Discrete Choice Modeling

What is it?

Most versatile analytical tool to measure attribute tradeoffs

  • Measures how buyers/consumers value components of a product/service bundle
     

  • Optimizes product/service offering
     

  • Simulator allows for scenario planning
     

  • Can combine with pricing and margin data for financial planning

How does it work?

  • The product/service is broken down into its component parts and the different offerings within each part. 

  • Different product concepts are created by varying those offerings.

  • Respondents are shown     3-4 product concepts at a time and asked to pick the concept they prefer. This task is repeated many times, showing a different set of product concepts in each task.

  • Based on respondents' evaluations of the concepts, we figure out how much unique value (utility) each feature adds.

Common Applications

Discrete choice modeling has many applications for marketing, sales, new product development, and corporate program development.

 

  • Product redesign and line extensions

  • Pricing

  • Packaging development

  • Communications

  • Quantifying purchase decision hierarchy (Consumer Decision Trees)

  • Optimizing corporate programs

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