Market Segmentation with Choice-Based Conjoint Analysis

Marketing Letters, Volume 6, Issue 2, pp 137-147

Posted: 8 Jun 2016

See all articles by Wayne S. DeSarbo

Wayne S. DeSarbo

Pennsylvania State University

Venkatram Ramaswamy

University of Michigan, Stephen M. Ross School of Business

Steven Cohen

Stratford Associates

Date Written: March 1995

Abstract

Choice-based conjoint analysis has increased in popularity in recent years among marketing practitioners. The typical practice is to estimate choice-based conjoint models at the aggregate level, given insufficient data for individual-level estimation of part-worths. We discuss a method for market segmentation with choice-based conjoint models. This method determines the number of market segments, the size of each market segment, and the values of segment-level conjoint part-worths using commonly collected conjoint choice data. A major advantage of the proposed method is that current (incomplete) data collection approaches for choice-based conjoint analysis can still be used for market segmentation without having to collect additional data. We illustrate the proposed method using commercial conjoint choice data gathered in a new concept test for a major consumer packaged goods company. We also compare the proposed method with ana priori segmentation approach based on individual choice frequencies.

Keywords: Choice experiments, conjoint analysis, market segmentation

Suggested Citation

DeSarbo, Wayne S. and Ramaswamy, Venkatram and Cohen, Steven, Market Segmentation with Choice-Based Conjoint Analysis (March 1995). Marketing Letters, Volume 6, Issue 2, pp 137-147, Available at SSRN: https://ssrn.com/abstract=2791003

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Venkatram Ramaswamy

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109-1234
United States
734-763-5932 (Phone)
734-936-0279 (Fax)

Steven Cohen

Stratford Associates

500 Chapman St.
# 3
Canton, MA 02021
United States

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