choices advanced discrete choice...

CHOICES ™ is Burke’s proprietary extension of Discrete Choice Modeling that has been applied in dozens of situations to: – Set prices for maximum profitability. – Configure a new product or service. – Re-configure an existing product to increase profitability. – Evaluate whether a new concept has market viability. – Better understand what features drive customer preferences. – Design line extensions that minimize “cannibalization” of existing products. The CHOICES technique is designed specifically to overcome the problems of inaccuracy and inflexibility often seen in Discrete Choice Modeling that uses a “total sample” or “aggregated” approach. CHOICES creates predictions at the individual respondent level, taking advantage of personal information known about the people in the research sample, such as category usage, demographics, attitudes, etc. The primary advantages of the Burke approach are that it provides better fitting and more accurate models of choice behavior, and provides greatly enhanced analytical flexibility for market segmentation, subgroup analyses, and target market profiling. By using individual respondent level information, which is shown to substantially improve the predictive power of choice models, the algorithm behind CHOICES not only produces results at the individual level but also overall results that are simply better, and which contain less statistical error, by virtue of being based on more information. CHOICES is adaptable to most data collection modes, including Internet-based interviewing. In fact, there are specific design advantages associated with an electronically-administered, as opposed to paper-and-pencil, discrete choice exercise. CHOICES provides a powerful way to understand what it is about a product or service that drives customers’ interest in it and their purchase choices. It is also an excellent way to isolate the effects of a single change that a company is considering making in its product or marketing strategy. CHOICES ™ Advanced Discrete Choice Modeling Understanding The Buyer Choice Process At Burke, we believe strongly that individual consumers are just that…individual. They differ from each other in important ways that determine what they consider when they make purchase decisions and what products they buy. Consequently, consumer choice models should be created at the individual level. That means that the value and relative attractiveness of product features, brand and price is determined uniquely for each individual we survey. Individual-level models are necessary to learn which types of customers are interested in a particular product, so they can be effectively targeted in marketing efforts. APPLYING KNOWLEDGE IMPROVING DECISIONS ™ FOR MORE INFORMATION ABOUT BURKE GO TO Burke.com 800.688.2674 [email protected] ©2005 Burke Incorporated. All rights reserved. The Fine Art of Marketing Research

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Page 1: CHOICES Advanced Discrete Choice Modelingburke.com/Library/ProductSheets/Choices_02.08.07.qxp.pdf2007/02/08 · market segmentation, subgroup analyses, and target market profiling

CHOICES™ is Burke’s proprietary extension of Discrete ChoiceModeling that has been applied in dozens of situations to:

– Set prices for maximum profitability.– Configure a new product or service.– Re-configure an existing product to increase profitability.– Evaluate whether a new concept has market viability.– Better understand what features drive customer preferences.– Design line extensions that minimize “cannibalization” of

existing products.

The CHOICES technique is designed specifically to overcome theproblems of inaccuracy and inflexibility often seen in Discrete ChoiceModeling that uses a “total sample” or “aggregated” approach.

CHOICES creates predictions at the individual respondent level,taking advantage of personal information known about the people in the research sample, such as category usage, demographics,attitudes, etc. The primary advantages of the Burke approach are that it provides better fitting and more accurate models of choicebehavior, and provides greatly enhanced analytical flexibility formarket segmentation, subgroup analyses, and target market profiling.

By using individual respondent level information, which is shown to substantially improve the predictive power of choice models, the algorithm behind CHOICES not only produces results at theindividual level but also overall results that are simply better, andwhich contain less statistical error, by virtue of being based on moreinformation. CHOICES is adaptable to most data collection modes,including Internet-based interviewing. In fact, there are specificdesign advantages associated with an electronically-administered, as opposed to paper-and-pencil, discrete choice exercise.

CHOICES provides a powerful way to understand what it is about a product or service that drives customers’ interest in it and theirpurchase choices. It is also an excellent way to isolate the effectsof a single change that a company is considering making in itsproduct or marketing strategy.

CHOICES™ Advanced Discrete Choice Modeling

Understanding The Buyer Choice Process

At Burke, we believe strongly thatindividual consumers are justthat…individual.They differ from eachother in important ways that determinewhat they consider when they makepurchase decisions and what productsthey buy. Consequently, consumerchoice models should be created at theindividual level.That means that thevalue and relative attractiveness ofproduct features, brand and price isdetermined uniquely for each individualwe survey. Individual-level models arenecessary to learn which types ofcustomers are interested in a particularproduct, so they can be effectivelytargeted in marketing efforts.

A P P L Y I N G K N O W L E D G E I M P R O V I N G D E C I S I O N S™

FOR MORE INFORMATION ABOUT BURKE GO TO

Burke.com

800.688.2674

[email protected]

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