Commentaries and Rejoinder to “Balancing Risk and Return in a Customer Portfolio”

Tarasi et al.’s (2011) article titled “Balancing Risk and Return in a Customer Portfolio” makes a noteworthy contribution to customer portfolio management theory, an important subject that has yet to receive a great deal of research attention. This brief comment emphasizes a few issues regarding the application of modern financial portfolio theory to customer portfolio management. The reason for developing financial portfolio theory was to help financial investors make decisions regarding their securities market portfolios. As Devinney, Stewart, and Shocker (1985) argue in their comments on Cardozo and Smith’s (1983) work, applying financial portfolio theory to a marketing context requires substantive modifications to the theory because this context does not meet some of the critical assumptions in financial portfolio theory. In accordance with that perspective, I highlight some key issues with Tarasi et al.’s approach (2011) that require attention for the work to be truly useful.

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