Academic journal article
By Lowengart, Oded
Journal of Business and Management , Vol. 16, No. 1
In this paper we propose a multiattribute choice modeling approach to explore the heterogeneity in the saliency of product attributes in the process of a product choice that is based on sensory evaluations. We demonstrate this idea by using data about consumers' red wine evaluation. Such an approach enables managers to add knowledge about consumers' needs and wants beyond traditional art and the experience of wine makers into the process of designing a product. We utilized a choice model that enables us to identify such attributes and, simultaneously, to estimate the choice probabilities for each different wine. Our results, based on four different red wines, indicate that based on their sensory evaluation, consumers tend to utilize several wine attributes in their choice process. The saliency of these attributes varies in different consumer segments such as gender and frequency of wine drinking.
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Choosing among products characterized by many different types of attributes is difficult for consumers, as it requires a considerable cognitive effort. This is particularly true when the product category offers many different alternatives with various tastes. In such cases, consumers can rely on extrinsic (i.e., signals of quality such as brand name or package) or intrinsic (i.e., taste of the product) product characteristics to choose among alternative products. The latter might be more reliable than the former, as consumers can develop their own direct evaluation criteria (their own taste) and test that product. Wines, for example, provide consumers with a wide variety of products with different tastes, qualities, prices, and other related attributes. Choosing a specific wine, therefore, is a complex task for consumers. Furthermore, verifying the qualities of such products is usually possible only after actually using the product. Moreover, due to the wide selection of possible alternative products, consumers cannot be sure they made the right decision even after consuming the product. This makes wine a typical credence product - products that are difficult to evaluate before as well as after consumption (Darby & Kami, 1973), as opposed to search products (that can be evaluated prior to consumption) and experience products (that can be evaluated after consumption) (Nelson, 1974). It is logical to expect that consumers cannot solely rely on their own taste test for wine choice, since, in many purchasing situations, this option is not easily available. As a result, other methods of reducing uncertainty can be used by consumers. For example, Lynch and Ariely (2000) found that electronic shopping can reduce search costs and price sensitivity, while maximizing the transparency of quality information specifically for a differentiated product such as wine. Nevertheless, a taste test is still the more reliable selection criteria for choosing such products when possible.
Consumers can use their own sensory evaluation to verify product qualities, when possible. Shepherd and Towler (1992), for example, argue that experience (and valuation) of consumers with food products is shaped by sensory attributes and particularly, by taste. Koivisto and Sjóden (1996) argue that taste is a good explanatory variable for food choices. As in many aspects of consumer products, there is heterogeneity among consumers when it comes to the exact combination of marketing mix variables that fit their needs. Heterogeneity stemming from personal differences (e.g., gender) geographical, behavioral (e.g., experience with the product) and other sources can have an effect on the desired product characteristics and preferences for it. For example, Scarpa, Philippidis and Spalatro (2005) found a variation in choice that is associated with socioeconomic variables in several food products. Hu et al. (2004) found gender differences in a latent class model analysis of choice of genetically modified ingrethents of food products. …