The Difficulties in Measuring Individual Utilities of Product Attributes: A Choice Based Experiment

The study combines different theoretical approaches in the field of conjoint analysis to estimate the im-portance of product related attributes. This is of major importance in food marketing, where we still try to find a valid answer, in particular, how to measure the real willingness to pay (WTP) for specific product specifica-tions. Based on a comprehensive literature analysis, a common method was used to approximate the im-portance of several product attributes. As usually suggested in literature, we used discrete choice modeling and developed a choice based experimental design considering selected product attributes. The study object was frozen pizza, a convenience good frequently bought by most households. Up to this point, there is nothing special about the choice based experiment in comparison to direct measure-ment of the importance of product attributes. However, one of the core problems of discrete choice modeling – the approximation of individual utility functions – was then addressed by transforming the choices of con-sumers into scores. With these scores traditional conjoint measurement can be used to approximate individual utilities even in choice based experiments. The individual part-worth utilities will be compared with a usual but very complex approach to approximate individual part-worth utilities, the hierarchical Bayes method. Our ap-proach addresses methodological considerations concerning the restrictions of discrete choice modeling, namely the complexity of approximating individual utilities which is of huge importance in particular for market segmentation.

Schiefer, Gerhard
Rickert, Ursula
Deiters, Jivka
Issue Date:
Jun 29 2017
Publication Type:
Journal Article
Record Identifier:
Published in:
International European Forum, February 13-17, 2017, Innsbruck-Igls, Austria, 2017, Number 1
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 Record created 2017-06-29, last modified 2018-01-23

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