Extant preference measurement research, including conjoint analysis, has been silent on the explicit influence of others in the formation of consumer preferences. This article proposes a new holistic framework of preference, "PIE," as well as a measurement method to remedy this problem. The new paradigm posits that consumers evaluate products on the basis of different "needs" determined by three sources: (1) P, the physical attributes of the product; (2) I, the individual characteristics of the choice maker; and (3) E, characteristics of an external peer group. To provide an empirically feasible method to capture all three sources of information, the authors propose and test an incentive-aligned approach, a "group-sourced mechanism," which mimics a consumer's real-life consultation in the presence of his or her friends when making a purchase decision. The results provide support for the PIE framework, including superior predictive performance in a conjoint task that is "stacked against it." The authors also show how firms can apply the PIE framework for product design. Practitioners, however, must carefully weigh the benefits of the group-sourced preference measurement with the heavier cognitive burden on the respondents in completing the task.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Economics and Econometrics