Paper on optimal product line design co-authored by Feray Adigüzel
In the March 2011 issue of the International Journal of Research in Marketing features as a leading article a paper co-authored by Feray Adigüzel.
04/21/2011 | 1:45 PM
What customers want the most and what engineers can produce based on these preferences do not fit most of the time. Sometimes technical constraints of product attributes prevent manufacturers to produce what consumers want. Then the question is how to design product line products by taking into consideration of consumers preferences and engineering constraints, and produce the optimal product line. While tackling this issue, heterogeneity in consumer preferences should be also considered, because every consumer is unique. These issues are solved in this research by proposing a unified methodology for product line optimization by merging marketing-based preference heterogeneity and engineering-based constraints with which product attributes can be realized. Consumer preferences are collected through a conjoint experiment and measured with three different heterogeneous preference models and compared. Consumer demand and engineering constraints are combined with a powerful optimization tool called “analytical target cascading (ATC)”. The results indicated that the optimal number of products in the line is not necessarily equal to the number of market segments, and the representation of consumer heterogeneity has a substantial impact on the design and profitability of the resulting optimal product line.
Michalek, Jeremy J., Petter Ebbes, Feray Adigüzel, Fred M. Feinberg, and Panos Y. Papalambros (2011), “Enhancing Marketing with Engineering: Optimal Product Line Design for Heterogeneous Markets”, International Journal of Research in Marketing, 28 (1), 1-12, available at: http://webuser.bus.umich.edu/feinf/research.