Preference regression is a statistical technique used by marketers to determine consumers’
preferred core benefits. It usually supplements
product positioning
Positioning refers to the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors and different from the concept of brand awareness. In order to position products or brands, compan ...
techniques like
multi dimensional scaling
Multidimensional scaling (MDS) is a means of visualizing the level of similarity of individual cases of a dataset. MDS is used to translate "information about the pairwise 'distances' among a set of n objects or individuals" into a configurati ...
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 observed ...
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 serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
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 task of grouping a set of objects in such a way that objects in the same group (called a cluster) are more similar (in some sense) to each other than to those in other groups (clusters). It is a main task of ...
. This creates clusters that reflect
market segment
In marketing, market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as ''segments'') based on some type of shared charact ...
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 process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...
*
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 the customers and how it is distinguished from the products of the competitors and different from the concept of brand awareness. In order to position products or brands, compan ...
*
Marketing research
Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix i ...
*
Perceptual mapping
Perceptual mapping or market mapping is a diagrammatic technique used by asset marketers that attempts to visually display the perceptions of customers or potential customers. The positioning of a brand is influenced by customer perceptions rather ...
*
Multidimensional scaling
Multidimensional scaling (MDS) is a means of visualizing the level of similarity of individual cases of a dataset. MDS is used to translate "information about the pairwise 'distances' among a set of n objects or individuals" into a configurati ...
*
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 observed ...
*
Linear discriminant analysis#Marketing
*
Preference-rank translation
Preference-rank translation is a mathematical technique used by marketers to convert stated preferences into purchase probabilities, that is, into an estimate of actual buying behaviour. It takes survey data on consumers’ preferences and conve ...
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