Preference regression is a statistical technique used by marketers to determine consumers’
preferred core benefits. It usually supplements
product positioning techniques like
multi dimensional scaling or
factor analysis
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. For example, it is possible that variations in six observe ...
and is used to create ideal vectors on
perceptual maps.
Application
Starting with raw data from surveys, researchers apply positioning techniques to determine important dimensions and plot the position of competing
products
Product may refer to:
Business
* Product (business), an item that can be offered to a market to satisfy the desire or need of a customer.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
...
on these dimensions. Next they
regress the survey data against the dimensions. The independent variables are the data collected in the survey. The dependent variable is the preference datum. Like all regression methods, the computer fits weights to best predict data. The resultant regression line is referred to as an ideal vector because the slope of the vector is the ratio of the preferences for the two dimensions.
If all the data is used in the regression, the program will derive a single equation and hence a single ideal vector. This tends to be a blunt instrument so researchers refine the process with
cluster analysis
Cluster analysis or clustering is the data analyzing technique in which task of grouping a set of objects in such a way that objects in the same group (called a cluster) are more Similarity measure, similar (in some specific sense defined by the ...
. This creates clusters that reflect
market segment
In marketing, market segmentation or customer segmentation is the process of dividing a consumer or business market into meaningful sub-groups of current or potential customers (or consumers) known as ''segments''. Its purpose is to identify pr ...
s. Separate preference regressions are then done on the data within each segment. This provides an ideal vector for each segment.
Alternative methods
Self-stated importance method is an alternative method in which direct survey data is used to determine the weightings rather than statistical imputations. A third method is
conjoint analysis
Conjoint analysis is a survey-based statistical technique used in market research that helps determine how people value different attributes (feature, function, benefits) that make up an individual product or service.
The objective of conjoint an ...
in which an additive method is used.
See also
*
Marketing
Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce.
Marketing is usually conducted by the seller, typically a retailer or ma ...
*
Product management
Product management is the business process of planning, developing, launching, and managing a product or service. It includes the entire lifecycle of a product, from ideation to development to go to market. Product managers are responsible for ...
*
Positioning (marketing)
Positioning refers to the place that a brand occupies in the minds of customers and how it is distinguished from the products of the competitors. It is different from the concept of brand awareness. In order to position products or brands, compani ...
*
Marketing research
Marketing research is the systematic gathering, recording, and analysis of qualitative data, qualitative and quantitative data, quantitative data about issues relating to marketing products and services. The goal is to identify and assess how chan ...
*
Perceptual mapping
*
Multidimensional scaling
Multidimensional scaling (MDS) is a means of visualizing the level of similarity of individual cases of a data set. MDS is used to translate distances between each pair of n objects in a set into a configuration of n points mapped into an ...
*
Factor analysis
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. For example, it is possible that variations in six observe ...
*
Linear discriminant analysis#Marketing
*
Preference-rank translation
References
*{{Cite book , last1 = Park , first1 = S. T. , last2 = Chu , first2 = W. , doi = 10.1145/1639714.1639720 , chapter = Pairwise preference regression for cold-start recommendation , title = Proceedings of the third ACM conference on Recommender systems - RecSys '09 , pages = 21 , year = 2009 , isbn = 9781605584355
*Jarboe, G.R.; McDaniel, C.D.; Gates, R.H. (1992). "Preference regression modeling of multiple option healthcare delivery systems". ''Journal of Ambulatory Care Marketing'', 5(1), p.71-82.
Choice modelling
Quantitative marketing research
Product management
Dimension reduction
Marketing analytics