A spatial interaction model for deriving joint space maps of bundle compositions and market segments from pick-any/J data: An application to new product options

We propose an approach for deriving joint space maps of bundle compositions and market segments from three-way (e.g., consumers x product options/benefits/features x usage situations/scenarios/time periods) pick-any/J data. The proposed latent structure multidimensional scaling procedure simultaneously extracts market segment and product option positions in a joint space map such that the closer a product option is to a particlar segment, the higher the likelihood of its being chosen by that segment. A segment-level threshold parameter is estimated that spatially delineates the bundle of product options that are predicted to be chosen by each segment. Estimates of the probability of each consumer belonging to the derived segments are simultaneously obtained. Explicit treatment of product and consumer characteristics are allowed via optional model reparameterizations of the product option locations and segment memberships. We illustrate the use of the proposed approach using an actual commercial application involving pick-any/J data gathered by a major hi-tech firm for some 23 advanced technological options for new automobiles.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/47207/1/11002_2004_Article_BF00434905.pd