Service-choice behaviour modelling constructed with multiple decision-making processes

Several models have been proposed to express customer preference variation. In this paper, we express it not by customer segmentation but by latent class. Not only decision-making factors but also decision-making processes differ according to the class. We propose a service-choice behaviour modelling constructed with multiple decision-making processes using an estimation method based on the expectation-maximisation algorithm. As an empirical experiment, we constructed a model of telephone service choice with optional services. We assume that there are two typical decision-making processes for this choice. One is to choose an optional service type first. The other is to choose a telephone company first. A nested structure model for the classified customer segment is constructed for each process. Namely, the model has two types of nested models which correspond to two decision-making processes. In a comparison with conventional models, we showed that the proposed model can improve the accuracy of the model.