Volumetric Conjoint Analysis

29 Pages Posted: 2 Jun 2004  

Jaehwan Kim

Korea University Business School (KUBS)

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics

Peter E. Rossi

University of California, Los Angeles (UCLA) - Anderson School of Management

Date Written: May 2004

Abstract

The quantity of any good demanded by consumers is dependent on the attributes and benefits of an offering, the rate at which marginal utility of the offering decreases, and the availability of substitutes. Traditional conjoint models focus on attributes and benefits, but have not incorporated satiation or diminishing marginal utility. Moreover, traditional conjoint methods are designed to make market share predictions and are difficult to adapt to modeling volume data. A new demand model is proposed in which product attributes are related to satiation parameters, allowing for volume predictions and identification of product line configurations that maximize profits. Data from a national beverage manufacturer is used to illustrate and compare the proposed model to traditional analyses. The estimated model is used to design an optimal retail product offering.

Keywords: Conjoint, volume data, discrete-continuous, demand models

JEL Classification: M3, C8, C9

Suggested Citation

Kim, Jaehwan and Allenby, Greg M. and Rossi , Peter E., Volumetric Conjoint Analysis (May 2004). Available at SSRN: https://ssrn.com/abstract=552862 or http://dx.doi.org/10.2139/ssrn.552862

Jaehwan Kim

Korea University Business School (KUBS) ( email )

Anam-Dong, Seongbuk-Gu
Seoul 136-701, 136701
Korea
822.3290.2603 (Phone)
822.922.7220 (Fax)

Greg M. Allenby

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

Fisher Hall 524
2100 Neil Ave
Columbus, OH 43210
United States

Peter E. Rossi (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States
773-294-8616 (Phone)

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