Analysis of SMC marketing system and research of customer loyalty identification based on HMM

Abstract

The purpose of this paper is to systematically identify customer loyalty under a concrete marketing environment in a comparative manner. Since customers are stimulated by different marketing scenarios, the research identifies those marketing elements which significantly impact customer loyalty and on which companies should focus within their marketing communication in order to increase customer loyalty. The paper brings relevant multi-sectorial insights, in the particular marketing environment, and thinking forward the general theoretical knowledge regarding the relationship between customer loyalty and marketing factors as complex constructs. Moreover, by using a quasi-exhaustive manner to describe SMC model, this paper complements previous research on the topic, in which customer loyalty was constructed narrowly, within limited conceptual frameworks. This paper analyzes how customer loyal status changes and explores how Hidden Markov model can be applied on identification of customer loyalty. These analyses will support practitioners in the retailing in setting-up and steering their customer retention strategies and will provide a theoretical contribution to validating one of the most prominent customer loyalty models.