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Real world performance of choice-based conjoint models

Natter, Martin and Feurstein, Markus (2001) Real world performance of choice-based conjoint models. Report Series SFB "Adaptive Information Systems and Modelling in Economics and Management Science", 58. SFB Adaptive Information Systems and Modelling in Economics and Management Science, WU Vienna University of Economics and Business, Vienna.

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Conjoint analysis is one of the most important tools to support product development, pricing and positioning decisions in management practice. For this purpose various models have been developed. It is widely accepted that models that take consumer heterogeneity into account, outperform aggregate models in terms of hold-out tasks. The aim of our study is to investigate empirically whether predictions of choice-based conjoint models which incorporate heterogeneity can successfully be generalized to a whole market. To date no studies exist that examine the real world performance of choice-based conjoint models by use of aggregate scanner panel data. Our analysis is based on four commercial choice-based conjoint pricing studies including a total of 43 stock keeping units (SKU) and the corresponding weekly scanning data for approximately two years. An aggregate model serves as a benchmark for the performance of two models that take heterogeneity into account, hierarchical Bayes and latent class. Our empirical analysis demonstrates that, in contrast to the performance using hold-out tasks, the real world performance of hierarchical Bayes and latent class is similar to the performance of the aggregate model. Our results indicate that heterogeneity cannot be generalized to a whole market and suggest that aggregate models are sufficient to predict market shares. (author's abstract)

Item Type: Paper
Keywords: pricing research / Choice Based Conjoint Analysis / hierarchical Bayes / latent class / heterogeneity
Divisions: Departments > Informationsverarbeitung u Prozessmanag. > Produktionsmanagement > Taudes
Departments > Finance, Accounting and Statistics > Statistics and Mathematics
Departments > Marketing > Service Marketing und Tourismus
Departments > Informationsverarbeitung u Prozessmanag. > Informationswirtschaft
Depositing User: Repository Administrator
Date Deposited: 08 Mar 2002 14:03
Last Modified: 25 Oct 2014 09:27
URI: http://epub.wu.ac.at/id/eprint/376


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