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Structuring Product-Markets: An Approach Based On Customer Value


  • Matthias Staat

    (University of Mannheim)

  • Hans H. Bauer

    (University of Mannheim)

  • Maik Hammerschmidt

    (University of Mannheim)


We offer an efficiency-based approach to derive market partitions and respective benchmarks using Data Envelopment Analysis. Product efficiency is measured as an output to input value from the customer’s perspective. Products offering a maximum customer value relative to alternatives represent benchmarks for different sub-markets. The framework is applied to data on compact cars. relevant product segments.

Suggested Citation

  • Matthias Staat & Hans H. Bauer & Maik Hammerschmidt, 2004. "Structuring Product-Markets: An Approach Based On Customer Value," Microeconomics 0401002, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0401002
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    References listed on IDEAS

    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    2. Christos Papahristodoulou, 1997. "A DEA model to evaluate car efficiency," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1493-1508.
    3. Rao, Vithala R & Sabavala, Darius Jal, 1981. " Inference in Hierarchical Choice Processes from Panel Data," Journal of Consumer Research, Oxford University Press, vol. 8(1), pages 85-96, June.
    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. Mika Kortelainen & Timo Kuosmanen, 2007. "Eco-efficiency analysis of consumer durables using absolute shadow prices," Journal of Productivity Analysis, Springer, vol. 28(1), pages 57-69, October.
    2. Matthias Staat & Maik Hammerschmidt, 2004. "A Super Efficiency Model for Product Evaluation," Microeconomics 0402011, EconWPA.
    3. 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


    Customer Value; Product-Market Structuring; Market Partitioning; Data Envelopment Analysis; Product Efficiency; Frontier Functions;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D2 - Microeconomics - - Production and Organizations
    • D3 - Microeconomics - - Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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