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Value Based Benchmarking and Market Partitioning

Author

Listed:
  • H. H. Bauer

    (University of Mannheim)

  • M. Staat

    (University of Mannheim)

  • M. Hammerschmidt

    (University of Mannheim)

Abstract

The paper offers an analytical approach for an integrated treatment of market partitioning and benchmarking within a Data Envelopment Analysis (DEA) framework. Based on an empirical example from the automotive industry we measure product effciency from the customer’s perspective. This is interpreted as customer value, i. e., as a ratio of outputs that customers obtain from a product (e. g., resale value, reliability) and inputs that customers have to invest (e. g., price, running costs). Products offering a maximum customer value relative to all other alternatives represent effcient peers, which constitute benchmarks for different sub-markets. All products benchmarked via the same effcient peer(s) constitute a sub-market including the benchmarks.

Suggested Citation

  • H. H. Bauer & M. Staat & M. Hammerschmidt, 2003. "Value Based Benchmarking and Market Partitioning," Microeconomics 0309004, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0309004
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    References listed on IDEAS

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    1. Christos Papahristodoulou, 1997. "A DEA model to evaluate car efficiency," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1493-1508.
    2. Doyle, JR & Green, RH, 1991. "Comparing products using data envelopment analysis," Omega, Elsevier, vol. 19(6), pages 631-638.
    3. Kamakura, Wagner A & Ratchford, Brian T & Agrawal, Jagdish, 1988. " Measuring Market Efficiency and Welfare Loss," Journal of Consumer Research, Oxford University Press, vol. 15(3), pages 289-302, December.
    4. DeSarbo, Wayne S. & Kim, Youngchan & Wedel, Michel & Fong, Duncan K. H., 1998. "A Bayesian approach to the spatial representation of market structure from consumer choice data," European Journal of Operational Research, Elsevier, vol. 111(2), pages 285-305, December.
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    Cited by:

    1. Matthias Staat & Maik Hammerschmidt, 2004. "A Super Efficiency Model for Product Evaluation," Microeconomics 0402011, EconWPA.
    2. Uwe Cantner & Jens J. Krüger & René Söllner, 2012. "Product quality, product price, and share dynamics in the German compact car market," Industrial and Corporate Change, Oxford University Press, vol. 21(5), pages 1085-1115, October.

    More about this item

    Keywords

    Data Envelopment Analysis (DEA); Market Partitioning; Benchmarking; Product-Market Structuring; Customer Value;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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