Analysing

Consumer Preferences
&
Consumer Perceptions

Suresh Malodia
Associate Professor SIBM Pune

Analysing Consumer Preferences

Understanding of consumer preferences is particularly important
for product policy (eg., what features to have, whether or not to
offer a new product) and pricing decisions. There are two proven
procedures for the actionable analysis of consumer preferences
Concept testing
Conjoint analysis.

 Concept test
A straightforward test: consumers are presented with product
idea and directly asked for their reaction
How likely would you be to buy this product.

Conjoint analysis
Its a in depth test that not only looks at the reactions to a
product idea but also gets insights into the underlying
preferences.

Concept Testing
Colgate Palmolive faced the issue of whether or not
to introduce a new toothbrush and how to position it.
Consumers reacted to the offering on a five-point
purchase intention scale, marking one box
87% consumers rated the concept in one of the top
two boxes.
Colgate
Precision

Similarly, when BIOPURE received FDA approval for a blood substitute

for dogs, it conducted a survey in which the product was described to
veterinarians who were then asked if they would try the product in
critical and non critical cases. At a price of $100, 95% reported being
willing to try for critical cases and 70% for non-critical cases.

Executing a Concept Test

How to communicate the concept
Colgate chose to present a positioning concept (i.e., product
concept was presented in a persuasive form by showing consumers
mock advertisements for the precision toothbrush)
Alternative could be to present a core idea only without an
accompanying marketing message.
core idea vs. positioning concept
The data to be collected from respondents
Intended purchase measure
Overall product diagnostics
Respondents profiling variables
Special attribute diagnostics

Data Type # 1: Purchase Measure

Likelihood of purchase
Expected amount.

Indicator
11 of
trial

Which statement best describes how

often you think you would buy this
product if it were conveniently
available to you

Once a week or more often

Sales volume per potential user in
Once every two or three weeks
time period =
Once a month
% of potential users in market
Once every two to three months
who try product
Once every four to six months
x
Purchase
Less often
Expected number of purchases in
measures from a
Never
the period for triers
concept test
x
typically are
Expected number of units per
designed to
purchase
measure the
three variables
on the right-hand

Data Type #2: Overall Product Diagnostics

Diagnostic data give insight into why the purchase data turned out the
way it did.
It usually assess the products perceived uniqueness (On a 1-5 scale
where 1 = very similar and 5 = quite distinct, how would you rate the
product relative to ones currently on the market?)
And believability (i.e., Does the respondent believe the product can
do what it claims?)
For example, can the Colgate Precision toothbrush remove 35% more plaque?

Since a high-uniqueness, high believability concept could still generate

low purchase interest, firms usually assess how salient the product is to
solving a consumers problem and its overall interest to the consumer.

Data Type #3: Specific Attribute Diagnostics

One method is the use of open-ended questions such as you said that you_____. What is it
specifically about the product that makes you feel this way?
Second approach is to collect data on perceptions of specific attributes and their importance to
the consumer. For ex, we might ask respondents exposed to a new Internet Service concept for
data on perception and importance scales as follow:

Perception: How do you perceive the service on each of the

following dimenions?
Excellen
t
Poor
Entertainment
Value
AttributeValue
Importance: How important is the attribute to you?
Educational
Very
Ease of Site
Importa
Not at all
Navigation
nt
Important
Entertainment
Value

Data Type #4: Respondents Profiling

Variables
The type of consumers who respond in different ways.
o Demographics
o Current purchase behaviour
o Perception of the category
o Satisfaction with current brands used
o Influence in actual purchase decision

Interpreting the Purchase Intent Data

Between 80% - 90% (Taylor, Houlahan & Gabriel, 1975)
Definitely will buy 19%, Probably will buy 64% (D Schwartz, 1987)

Conjoint Analysis
Conjoint analysisis a statistical technique used in market
research to determine how people value different attributes
(feature, function, benefits) that make up an individual product or
service.
The trick is, via construction of the value system, we bootstrap
ourselves up from asking about preferences on a small subset of
products being able to make predictions about relative
preference for any products with these attributes.
Ui = Ui1 + Ui2 + . . . . . . . . . . . . . + Uin

Understanding Consumer Perceptions

How consumers see the firm, brand, or product
relative to competitor.
To check whether or not the desired positioning has
been achieved or not in the mind of the consumer.
Collect perceptual data

Perceptual Mapping
Perceptual maps measure the way products are
positioned in the minds of consumers and show these
perceptions on a graph whose axes are formed by
product attributes. (Kardes, Cronley, & Cline, 2011).
A perceptual map represents customer perceptions
and preferences spatially by means of a visual display
(Ferrell & Hartline, 2008).

Applications of Perceptual Maps in NPD

Understanding market structure
Perceptions of a product concept
Directions to R&D efforts to satisfy customer better

Thank you