A Study on the Formation and Theoretical Basis of Customer Equity Theory

This paper examines both the formation and the theoretical basis of customer equity theory.The author states that the forma- tion and development of customer equity theory is directly affected by the changes in marketing management philosophies of businesses.To maximize customer equity,one has to implement such four categories of strategies as customer strategy,market development strategy,branding strategy as well as competition strategy,all of which are designed and implemented in accordance with the theories and concepts of Customer Pyramid Model,Customer Relationship Life Cycle,Customer Delivered Value,Customer Satisfaction and Customer Loyalty.The author con- cludes that customer equity theory is an appropriate marketing theory that helps guide businesses to succeed in modem competition.