Although there has been much conceptual evidence of the positive link between customer equity and firm’s performance, comparison of relationships between two firms based on customer equity and firm profitability is limited. However, there is an increasing demand for research that investigates the relationship between firms in the competitive market structure. Therefore, the goal of this research is to examine the role of customer equity on firm profitability by comparing two firms, in a customer equity setting. The result shows that the effect of newly acquired CE of the second top company is stronger than that of the top company while the effect of retained CE of the top company is stronger than that of the second top company. Overall, the results offer strategic implications for firms to implement a different customer equity strategy in this competitive market structure.

• Tae Ho Song(Pusan National University, Republic of Korea)
• Ji Yoon Kim(Ji Yoon Kim, Korea University, Republic of Korea)