Abstract
By studying how customers react to paired sets of product and service attributes, a manager can focus on factors that determine purchases. The procedure, known as "discrete-choice analysis" (DCA), begins with an assessment of which attributes are important to customers. Then the researcher establishes different levels for each attribute (e.g., price points, service speed). The customers' indicated preferences among several of such paired sets give managers information that allows them to adjust product and service attributes for maximum customer satisfaction and, not incidentally, better market share. The authors demonstrate how DCA works through a study of how customers chose a pizza-delivery company by trading off among several attributes (price, discount, promised delivery time, late-delivery time, variety, temperature, and money-back guarantee). The results of such a discrete-choice analysis can be incorporated into a decision-support system via a computer spreadsheet.
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