analysis with marketing concept

situation: hotel room select

choice based model (vs rating based model)

why Choice based model(CBM)?

• Many events we want to understand and predict are choices

• Asking direct questions about product preferences(Rating based) often leads to unenlightened answers.

• CBM assumes that customers are not able to express how they weigh separate product attributes.

• CBM assumes customers are affected not only by the focal product’s attributes, but also by the competitors’

By this analysis, we can compute utility(part-worth), willingness to pay, market share

Designing new products: Understand how product features relate to what people will buy (understanding the part-worth)

Pricing: Calculating the willingness-to-pay (WTP).

Determine how price is related to market share.