Applications of the Stochastic Multicriteria Acceptability Analysis Method for Consumer Preference Study

Applications of the Stochastic Multicriteria Acceptability Analysis Method for Consumer Preference Study

Tadeusz Trzaskalik, Piotr Namieciński, Andrzej Bajdak, Slawomir Jarek
Copyright: © 2017 |Pages: 25
DOI: 10.4018/978-1-5225-0997-4.ch009
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Abstract

Introducing a new product to the market is a complex, costly and time-consuming process which requires research on consumer preferences. On the basis of information on the characteristics of the new product and its competitors, as well as on the competitors and their market shares, the company has to estimate future market shares and to determine the profile of potential consumers inclined to purchase the new product. The purpose of our paper is to present a method of consumer preference research when introducing a new product, using a multiple criteria method called Stochastic Multicriteria Acceptability Analysis (SMAA). To apply this method, no information requiring tedious research is needed. SMAA allows to obtain essential information on the potential market power of the new product already at an early stage of its preparation. Furthermore, the flexibility of the SMAA method allows to easily expand the scope of the analysis by including additional information and various techniques of the modeling of the consumer selection process.
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Background

Consumer Preferences

The notion of preference can be represented as a mathematical relation. It has the following properties:

  • •

    The preference is transitive, that is, given three goods of which the first is better than the second, and the second better than the third, then it follows that the first good is also better than the third one;

  • •

    The preference is reflexive, that is, the same goods are evaluated in the same way;

  • •

    The preference is complete, that is, we can compare any two goods.

Using the preference relation we can compare and rank the goods analyzed. Each good has certain attributes or characteristics which can take on certain values. Further in the paper we will use them as decision criteria.

When constructing a consumer preference model we have to consider the approach to the criteria. Two types of models are distinguished: compensational and non-compensational. In compensational models a decrease of the value of one criterion can be compensated by an increase of the value of another one (Lilien, Kotler & Moorthy, 1992). In non-compensational models it is assumed that a decrease of the value of one criterion cannot be compensated by the values of other criteria. Moreover, criteria have certain threshold values, below which the goods are excluded from further analysis. Both types of models are shown in Figure 1.

Figure 1.

Models of consumer preferences

978-1-5225-0997-4.ch009.f01
Source: Bąk (2004, p. 39) based on Zwerina (1997).

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