept of relationship marketing has been becoming important in general marketing, especially in the area of direct and interactive marketing. The core of relationship marketing is the maintenance of longterm relationships with the customers. However, the relationship marketing is costly and therefore, the determination of the customer lifetime value (CLV) is an important element in making strategic decisions in both advertising and promotion. In this paper, we propose a stochastic dynamic programming model with a Markov chain for the optimization of CLV. Both cases of infinite horizon and finite horizon are discussed. The model is then applied to practical data of a computer service company.
Persistent Identifierhttp://hdl.handle.net/10722/156156
ISSN
2015 Impact Factor: 1.225
2015 SCImago Journal Rankings: 1.026
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChing, WKen_US
dc.contributor.authorNg, MKen_US
dc.contributor.authorWong, KKen_US
dc.contributor.authorAltman, Een_US
dc.date.accessioned2012-08-08T08:40:38Z-
dc.date.available2012-08-08T08:40:38Z-
dc.date.issued2004en_US
dc.identifier.citationJournal Of The Operational Research Society, 2004, v. 55 n. 8, p. 860-868en_US
dc.identifier.issn0160-5682en_US
dc.identifier.urihttp://hdl.handle.net/10722/156156-
dc.description.abstractSince the early 1980s, the concept of relationship marketing has been becoming important in general marketing, especially in the area of direct and interactive marketing. The core of relationship marketing is the maintenance of longterm relationships with the customers. However, the relationship marketing is costly and therefore, the determination of the customer lifetime value (CLV) is an important element in making strategic decisions in both advertising and promotion. In this paper, we propose a stochastic dynamic programming model with a Markov chain for the optimization of CLV. Both cases of infinite horizon and finite horizon are discussed. The model is then applied to practical data of a computer service company.en_US
dc.languageengen_US
dc.publisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.htmlen_US
dc.relation.ispartofJournal of the Operational Research Societyen_US
dc.subjectCustomer Lifetime Valueen_US
dc.subjectMarkov Processen_US
dc.subjectRelationship Marketingen_US
dc.subjectStochastic Dynamic Programmingen_US
dc.titleCustomer lifetime value: Stochastic optimization approachen_US
dc.typeArticleen_US
dc.identifier.emailChing, WK:wching@hku.hken_US
dc.identifier.authorityChing, WK=rp00679en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1057/palgrave.jors.2601755en_US
dc.identifier.scopuseid_2-s2.0-3242756531en_US
dc.identifier.hkuros97988-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-3242756531&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume55en_US
dc.identifier.issue8en_US
dc.identifier.spage860en_US
dc.identifier.epage868en_US
dc.identifier.isiWOS:000222784000008-
dc.publisher.placeUnited Kingdomen_US
dc.identifier.scopusauthoridChing, WK=13310265500en_US
dc.identifier.scopusauthoridNg, MK=34571761900en_US
dc.identifier.scopusauthoridWong, KK=7404759138en_US
dc.identifier.scopusauthoridAltman, E=7102699345en_US
dc.identifier.citeulike2429154-

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