Market segmentation with choice-based conjoint analysis

Wayne S. Desarbo, Venkatram Ramaswamy, Steven H. Cohen

Research output: Contribution to journalArticlepeer-review

127 Scopus citations

Abstract

Choice-based conjoint analysis has increased in popularity in recent years among marketing practitioners. The typical practice is to estimate choice-based conjoint models at the aggregate level, given insufficient data for individual-level estimation of part-worths. We discuss a method for market segmentation with choice-based conjoint models. This method determines the number of market segments, the size of each market segment, and the values of segment-level conjoint part-worths using commonly collected conjoint choice data. A major advantage of the proposed method is that current (incomplete) data collection approaches for choice-based conjoint analysis can still be used for market segmentation without having to collect additional data. We illustrate the proposed method using commercial conjoint choice data gathered in a new concept test for a major consumer packaged goods company. We also compare the proposed method with an a priori segmentation approach based on individual choice frequencies.

Original languageEnglish (US)
Pages (from-to)137-147
Number of pages11
JournalMarketing Letters
Volume6
Issue number2
DOIs
StatePublished - Mar 1995

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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