Customer segmentation model based on value generation for marketing strategies formulation

Alvaro Julio Cuadros; Victoria Eugenia Domínguez

doi:10.1016/j.estger.2014.02.005

Authors

Alvaro Julio Cuadros Full Time Professor, Escuela de Ingeniería Industrial, Universidad del Valle, Cali
Victoria Eugenia Domínguez Project Manager

DOI:

https://doi.org/10.1016/j.estger.2014.02.005

Keywords:

Segmentation, Customer value, Artificial neural network, Self-organized maps

Abstract

Whendeciding in which segment to invest orhowto distribute the marketing budget, managers generally
take risks in making decisions without considering the real impact every client or segment has over organizational
profits. In this paper, a segmentation framework is proposed that considers, firstly, the calculation
of customer lifetime value, the current value, and client loyalty, and then the building of client segments
by self-organized maps. The effectiveness of the proposed method is demonstrated with an empirical
study in a cane sugar mill where a total of 9 segments of interest were identified for decision making.

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Author Biography

Alvaro Julio Cuadros, Full Time Professor, Escuela de Ingeniería Industrial, Universidad del Valle, Cali

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