Customer Segmentation in Mobile Carrier Choice Modeling

Abstract

Service choice behavior of customers is becoming complicated and diversified in the mobile phone market. The aim of this paper is to analyze mobile carrier choice behavior and clarify the customer segments and their decision-making factors. We classify mobile phone customers into two groups: churning customers and stable customers. Customer segmentation is carried out based on survey data for each customer group in order to clarify the decision-making factors. We propose a new service choice modeling with regard to mobile carriers based on the customer segmentation results.

Mobile-carrier Choice Modeling Framework Under Competitive Conditions

“…It is impossible to analyze the demand of services or products only by using customer choice-behavior models. We proposed a Framework for Scenario Simulation (FSS) to analyze market structure and estimate service demand [6], [7], [8], [9], [10], [11], [12], [13], [14], [15]. The objective of the FSS is not to obtain a demand-forecasting result but to simulate scenarios under assumed conditions according to service changes.…”

“…We have analyzed the mobile-carrier choice behavior by using the survey data conducted by the Mobile Marketing Data Laboratory in Japan to investigate the trend of mobile phone purchase behavior after the introduction of Mobile Number Portability (MNP) [10]. It is found that charge issues, phones or their functions to be used are related to the decision-making of churning customers.…”

“…This implies that we should consider new variables expressing customer preference factors to construct a mobile-carrier choice model. We proposed a new modeling with the following latent variables [10]:…”

“…In general, observed variables such as charge, functions and performance are used as explanatory variables in these models. We analyzed the decision-making factors to construct a mobile-carrier choice model [10]. We classify mobile phone customers into two groups: churning customers and stable customers.…”

“…Customer segmentation was carried out based on survey data for each customer group in order to clarify the decisionmaking factors. The results of customer segmentation suggest that we should consider incentive factors and restrictive factors as decision-making factors to construct a mobile-carrier choice model [10]. We proposed a new mobile-carrier choice model that takes into account incentive factors and restrictive factors as decision-making factors.…”