Summary
Summary Consumer Model in Modern Economic Environment
- Module
- Economics
- Institution
- Aberystwyth University (UWA)
Consumer Model in Modern Economic Environment
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1Consumer Model in Modern Economic Environment
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Introduction
Customer modeling is the technique of forecasting and predicting behavioral
characteristics of consumers' possible alternatives. Identifying marketing and campaigning goals
and maximizing forecasting analyses are all part of the process. Response modeling is one of the
aspects of consumer modeling. Modeling improves an organization's understanding of each
client and determines whether customers in a given segment are suitable for marketing
promotions. Verification and assessment of gathered consumers' data are part of response
modeling (Juneja, 2021). Customers are ranked based on their willingness to respond to a
particular program after data analysis. Division of Customers into subgroups follows, and each
sub-group is assigned a percentage of response. Business professionals and decision-makers then
decide the actual number of clients for use in that specific advertisement.
Secondly, prediction of customer behavior is another aspect of consumer modeling. All
businesses want to know how much their current customers are worth in the future. Customers'
lifetime value and profitability predictions involve modeling techniques that consider factors
such as the likelihood of purchasing products, frequency in buying products, expenditure
capacities, allegiance, and the use of programs and assistance. This predictive analytics help with
promotional activities, economic and technological prediction, client financial planning, and
wealth management, among other things. The third aspect is the optimization of return on
investment. According to Harrison et al. (2020), the assets' capabilities estimate the return on
investment. Enterprises typically achieve the best return on investment through their advertising
campaigns by modeling customer pricing elasticity so that each client can receive a valid offer.
As a result, the product's profit margin grows at a minimal cost to the company.
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