R for Marketing Research and Analytics

Chris Chapman and Elea McDonnell Feit
February 2016

Chapter 13: Choice Modeling (Choice-based conjoint analysis)

Website for all data files:
http://r-marketing.r-forge.r-project.org/data.html

Designing new products

Chevrolet Silverado

When creating a new product like this Chevrolet Silverado, designers often face tough decisions.

  • Should the truck have a smaller bed so that we can give more leg room to the passengers?
  • Should we make the truck larger, even though the fuel economy will go down?

Finding the voice of the customer

Homer Simpson Car

Better designers spend time talking to potential customers about what they want and that is sort-of helpful.

But customers typically want “everything” and if you listen to them you end up with The Homer.

Key idea

  1. Ask customers to choose from among alternative designs (something consumers do every day).
  2. Use a choice model to infer their preferences from the choices.
  3. Predict whether they will buy alternative designs using the model.

Example choice question