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The customer equity paradigm is readily implemented in relationship businesses where the distinction between a prospect and an existing customer is unambiguous. That enables firms in such industries to be customer and long-term focused in the allocation of their marketing resources. This is not the case in frequently purchased product categories, where customers may switch back and forth between competing brands, and even consume multiple brands in the same time period. However, by adopting an always-a-share customer definition and using a probabilistic classification of active and inactive customers, paper demonstrates that measures of customer equity may still be obtained in such categories, using readily available scanner panel data. As a result, the brands' customer equity levels may be evolving in different directions that are not readily apparent.
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