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Analysis of Effects of Operational Execution on Repeat Purchasing for Heterogeneous Customer Segments
Author(s) -
Boyer Kenneth K.,
Frohlich Markham T.
Publication year - 2006
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.2006.tb00242.x
Subject(s) - purchasing , business , profitability index , product (mathematics) , service quality , marketing , quality (philosophy) , service (business) , competition (biology) , computer science , finance , ecology , philosophy , geometry , mathematics , epistemology , biology
Many retailers are increasingly turning to home delivery as a new arena of operational competition. This study controlled for industry by investigating the online home delivery grocery business, and an analysis of 1,919 customers of home delivery grocers identified four groups of online customers based on reasons for selecting this service. These four groups were next linked to operational execution in terms of service, product, and Internet quality, and found to vary in predicable ways. Subsequent to the initial data collection, five month's of post hoc longitudinal purchasing history was collected on the four groups of online customers to determine the relative profitability. Finally, as a follow‐on analysis, the study used regression to predict future consumer purchases based upon operational execution. Time savings and service quality emerged as the two most important independent variables in terms of future buying from such online home delivery services.