J Market Anal (2018) 6:138–149
https://doi.org/10.1057/s41270-018-0043-9
ORIGINAL ARTICLE
An analytical model that links customer-perceived value
and competitive strategies
Said Echchakoui1
Revised: 5 August 2018 / Published online: 22 October 2018
 Springer Nature Limited 2018
Abstract Several authors developed predictive analytic mod-
els that link the value that represents customers to a firm (i.e.,
customer lifetime value) to several outcome variables, such as
customer profitability, in relationship marketing. However,
similar models that link the value that customers perceive and
firm outcomes or customer responses are uncommon. To reduce
this gap, we construct an analytic model that links customer-
perceived value and a company’s competitive strategy, achieved
through a multi-attribute model, analytic hierarchy processing,
and a conceptualization of value that considers disparity
between benefits and sacrifices. Operationalized in a context of
industrial enterprise, the model predicts and orients a company’s
competitive strategy and extends generic competitive strategies
introduced in Bowman’s strategy clock mode by identifying
when two strategies create competitive advantages.
Keywords Analytical model  Customer-perceived value 
Competitive strategy  Bowman’s strategy clock  Generic
strategies  Operationalization
Introduction
Growth markets, competition intensity, and market glob-
alization increasingly emphasize the importance of firm
value as a source of competitive advantage (Goldrin 2017).
Electronic supplementary material The online version of this
article (https://doi.org/10.1057/s41270-018-0043-9) contains supple-
mentary material, which is available to authorized users.
& Said Echchakoui
said_echchakoui@uqar.ca
1
University of Quebec at Rimouski, 1595 Boulevard
Alphonse-Desjardins, Lévis, QC G6V 0A6, Canada
In a supplier–customer relationship, the value concept can
be viewed from a supplier or customer side. From a sup-
plier perspective, the literature specifies several types of
value, especially customer lifetime value (CLV), which
refers to ‘‘the expected net present value of cash flows from
a single customer over time [that] captures the long-term
effects of acquisition incentives’’ (Swain et al. 2014, p. 2).
Since marketing analytics models are a source of compet-
itive advantage (Breur 2013), several authors develop
predictive models that link CLV to firm outcomes and
customer responses (Swain et al. 2014). Tsao et al. (2014)
explore the optimum balance between customer acquisition
and retention budgets to maximize customer equity (i.e.,
the sum of current and future CLV). Researchers also use
analytic modeling, including CLV, to predict supplier
profitability in relationship marketing (Berger and Nasr
1998; Kumar et al. 2009; Swain et al. 2014).
From a customer perspective, the literature offers sev-
eral definitions of customer-perceived value (CPV), but
most authors define it as a trade-off between the benefits
and sacrifices customers perceive (Blocker 2011; Töytäri
et al. 2015; Zeithaml 1988). Many studies find CPV to be
important. For example, extant research suggests that CPV
influences profitability (Palmatier 2008) and customer
loyalty (Palmatier et al. 2007). However, despite growing
CVP literature, analytic models that include CPV are rare.
The link between competitive strategies and value has
attracted attention in the literature (Porter 1985; Bowman
and Faulkner 1997; Chatain and Zemsky 2011), but its
development remains largely conceptual; no analytic
model explicitly links CPV with one or more types of
competitive strategies. To fill this gap, this study demon-
strates that using CPV in analytic models supports a firm’s
strategic decision-making. We develop a predictive ana-
lytic model that links CPV with Bowman’s strategy clock
An analytical model that links customer-perceived value…
(Bowman and Faulkner 1997) to address two research
questions: (1) what model represents the relationship
between CPV and a firm’s competitive strategy, and (2)
how can such a model be operationalized so a company
becomes aware of its competitive strategies?
We focus on competitive strategy because a firm’s
advantages are vital to survival and growth (Wright 2013;
Prunea 2014), and such advantages can be achieved only if a
firm establishes viable competitive strategies (Porter 1980;
Kotler and Keller 2012; Herzallah et al. 2014). The literature
advocates several competitive strategies, including Porter’s
generic strategies (1980, 1985, 2008), Bowman’s generic
strategies (Faulkner and Bowman 1992, 1995; Bowman and
Faulkner 1996, 1997), and Ansoff’s growth strategies
(1986). We use Bowman and Faulkner’s (1997) strategy
clock for several reasons. First, it is commonly cited in much
research (Greenwood et al. 2009; Köksal and Özgül 2010;
Shavarini et al. 2013; Bremser et al. 2018). Second, it
appears commonly in strategy textbooks used throughout
European business schools. For example, Johnson et al.
(2017) present the model as a valid strategic option, and the
French translation of the book is used widely in France and
Quebec, Canada. In the United Kingdom, Bowman and
Asch’s (1987) book was among the first to be used to teach
strategy. The model also includes Porter’s strategic options
(i.e., cost leadership, differentiation, and differentiation
focus). Finally, the generic strategies that Bowman and
Faulkner (1997) propose are based on a customer’s per-
ception of firm value, a perspective that fits with Zeithaml’s
(1988) definition of CPV used in the current study.
We contribute to extant literature in three ways. This
study is the first to develop an analytical model that incor-
porates CPV and operationalizes a relationship between
CPV and competitive strategies. The model extends Bow-
man’s clock strategies by dividing two strategies (i.e., low
price/low added value and focused differentiation) into nine
categories that depend on CPV in comparison to zero (i.e.,
CPV [ 0 or CPV B 0). Findings suggest that unlike Bow-
man and Faulkner’s (1997) propositions, these two strategies
are not always viable to achieving competitive advantages.
Following Ossi’s (2018) suggestion that concrete predictive
models are important to business, we propose a quantifiable
tool based on a simple spreadsheet that managers can use to
simulate, predict, and adjust strategies according to market
contexts and objectives. Focusing on competitive advan-
tages, this study advances extant strategy literature by
demonstrating the importance of using analytic models
during strategy development.
139
Literature review
CPV
The literature conceptualizes value in many forms, but
value can be categorized three ways: (1) customer value,
(2) value creation, and (3) CPV. Also called value appro-
priation (Payne et al. 2017), customer value is value that a
customer ascribes to a supplier—the value that a supplier
acquires from a relationship with the customer. Research-
ers commonly calculate this value in terms of dollars
(Gupta et al. 2004), designated by CLV. Value creation is
value that a company offers to customers (Rintamaki et al.
2007; Chatain and Zemsky 2011; Payne et al. 2017), which
is different from CPV; a company can offer the best quality
product, but customers might not perceive it that way.
The literature offers many definitions of CPV, but most
authors (Blocker 2011; Tëytari et al. 2013) use that from
Zeithaml (1988), according to whom CPV is a trade-off
between profit and sacrifices that customers perceive.
Authors identify several dimensions of benefits, including
utility (Rintamaki et al. 2007; Töytäri et al. 2015), eco-
nomic (Rintamaki et al. 2007; Töytäri et al. 2015), expe-
riential (Holbrook 2006; Mathwick et al. 2001; Echchakoui
2015), symbolic (Rintamaki et al. 2007), and relational
(Töytäri et al. 2015). Perceived sacrifices include monetary
dimensions such as price (Lai 1995; Anderson and Narus
1999) and non-monetary dimensions such as time, risk, and
effort (Lai 1995). According to Woodall (2003), trade-offs
can be operationalized using differences or ratios. CPV can
be calculated in terms of either the difference between
perceived benefits and sacrifices (i.e., benefits minus sac-
rifices), or a ratio (i.e., benefits divided by sacrifices). We
use the difference approach because consumer perceptions
are often measured using items scored on Likert-type
scales, and interval scales fit well with the difference
approach, but ratios do not. For example, on a scale from
1–7, 4 - 3 = 5 - 4, but the ratio is not (4/3 = 5/4).
Competitive strategy
A strategy is a set of actions in which a company engages
in the long term to achieve objectives (Grant 2011). Most
authors divide strategy into three types—corporate, busi-
ness, and functional. Corporate strategy focuses on strate-
gic intent (i.e., mission, vision, and objectives) and the
perimeter of a company (i.e., where it meets competition).
Business strategy, also known as competitive strategy,
focuses on establishing a competitive advantage in a mar-
ket (Porter 1980; Kotler and Keller 2012; Herzallah et al.
2014). Teece (2007) describes competitive advantages as
elements (e.g., capabilities and resources) on which a firm
is based to perform better than competitors. Competitive
140 S. Echchakoui

advantages also describe a firm’s position relative to

competitors (Porter 2008). Functional strategy focuses on
development and implementation of established strategies
created by business functions such as marketing, human
resources, finance, and operations (Grant 1998). We focus
on business strategies.
Porter (1980) introduced generic strategies, and
depending on industry structure, a company can use one of
four strategies to establish competitive advantages (Porter
1985), including cost leadership, differentiation, cost focus,
and differentiation focus. According to Saunders (2015),
cost leadership is achieved using resources, efficiency, and
cost minimization based on the curve experience, and
performing more efficiently than competitors do (Porter Fig. 1 Bowman’s strategy clock according to Bowman and Faulkner
(1997)
1980, 1996). The strategy allows a company to offer lower
prices. The purpose of differentiation is to offer a unique
The low-price/low-value strategy (position 1) charac-
product that is better than competitors’ (Teeratansirikool
terizes a firm’s offer with low value added for a low price.
et al. 2013). The focus strategy (i.e., cost or differentiation)
Companies that pursue this strategy commonly target
offers products tailored to a targeted, geographical market,
commodities markets, price-conscious consumers, and
or one with special needs (Porter 1980; Morgan 2015).
consumers unconcerned about differences among products
According to Porter (1980), a company that uses a
(Johnson et al. 2005). Dollarama is an example of a large
combination of these strategies will be unsuccessful
company (Quebec, Canada) that uses this strategy. A low-
because cost leadership and differentiation are incompati-
price strategy (position 2) is consistent with Porter’s cost
ble, an argument that several authors criticize. A meta-
leadership because an organization that follows a low-cost
analysis from Campbell-Hunt (2000) suggests that a com-
approach typically pursues a low-price strategy. Unlike the
pany can achieve better performance by combining these
low-price/low-value strategy, perceived benefits in a low-
two strategies. Bowman (1991) and others (Bowman and
price strategy are not low but equal to a market reference
Johnson 1992; Faulkner and Bowman 1995; Bowman and
(Bowman and Faulkner 1997). Walmart pursues this
Faulkner 1996) address this limitation of Porter’s model by
strategy. Using a hybrid strategy (position 3), a company
proposing hybrid strategies, known as Bowman’s strategy
achieves competitive advantages by providing customers
clock.
with the best value (Bowman and Faulkner 1997). The
strategy combines low cost with moderate differentiation.
Bowman’s strategy clock IKEA built its success on a hybrid strategy. Its business
model is based on simplicity of products and kits that
The first version of the strategy clock was introduced by customers assemble for low prices. Differentiation (posi-
Bowman (1991), according to whom a competitive strategy tion 4) equates to Porter’s generic differentiation, charac-
must be based on value perceived by customers, with value terized by an offer with moderate benefits (generally based
defined as the ratio between price and perceived quality. on a strong brand image) for a price perceived as a refer-
This version was improved in subsequent studies (Faulkner ence price in a market (Bowman and Faulkner 1997).
and Bowman 1992, 1995; Bowman, and Faulkner Kellogg’s uses this strategy. Also called sophistication
1996, 1997). We use the strategy clock introduced by strategy, focused differentiation (position 5) provides
Bowman and Faulkner (1997) (Fig. 1). Based on two axes, superior value to a niche market for a high price (Bowman
Bowman and Faulkner (1997) describe eight generic and Faulkner 1997). Ferrari uses this strategy. Positions 6
strategies and class them into two categories: (1) viable through 8 represent failure, or non-competitive strategies,
strategies, including five generic strategies, and (2) failure because customers perceive price to be greater than a
strategies, containing three generic strategies. The axes product’s value (Bowman and Faulkner 1997).
represent customer-perceived value and price. CPV refers
to value during use, which means customer satisfaction CPV and competitive strategy
with respect to the utility of a product purchased or used
(Bowman 1991). The five viable generic strategies are (1) Several researchers suggest a relationship between the
low price/low added value, (2) low pricing, (3) hybrid, (4) value a company proposes and its competitive advantages.
differentiation, and (5) focused differentiation. Porter (1985) argues that competitive advantage derives
An analytical model that links customer-perceived value…
from an organization’s value creation, and Peteraf and
Barney (2003) suggest that a company has a competitive
advantage when it creates more value than its competitors
do. Anderson et al. (2006) argue that value proposition is a
strategic tool, and according to Barney (1991), a firm has a
competitive advantage when its value is valuable and is
inimitable by current or potential competitors. Although
such studies suggest a link between firm value and strategy,
no model explicitly operationalizes that link. To fill this
gap, we construct a model that links CPV and the generic
strategies Bowman and Faulkner (1997) propose. However,
contrary to other researchers, we use perceived benefits and
sacrifices as axes instead of CPV and price (Fig. 1), the
reason for which relates to Zeithaml’s (1988) definition of
CPV—a trade-off between benefits and sacrifices, and the
latter includes price.
Analytical model linking CPV with competitive
strategy
Model specification
CPV is the difference between benefits and sacrifices that
customers perceive (Zeithaml 1988), and in this definition,
benefits and sacrifices are multidimensional. According to
Töytäri et al. (2015) and Anderson and Wynstra (2010), it
is ideal when authors combine these concepts into a single,
quantifiable measure. We therefore use the compensatory
decision model to group dimensions of benefits and sacri-
fices into one measure. This grouping allows us to use these
concepts on two axes in Bowman’s strategic clock (Fig. 2).
The compensatory decision model is a multi-attribute
model, since a decision-maker relies on attribute assess-
ments to select an offer that has the greatest perceived
utility (Elrod et al. 2004). We chose this model for two
reasons. First, the model is used broadly to predict deci-
sion-makers’ behaviors (Elrod et al. 2004). Fishbein’s
model (1967) is one of the most common multi-attribute
decision models used in consumer behavior. Second, the
model links decision-makers’ choices with perceptions of
utility, and thus it fits well with CPV’s conceptualization as
Zeithaml (1988) defines it.
The compensatory decision model allows us to model
benefits, sacrifices, and CPV using three equations:
X n
Benefits ¼ bk Bk ð1Þ
k¼1
X
m benefits and sacrifices during this step.
Sacrifices ¼ dk Sk ð2Þ
k¼1
141
Perceived value ¼ Benefits  Sacrifices
Xn X
m
¼ b k Bk  dk Sk ; ð3Þ
k¼1 k¼1
where n is the number of perceived benefits, m is the
number of perceived sacrifices, Bk customers’ evaluations
of benefit k, bk the importance of benefit k to customers, Sk
customers’ evaluations of sacrifice k, and dk the importance
of sacrifice k to customers. For all generic strategies, CPV
must be positive, otherwise customers would perceive
utility negatively and would not buy the product. If we
consider Fig. 1 and the positive CPV principal, two of the
five generic strategies in Bowman’s strategy clock are not
always viable (Fig. 2). According to Bowman and Faulkner
(1997), the low-price/low-value strategy offers a low price
in exchange for lower CPV. If we change price to sacrifice
and CPV to benefit, the definition of the strategy becomes
low sacrifice/low benefit, and for this strategy to be viable,
customers must perceive that the benefit is greater than the
sacrifice. However, in some cases and as Fig. 2 shows, a
benefit can be lower than a sacrifice. For example, if the
perceived benefit is 2 (e.g., on a 7-point Likert-type scale)
and sacrifice is 3, the strategy fails because the company’s
CPV is negative (value = 2–3 = - 1). To consider this
point, which also applies to the focus differentiation
strategy, we use McKinsey’s matrix model (Johnson et al.
2017) to extend Bowman’s strategy clock. By comparing
benefit and sacrifice, we distinguish three areas and include
each in a 3-box matrix. The green area represents the zone
in which generic strategy is viable. Red in the second area
reflects a failed generic strategy (i.e., low price/low value
and focus differentiation) because perceived sacrifice is
greater than perceived benefit. In the third, non-colored
area, a company must verify that its perceived benefits
outweigh perceived sacrifices.
Model operationalization
A company can operationalize the model in two stages
(Fig. 3). The first identifies components of customer-per-
ceived value (i.e., benefits and sacrifices), obtained from
qualitative research with focus groups, for example.
Quantitative research is the second step. The first objective
is calculation of the importance of each benefit (bk) and
sacrifice (dk) in Eqs. 1 and 2. The second is determination
of customer perceptions of the company’s benefits (Bk) and
sacrifices (Sk). To obtain a global market picture, it is
pertinent to evaluate customer perceptions of competitors’
Analytic hierarchy processing (AHP) (Saaty 1970) is a
pairwise comparison that solves decision problems based
on several criteria, primarily qualitatively. The method is
142 S. Echchakoui

Fig. 2 Extension of Bowman’s clock. 4: Reference offer on seven-point Likert scale (1–7). LSLB low sacrifice, low benefit

Fig. 3 Proposed model’s operationalization

An analytical model that links customer-perceived value… 143

Fig. 4 Results of the application of the model on a simple case

used broadly in various areas of supplier selection classifications of options or alternatives, but asking eval-
(Chamodrakas et al. 2010) and university rankings (Rad uators to indicate a degree of preference between pairs of
et al. 2011). We use the method for two reasons. AHP is a components using a cardinal scale (e.g., 1–7; 1 = same
cardinal method that consists not only of making ordinal preference, 7 = greater preference; Appendix A). AHP also
144
assesses the coherence of evaluators’ responses using a
consistency ratio, calculated from and compared to a crit-
ical ratio (CR = 10%). According to Saaty (1977), a pair-
wise comparison matrix is sufficiently consistent if the CR
is less than 0.1 (CR B 10%). To determine the importance
of benefits and sacrifices, AHP requires six steps: (1) a list
of comparison pairs for benefits and sacrifices (Appendix
A), (2) evaluation of N pairs of comparison from each
customer, with assignment of preference intensity for each
choice, (3) construction of a preference matrix for each
customer, (4) calculation of a global preference matrix
conducted through aggregation of preference matrices, (5)
calculation of a coherence index (CR) to assess the con-
sistency of customers’ evaluations (Appendix B), and (6) if
the CR is below the threshold of 10% (Saaty 1970; Saaty
and Vargas 2007), the weights of benefits and sacrifices are
established. Each component of a benefit or sacrifice is
assigned a weight between zero and 1, and those with the
greatest weights are the components customers prefer.
Case application
To illustrate application of the model, we follow a proce-
dure several researchers use (Bayrak et al. 2007; Tsai 2009;
Huang et al. 2011; Yadav and Sharma 2016) when
employing AHP during supplier selection. Tsai (2009)
draws from Bayrak et al. (2007) in which the latter had 10
subcontractors from a company apply an AHP model.
Yadav and Sharma (2016) use a case study of an auto-
motive company to rank suppliers. Following these studies,
we contacted a large Canadian company that sells indus-
trial pumps to mining companies to test the model. The
company is multinational, manufacturing and selling
industrial pumps to large firms. During the first stage, the
company had 10 of its largest customers specify the ben-
efits and sacrifices they want to reduce when buying a
pump. Reported benefits included (1) quality of pump
materials, (2) quality of after-sale services, and (3) avail-
ability of spare parts. The customers reported two sacri-
fices: (1) price and (2) delivery time. A self-administered
questionnaire was then distributed to customers to deter-
mine (1) the weight of each benefit and sacrifice and (2)
perceptions of the company’s value and four of its direct
competitors (Appendix C). Twenty managers returned the
survey, which is a small number, but the objective of the
study is to demonstrate operationalization of the model, not
test relationships between variables. Demographics of the
sample were diverse, and the majority of respondents had
university education. AHP was conducted using a spread-
sheet (Appendix B), and we similarly used software to
assess the link between CPV and generic strategies
(Fig. 4). Results from AHP suggest that customers place
S. Echchakoui
Table 1 CPV of the company and its four main competitors
Profit Sacrifice Value
Company 4.68 4.01 0.67
Competitor 1 2.17 1.34 0.83
Competitor 2 1.77 4.92 - 3.15
Competitor 3 3.82 3.61 0.21
Competitor 4 3.83 2.02 1.81
55% importance on material quality, 26% on after-sale
services, and 19% on spare parts availability. In terms of
sacrifices, customers placed 74% importance on price and
26% on delivery time. Figure 4 shows arithmetic mean
aggregation of customer-value (i.e., profit and sacrifice)
perceptions, and four of the company’s major competitors.
For example, customers reported that the company offers
pumps with the highest quality materials (4.75/5) and has
the best after-sale services (4.92/5), but competitor 4 has
the best availability of spare parts (4.71/5). In terms of
sacrifice, competitor 1 has the best prices and shortest
delivery times in the market, and in terms of generic
strategies, the company pursues a strategy of sophistication
since its CPV is slightly greater than zero (VCompagny-
= 0.67). Competitor 4 has the best CPV in the market, and
the largest market share. The relationship between value
and market share is also valid for other competitors and the
company (Table 1). Consequently, results suggest that
CPV, calculated according to the model, reflects the posi-
tion of a company in a market. Results also demonstrate
that competitor 2’s CPV is negative, which might explain
its small market share.
Conclusion
This study develops an analytical model that links CPV and
a firm’s competitive strategy. We use Zeithaml’s (1988)
definition to conceptualize CPV in terms of benefit–sacri-
fice disparity. A multi-attribute compensatory model
allows us to aggregate various benefits and sacrifices that
customers perceive into one dimension, and AHP is used to
complete the aggregation. This method offers two advan-
tages. It allows for calculation of the weight of each benefit
and weight of each sacrifice to allow for sound aggregation,
and it incorporates a coefficient that assesses the consis-
tency of customer responses. Quantitative aggregation is
appropriate because it addresses several authors’ calls for
benefits and sacrifices to be quantifiable, and that data be
grouped into a single measure (Anderson and Wynstra
2010; Töytäri et al. 2015). CPV conceptualization in terms
of benefits and sacrifices allows us to extend Bowman’s
An analytical model that links customer-perceived value…
strategy clock in two ways: (1) choice of axes and (2)
division of two generic strategies into three areas,
depending on whether a company’s value is perceived
positively or negatively. Unlike Bowman and Faulkner
(1997), we demonstrate that the two strategies are not
always viable.
This study demonstrates how a company can opera-
tionalize a model that includes CPV and competitive
strategies. We use two steps and a simple tool to visualize a
company’s competitive strategies according to perceived
benefits and sacrifices. We conduct this visualization in the
case of an industrial company and its primary competitors.
The tool also helps managers create simulations to adjust
strategies according to customer perceptions and competi-
tors. This study adds another aspect to growing CPV lit-
erature by developing an analytical model that uses CPV to
simulate and predict a firm’s competitive strategies. The
model helps managers create, implement, and control
strategies. We encourage managers to consider CPV and
competitors’ CPV before choosing a strategy, and assess
CPV regularly to adjust positioning and communication.
The simulation (scroll bar, Fig. 4) allows managers to
assess predictive, alternative scenarios for value proposi-
tion, depending on competitor intensity. Using a model that
incorporates both intangible benefits (e.g., quality and
service) and sacrifices (e.g., perceived price and delivery
time), this study shows managers how to assess their
brands and services in dynamic markets.
Limitations and future research
Operationalization of the model was conducted using a
single case. Future research should continue to opera-
tionalize the model, but for more valid results regarding
145
relationships between CPV and competitive strategies,
research should validate the link between the value of each
firm and its market share. It would also be relevant to
assess other sectors and industries, and consumer markets.
Future research should also consider a company’s financial
performance and its capabilities. The definition of CPV
from the literature (i.e., benefices minus sacrifices) sug-
gests that consumers perceive that benefits are equal in
importance to sacrifices. However, prospect theory (Kah-
neman and Tversky 1979) suggests that people place more
importance on losses rather than gains when they make
decisions in risky contexts. Consequently, future research
should expand the current model by conceptualizing CPV
as a combination of weighted benefits and sacrifices
according to context. Researchers should use experimental
methods to assess this combination. This study begins a
new stream of value modeling from a customer’s per-
spective. Predictive modeling represents an alternative
approach to the traditional CPV common in marketing
research, and offers several modeling and managerial
benefits.
Appendix A
Questionnaire (evaluation of pairs)
Here is the list of various combinations of benefits (sacri-
fices) for the purchase of industrial pumps. Thank you to
choose for each pair, the important benefit (sacrifice) by
circling the letter following your choice. Also, please
indicate the degree of preference of your choice on a scale
of 1–7. 1: same preference and 7: great preference.
146 S. Echchakoui

Same Great
Preference Preference
Quality of After sales
at b 1 2 3 4 5 6 7
materials service

Preference Intensity (on a scale

Perceived benefits
A or B of 1 to 7)

After sales service

Quality of
materials
Availability of parts
After sales service Availability of parts

Preference Intensity (on a scale

Perceived sacrifices
A or B of 1 to 7)
Price Delivery time

Appendix B

AHP method As the random index RI is equal to 1.24 for a number of

criteria n equal to 6, the coherence ratio.
 
The coherence ratio is calculated using the following for- CR is equal to 0.55% CR = CI RI . The latter is less than
ðkmax nÞ
mula: CR ¼ CI RI, CI ¼ n1 (kmax is the maximum 10%, therefore, the overall comparison matrix is suffi-
eigenvalue of the global comparison matrix) and RI is the ciently consistent (Saaty 1970) .
random index whose value depends on the number of
benefits (sacrifices) compared.
According to Saaty (1970), IR less than 10% indicates
that the comparison matrix is sufficiently coherent.
An analytical model that links customer-perceived value… 147

Weights calculation of benefits with Excel

Number of benefits:

Quality of After sales Availability

Benefits Weight
materials service of parts
Quality of
Quality of materials 55% 1 2.95 2.21
materials
After sales
After sales service 26% 1/3 1 2.91
service
Availability of
Availability of parts 19% 4/9 1/3 1
parts

RI 0.58
λ 3.09
CI 0.04
CR 7.76% <10%

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An analytical model that links customer-perceived value…
Said Echchakoui is a Professor of Marketing at the University of
Quebec at Rimouski. He holds DBA degree from the University of
Sherbrooke, Quebec, Canada. He is affiliated at the Association of
Professional Engineers & Geoscientists of New Brunswick, Canada.
His research interests focus on sales force, relationship marketing,
modeling, strategy, and loyalty. His work has been published in
journals such as the European Journal of Marketing, Journal of
149
Retailing and Consumer Services, Recherche et Applications en
Marketing, Journal of Modelling in Management, Journal of Global
Marketing and Global Business and Organizational Excellence, and in
proceedings such as The Annual Conference of the Journal of the
Academy of Marketing Science, and The National Conference in
Sales Management.
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