Incorporating Subjective Characteristics in Product Design and Evaluations

Consumers often use objective as well as subjective criteria to evaluate a product. For example, power tool users may evaluate a power tool based on not only its objective attributes such as price and switch type but also its subjective characteristics such as ease of use and the feel of the tool. Our research is distinctive in its emphasis on incorporating subjective characteristics in new product design. We propose a model in which consumer's purchase intention can be impacted by both the objective attributes and the subjective characteristics. This model has the form of a hierarchical Bayesian structural equation model with the subjective characteristics treated as latent constructs. We also propose a Bayesian forecasting procedure in which the estimated relationships are used to improve the out-of-sample prediction. We illustrate our approach in two empirical studies. Our results indicate that, by collecting additional information about consumer's perceptions of the subjective characteristics, our model can provide the product designer with a better understanding and a more accurate prediction of consumer's product preference than the traditional conjoint models