Optional Choice Modelling

Marketeers and product planners in service-focused industries, such as telecom, insurance or car industries are facing challenges when optimising their product offers. It is never completely clear what the added value of a service will be to buyers, and what the willingness to pay would be. Without this information, companies run a high risk of failure.

The complexity of these markets is caused by the fact that poducts and services may have optional elements, such as add-on services or bundles (telecom) or optional features (cars and insurance packages).

In traditional choice modelling techniques, a respondent chooses for a complete product. In reality, the consumer can choose a basic product and many add-on elements, such as additional SMS bundles, accessories, and etcetera. So far, it has never been possible to measure the potential uptake of these add-on elements in a conjoint study.

However, SKIM has found a way to conduct optional choice-modelling for companies in these markets. This breakthrough innovation enables us to model markets in which there are products or services that can be chosen in addition to a standard product. It can also deal with markets in which products can be composed by the consumer him/herself.

In contrast to traditional conjoint analysis, this method not only allows for estimating the value of offering the packages (which is what usual conjoint does), but it will also estimate whether or not consumers are going to choose them. This will provide more accurate estimations of price sensitivities and uptake of these products and services.

Choice model, specifically developed by SKIM's research consultants for telecom providers, insurance and banking companies, automotive companies. (Is not available as a software tool)

Very suitable for: bundling, product optimisation, pricing.