Problem: Understand and Forecast Preference for Bras

1
Problem Understand and Forecast Preference for
Bras

• 9 attributes were identified for the
  product(2) Closure Front Back(3) Lace All
  Over Lace Trim None(2) Underwire Yes
  No(3) Cup Lightly Padded Padded No
  Lining(3) Price 3.99 7.99
  11.99(2) Color Basic White, Beige etc
  Fashion Bright Colors(3) Fabric Satin/Nylon
  Cotton Stretch Lace(3) Strap Padded Stretch
  Camisole(2) Pushup Yes No
• 2x3x2x3x3x2x3x3x2 3888 different combinations

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Problem To Design a Methodology that will allow
us to predict market share for any of the 3888
combinations of features
Fractional Factorial Design
3
Analysis Multiple Regression for a Single
Respondent
The output is a set of utility values for that
respondentthat represent their value on each of
the 9 attributesand the 23 feature levels.
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The Simulations How Do Alternative Product
Configurations Compare?

• Alternative Product Simulation Descriptions are
  Prepared
• Brand Feature Level Utilities Added Together For
  Each Respondent To Derive A Total Utility For the
  Hypothetical Product
• Choice Share Is Calculated For the Product
  Alternatives

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Alternative Scenarios Are Constructed To Forecast

• The profitability and/or market share for
  proposed new product concepts given the current
  offering of competitors
• The impact of new competitor products on profits
  or market share if we make no change in our
  competitive position
• Customer switch rates either (a) from out current
  products to a new product we offer (cannibalism),
  or (b) from our competitors products to our new
  products (draw)
• The differential response of items 1 - 3 by key
  market segments purchasing our product.

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Alternative Scenarios Are Constructed To Forecast

• Competitive reaction strategies given our
  introduction of a new product. Specifically,
  should a new product be introduced, and if so,
  what is the optimal design configuration for this
  new product? Further, should pricing or other
  attributes of our current products be modified in
  response to the competition?
• The differential response to alternative
  advertising strategies and/or advertising themes
• The customer response to alternative pricing
  strategies, specific price levels, and proposed
  price changes
• Response to distribution strategies focusing on
  such diverse problems as determining the optimal
  channel of distribution, number or type of
  outlets, or sale person quotas.

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Utility Levels
8
Simulation 1

• Product 1 Product 2
• (2) Closure Front Front(3) Lace All
  Over All Over(2) Underwire Yes No(3) Cup L
  ightly Padded No Lining(3) Price 7.99
  7.99(2) Color Basic Basic(3) Fabric Co
  tton Cotton(3) Strap Stretch Stretch(2) Pus
  hup No No

9
Simulation 1
10
Simulation 2
Product 1 Product 2 (2) Closure Front
Back(3) Lace None None(2) Underwire No
No(3) Cup No Lining No Lining(3) Price 7.
99 7.99(2) Color Basic Basic(3) Fabric
Cotton Cotton(3) Strap Stretch Stretch(2)
Pushup No No
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Simulation 2