Read the summary and the most important questions on Marketing Metrics

• Lecture 1 - Consumer Preferences

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• Customer needs consist of two types:

  • Psychological needs
  • Functional needs

• Customer value measurement approaches:

  • Objective measure of value
  • Perceptual measure of value
  • Behavioral measure of value

• What is  product from a functional perspective?

  A collection of attributes

• How does conjoint work?

  • Respondents evaluate bundles
  • Regress the rating (or choice) on the attribute levels
  • Uncover the relative importance of each attribute

• The process of a conjoint study:

  1. Attributes
  2. Attribute levels
  3. Profiles
  4. Type of conjoint
  5. Utilities/part-worths

• Lecture 2 - Product Selection and Pricing

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• Two types of choice rules

  • Maximum utility (deterministic)
  • Logit rule (probabilistic)

• Reasons why utility in conjoint is not the same as utility in reality:

  1. Misperceptions of misleading promoted product attributes
  2. Unrealistic personal probability judgements on contingent events
  3. Instabilities in tastes such as time-inconsistent discounting and unanticipated habit-formation or addiction
  4. Flaws in the process of utility maximization

• Ways to improve predictions from conjoint

  • Improve the conjoint
  • Incentive compatibility
  • Adjust for "awareness" and "distribution"

• Demand-oriented pricing strategies

  • Perceived value pricing (Gabor-Granger)
  • Van Westendorp method
  • Optimization based on preferences

• Different ways to uncover price responses:

  • Economic value to the customer
  • Survey methods
  • Price experiments and historical data