Ou, C. S., Lee, T. C., Cho, C. C., and Lin, H. M. 2016. A Case Study of Customer Profitability Determinants of a Pharmaceutical Company. NTU Management Review, 26 (3): 93-118. https://doi.org/10.6226/NTUMR.2016.JULY.R.10029
Chin-Shyh Ou, Professor, Department of Accounting and Information Technology, National Chung Cheng University
Tsui-Chin Lee, Master, Department of Accounting and Information Technology, National Chung Cheng University
Chia-Ching Cho, Assistant Professor, Department of Accounting and Information Technology, National Chung Cheng University
Huey-Meei Lin, Adjunct Assistant Professor, Department of Accounting, Feng Chia University
Abstract
The goal of this study is to examine the determinants of customer profit contribution of a pharmaceutical company using a large Taiwanese pharmaceutical firm as an example. The empirical results show that average customer order size, total annual order amount, and new product purchase ratio are all positively and significantly associated with customer profit contribution, while customer maintenance cost is negatively and significantly associated with
customer profit contribution. From an academic perspective, this study contributes to the related literature on the analysis of customer profit contribution. From a practical perspective, the result of this study suggests that a firm may adjust its customer relationship management strategy according to the determinants of customer profit contribution to improve its operating performance and firm value.
Keywords
pharmaceutical companycustomer profitabilitycustomer relationship management