Stage 3: Evaluating product design options
Step 3.1: Segment customers based on their part-worth functions. At this stage we can segment the market by grouping customers who have similar part-worth functions. In the frozen pizza example we might find a segment of customers who prefer thin crust pizza and another segment of customers who prefer pan pizza, with preferences on other attributes being roughly similar for the two segments. Furthermore, we may find that these two segments differ systematically in terms of their demographic characteristics (e.g., age) and media habits (e.g., watching MTV). A simple way to identify such segments is through traditional cluster analysis. There are also more sophisticated models, which we discuss in the next section.