Campus Units
Economics
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
2010
Journal or Book Title
IEEE Transactions on Engineering Management
Volume
57
Issue
4
First Page or Article ID Number
649
Last Page
660
DOI
10.1109/TEM.2009.2035612
Abstract
Choosing the right set of new products to offer is a key driver of profitability. New products often share some design attributes with existing products, thus, firms need to decide which attributes to keep common and which to differentiate. We propose and empirically implement a new methodology that can help managers to navigate the complex decision of where to focus differentiation, using “looks-like” prototypes that typically become available in the later stages of the product-development process. Our methodology complements early stage product-positioning methods, such as conjoint analysis and perceptual mapping. It also offers a way to estimate the impact of context dependence on choice. Finally, our methodology provides a way to test empirically whether perceptual mapping based on pairwise similarity judgments is appropriate for a product category. Using data obtained from a major wristwatch manufacturer, we are able to suggest guidelines on how to differentiate the firm’s offerings and estimate the magnitude of context dependent effects. We also find that for wristwatches, attributes that drive perceptions differ from those that drive choice. Overall, our approach can help avoid falling into the trap of focusing variety on attributes that are costly to differentiate and have little impact on choice.
Rights
2010 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other users, including reprinting/ republishing this material for advertising or promotional purposes, creating new collective works for resale or redistribution to servers or lists, or reuse of any copyrighted components of this work in other works.
Copyright Owner
IEEE
Copyright Date
2010
Language
en
File Format
application/pdf
Recommended Citation
Ramdas, Kamalini; Zhylyevskyy, Oleksandr; and Moore, William L., "A Methodology to Support Product-Differentiation Decisions" (2010). Economics Publications. 45.
https://lib.dr.iastate.edu/econ_las_pubs/45
Comments
This is a manuscript of an article from IEEE Transactions on Engineering Management 57 (2010): 649, doi:10.1109/TEM.2009.2035612.