Carsten Hahn/Michael D. Johnson/Andreas Herrmann/ Frank Huber* CAPTURING CUSTOMER HETEROGENEITY USING A FINITE MIXTURE PLS APPROACH**

An approach for capturing unobserved customer heterogeneity in structural equation mod-eling is proposed based on partial least squares. The method uses a modified finite-mix-ture distribution approach. An empirical analysis using quality, customer satisfaction and loyalty data for convenience stores illustrates the advantages of the new method vis-à-vis a traditional market segmentation scheme based on well known grouping variables. The results confirm the assumption of heterogeneity in the individuals ’ perception of the antecedents and consequences of satisfaction and their relationships. The results also illustrate how the finite-mixture approach complements and provides insights over and above a traditional segmentation scheme. JEL-Classification: M31, C11.