Value Based Benchmarking and Market Partitioning
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.
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- Doyle, JR & Green, RH, 1991. "Comparing products using data envelopment analysis," Omega, Elsevier, vol. 19(6), pages 631-638.
- Christos Papahristodoulou, 1997. "A DEA model to evaluate car efficiency," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1493-1508.
- 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.
- 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.
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