10,914 research outputs found

    The Strategic Implications of Scale in Choice-Based Conjoint Analysis

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    Choice-based conjoint (CBC) studies have begun to rely on simulators to forecast equilibrium prices for pricing, strategic product positioning, and patent/copyright valuations. Whereas CBC research has long focused on the accuracy of estimated relative partworths of attribute levels, predicted equilibrium prices and strategic positioning are surprisingly and dramatically dependent on scale: the magnitude of the partworths (including the price coefficient) relative to the magnitude of the error term. Although the impact of scale on the ability to estimate heterogeneous partworths is well known, neither the literature nor current practice address the sensitivity of pricing and positioning to scale. This sensitivity is important because (estimated) scale depends on seemingly innocuous market-research decisions such as whether attributes are described by text or by realistic images. We demonstrate the strategic implications of scale using a stylized model in which heterogeneity is modeled explicitly. If a firm shirks on the quality of a CBC study and acts on incorrectly observed scale, a follower, but not an innovator, can make costly strategic errors. Externally valid estimates of scale are extremely important. We demonstrate empirically that image realism and incentive alignment affect scale sufficiently to change strategic decisions and affect patent/copyright valuations by hundreds of millions of dollars

    Unfolding a Product’s Ethical Bundle

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    The aim of the current paper is to examine the relative importance and trade-offs of the attributes that compose an ethical product as perceived by consumers. Conjoint analysis results reveal that supporting a philanthropic cause, the lack of minors in the production process and recycled materials are the features of the ethical product that present increased utility. Marketers could use such results in order maximise average utility of the ethical product given the cost constraint of its attributes

    STRATEGIC IMPLICATIONS OF CONSUMER FOOD SAFETY PREFERENCES

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    This study examines the tradeoffs consumers are willing to make relative to food safety attributes and other product attributes, such as quality and price, and develops implications for both the government and private sector firms. Conjoint analysis was used to elicit consumersÂ’ preferences for fresh Red Delicious apples. The attributes studied include price, product quality as depicted by the level of defects, a variable representing the level of pesticide usage and the associated cancer risk, and a variable representing different levels of government inspection. The results indicated that most consumers have a strong preference for increased food safety. Government policy options that are explored include stricter production standards, improved regulatory monitoring, and government-defined labels. Private industry options that are examined include grower labels, retailer labels, and third party labels.Food Consumption/Nutrition/Food Safety,

    The Role of the Mangement Sciences in Research on Personalization

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    We present a review of research studies that deal with personalization. We synthesize current knowledge about these areas, and identify issues that we envision will be of interest to researchers working in the management sciences. We take an interdisciplinary approach that spans the areas of economics, marketing, information technology, and operations. We present an overarching framework for personalization that allows us to identify key players in the personalization process, as well as, the key stages of personalization. The framework enables us to examine the strategic role of personalization in the interactions between a firm and other key players in the firm's value system. We review extant literature in the strategic behavior of firms, and discuss opportunities for analytical and empirical research in this regard. Next, we examine how a firm can learn a customer's preferences, which is one of the key components of the personalization process. We use a utility-based approach to formalize such preference functions, and to understand how these preference functions could be learnt based on a customer's interactions with a firm. We identify well-established techniques in management sciences that can be gainfully employed in future research on personalization.CRM, Persoanlization, Marketing, e-commerce,

    Managing customer knowledge during the concept development stage of the new food product development process

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    New product development (NPD) is a knowledge intensive process where the generation of new ideas and concepts requires detailed knowledge of both products and customers. The high reported failure rates for innovative functional beverages suggest an inability to manage customer knowledge effectively, as well as a lack of knowledge management between functional disciplines involved in the NPD process. This research explored the concept of managing customer knowledge at the early stages of the NPD process, through the use of advanced concept optimisation methods, and applied it to the development of a range of functional beverages. A conjoint - based survey was administered to four hundred customers in Ireland. This research identified two hypothetical functional beverage concepts with high levels of customer acceptance. Managing customer knowledge during the concept development stage of the NPD process can assist firms overcome customer acceptance issues associated with innovative products. Methodologies that advance both a firm's understanding of customers' choice motives and value systems, and its knowledge management process, can increase the chances of new product success in international food and beverage markets.Knowledge Management, New Product Development, Functional Beverages, Marketing,

    Buying High Tech Products

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    Prior research on technology-intensive (TI) markets makes abstraction of the social context in which transactions take place. In contrast with this prior literature, the authors show that buyer-vendor transactions in TI markets are relationally and structurally embedded in an interfirm network. Their main premise is that buyers in TI markets prefer vendors with whom they can share a strong tie, and that in turn buyers want these vendors to share strong ties with their component manufacturers. This is an important addition to TI literature and to the on-going debate on the strength of ties in the sociology, management and marketing literatures. The authors also specifically consider how characteristics focal to TI markets, such as the know-how buyers possess or the pace of technological change they perceive, affect the extent to which buying behavior is relationally and structurally embedded. An empirical test in the computer network market shows good support for the developed theory.tie strength;embeddedness;buying behavior;conjoint analysis;technology-intensive markets

    Definition, Measurement and Determinants of the Consumer's Willingness to Pay: a Critical Synthesis and Directions for Further Research

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    Differentiated prices, bundling, Web auctions : firms' pricing practices are evolving. When there is no market or for customised pricing, the willingness-to-pay concept seems to be interesting. This article aims at presenting a synthesis of the marketing research stream relative to willingness to pay. First, a definition of the concept is given and compared to other similar concepts, notably reference price and acceptable price. Then the methods of measurement are presented, compared to those used to measure elasticity and criticized. Furthermore, the research on external determinants of willingness to pay is commented. Finally, numerous directions for further research are proposed.willingness to pay, price elasticity, reference price, acceptable price, conjoint analysis, contingent valuation, Vickrey auctions, BDM lottery, prices

    Managerial Segmentation of Service Offerings in Work Commuting, MTI Report WP 12-02

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    Methodology to efficiently segment markets for public transportation offerings has been introduced and exemplified in an application to an urban travel corridor in which high tech companies predominate. The principal objective has been to introduce and apply multivariate methodology to efficiently identify segments of work commuters and their demographic identifiers. A set of attributes in terms of which service offerings could be defined was derived from background studies and focus groups of work commuters in the county. Adaptive choice conjoint analysis was used to derive the importance weights of these attributes in available service offering to these commuters. A two-stage clustering procedure was then used to explore the grouping of individual’s subsets into homogeneous sub-groups of the sample. These subsets are commonly a basis for differentiation in service offerings that can increase total ridership in public transportation while approximating cost neutrality in service delivery. Recursive partitioning identified interactions between demographic predictors that significantly contributed to the discrimination of segments in demographics. Implementation of the results is discussed
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