Impact of sales promotion efforts on customer's choice

Abstract

Nowadays, customer’s decision-making is one of the most important topics in a rapidly changing business environment. Product valuation is the core determinant of the customer choice. Every product can be described as a particular set of components or attributes. There is a widely accepted opinion about valuation of product utility by a customer as valuation of a set of benefits brought by every single product attribute. In other words, customer’s decision-making is based on conjoint analysis of different attributes of a product rather than analysis of every single attribute separately. Actually, while evaluating a product, a customer does not pay the same attention at all product attributes. People tend to differentiate the attributes which are really important and form their attitude towards a product on the basis of these attributes. In that case, the marketers’ task is to determine the proper attributes and compose an optimal set of these attributes for the customer. Conjoint analysis helps marketers find out product attributes which are more or less important for a customer. The aim of the conjoint analysis is to predict customer purchasing patterns. The analysis also enables marketers to define customer’s wishes and preferences. The outcome of the conjoint analysis encompasses estimation of the input of every single attribute and its levels into a joint product’s utility as well as calculation of the relative importance of product attributes.[...]