Incorporating Subjective Characteristics in Product Design and Evaluations

Abstract

Consumers often use both objective and subjective criteria to evaluate a product. For example, power tool users may evaluate a power tool on the basis of not only its objective attributes, such as price and switch type, but also its subjective characteristics, such as ease of use and feel of the tool. This research emphasizes incorporating subjective characteristics in new product design. The authors propose a model in which consumers' purchase intentions can be affected by both the objective attributes and the subjective characteristics. This model has the form of a hierarchical Bayesian structural equation model, in which the subjective characteristics are treated as latent constructs. The authors also propose a Bayesian forecasting procedure in which the estimated relationships are used to improve the out-of-sample prediction. They illustrate the proposed approach in two empirical studies. The results indicate that by collecting additional information about consumers' perceptions of the subjective characteristics, the proposed model provides the product designer with a better understanding and a more accurate prediction of consumers' product preferences than the traditional conjoint models.