Engineering Product Design Optimization for Retail Channel Acceptance

2008 ◽  
Vol 130 (6) ◽  
Author(s):  
N. Williams ◽  
S. Azarm ◽  
P. K. Kannan
Keyword(s):  
Product Design ◽  
Latent Class ◽  
Consumer Preferences ◽  
Marketing Channels ◽  
Engineering Product ◽  
Design Decisions ◽  
Trade Offs ◽  
Slotting Allowances ◽  
Engineering Designs ◽  
Design Selection

Significant recent research has focused on the marriage of consumer preferences and engineering design in order to improve profitability. The extant literature has neglected the effects of marketing channels, which are becoming increasingly important. At the crux of the issue is the fact that channel dominating retailers, like Wal-Mart, have the ability to unilaterally control manufacturer’s design decisions as gatekeepers to the consumers or market. In this paper, we propose a new methodology that accounts for this power asymmetry. A chance constrained optimization framework is used to model retailer acceptance of possible engineering designs and accounts for the important effect on the profitability of the retailer’s assortment through a latent class estimation of demand from conjoint surveys. Our approach allows the manufacturer to optimize a product design for its own profitability while reliably ensuring that the product will make it to market by making the retailer more profitable with the addition of the new product to the assortment. As a demonstrative example, we apply the proposed approach for product design selection in the case of an angle grinder. For this example, we analyze the market and are able to improve expected manufacturer profitability while simultaneously presenting the designer with trade-offs between slotting allowances, market share, and risk of retailer acceptance.

Engineering Product Design Optimization for Retail Channel Acceptance

2006 ◽  
Author(s):  
N. Williams ◽  
S. Azarm ◽  
P. K. Kannan
Keyword(s):  
Product Design ◽  
Engineering Design ◽  
Latent Class ◽  
Consumer Preferences ◽  
New Product ◽  
Engineering Product ◽  
Retail Channel ◽  
Slotting Allowances ◽  
Engineering Designs ◽  
Design Selection

Significant recent research has focused on the marriage of consumer preferences and engineering design in order to improve profitability. The extant literature has neglected the effects of channel markets which are increasingly prevalent. At the crux of the issue is the fact that channel dominating retailers, like Wal-Mart, have the ability to unilaterally control manufacturer production decisions as gatekeepers to the consumer or market. In this paper, we propose a new methodology that accounts for this power asymmetry. A chance constrained framework is used to model retailer acceptance of possible engineering designs and accounts for the important effect on the profitability of the retailer’s assortment through a latent class estimation of demand from conjoint surveys. Our approach allows the manufacturer to optimize a product design for profitability while reliably ensuring that the product will make it to market by making the retailer more profitable with the addition of the new product. As a demonstrative example, we apply the proposed approach for product design selection in the case of an angle grinder. For this example, we analyze the market and are able to improve expected manufacturer profitability while simultaneously presenting the decision maker with tradeoffs between slotting allowances, market share, and risk of retailer acceptance.

scholarly journals Clean Label Trade-Offs: A Case Study of Plain Yogurt

2021 ◽  
Vol 8 ◽  
Author(s):  
Sara Maruyama ◽  
Juyun Lim ◽  
Nadia A. Streletskaya
Keyword(s):  
Willingness To Pay ◽  
Consumer Choice ◽  
Food Industry ◽  
Latent Class ◽  
Corn Starch ◽  
Consumer Preferences ◽  
Negative Impact ◽  
Mixed Logit ◽  
Logit Analysis ◽  
Trade Offs

Consumer demand for clean label has risen in recent years. However, clean label foods with simple and minimalistic ingredient lists are often expensive to produce and/or may possess less desirable sensory qualities. Accordingly, understanding consumer preferences regarding the clean label trend would be of great interest to the food industry. Here we investigate how ingredient lists and associated sensory quality descriptions may influence consumer preferences using a hypothetical choice experiment. In particular, we test the impacts of four common stabilizers (carrageenan, corn starch, milk protein concentrate, and pectin) and textural characteristics on preferences and willingness to pay for plain yogurt. A total of 250 yogurt consumers participated in the study. The results of a mixed logit analysis suggest that clean labeling significantly increases the likelihood of consumer choice, while poor texture reduces consumer choice. More importantly, the negative impact of poor texture seems to be less significant for clean label yogurts compared to that for yogurts with longer ingredient lists. Among all stabilizers, corn starch in particular has a significant negative impact on consumer choice. The estimated average consumer willingness to pay for clean labels is between $2.54 and $3.53 for 32 oz yogurt formulations. Furthermore, clean labels minimize the negative impact of textural defects with consumers willing to pay an estimated premium of $1.61 for the family size yogurt with a simple ingredient list. Results of latent class modeling reveal two classes of consumers with similar patterns of demand who prefer clean labels and, on average, would rather purchase a yogurt with a textural defect than opt out of purchasing a yogurt entirely. Implications for the food industry are discussed.

Product Design Selection With Preference and Attribute Variability for an Implicit Value Function

2005 ◽  
Vol 128 (5) ◽  
pp. 1027-1037 ◽  
Author(s):  
A. K. Maddulapalli ◽  
S. Azarm
Keyword(s):  
Product Design ◽  
Value Function ◽  
Selection Process ◽  
Optimal Designs ◽  
Engineering Product ◽  
Marginal Rate ◽  
Marginal Rate Of Substitution ◽  
Design Alternatives ◽  
Attribute Levels ◽  
Design Selection

An important aspect of engineering product design selection is the inevitable presence of variability in the selection process. There are mainly two types of variability: variability in the preferences of the decision maker (DM) and variability in attribute levels of the design alternatives. We address both kinds of variability in this paper. We first present a method for selection with preference variability alone. Our method is interactive and iterative and assumes only that the preferences of the DM reflect an implicit value function that is differentiable, quasi-concave and non-decreasing with respect to attributes. The DM states his/her preferences with a range (due to the variability) for marginal rate of substitution (MRS) between attributes at a series of trial designs. The method uses the range of MRS preferences to eliminate “dominated designs” and then to find a set of “potentially optimal designs.” We present a payload design selection example to demonstrate and verify our method. Finally, we extend our method for selection with preference variability to the case where the attribute levels of design alternatives also have variability. We assume that the variability in attribute levels can be quantified with a range of attribute levels.

scholarly journals No Palm Oil or Certified Sustainable Palm Oil? Heterogeneous Consumer Preferences and the Role of Information

2020 ◽  
Vol 12 (18) ◽  
pp. 7257
Author(s):  
Cordula Hinkes ◽  
Inken Christoph-Schulz
Keyword(s):  
Palm Oil ◽  
Latent Class ◽  
Consumer Preferences ◽  
Free Products ◽  
Information Campaigns ◽  
Additional Information ◽  
Trade Offs ◽  
Production And Consumption ◽  
Research Gap

Public concerns about the adverse effects of palm oil production and consumption have contributed both to the development of certification standards for sustainable palm oil and to the promotion of palm-oil-free products. While research on consumer preferences for palm oil is growing, potential trade-offs between these two options—products containing certified palm oil versus palm-oil-free products—are still largely unexplored. Focusing on this research gap, a discrete choice experiment involving chocolate cookies was implemented as part of a web survey among consumers in Germany. Results indicate that consumers on average prefer palm-oil-free cookies, although a latent class analysis identifies several consumer segments that differ in terms of preferences, attitudes, and characteristics. Many respondents are highly price-sensitive. After the provision of additional information, stated preferences for certified palm oil increase, but four out of five consumer segments still prefer palm-oil-free products. Prevailing health concerns and a potential lack of trust in certification might explain this choice behavior. As alternatives to palm oil are not necessarily more sustainable, initiatives supporting the uptake of certified sustainable palm oil should be further strengthened. Targeted information campaigns might be a suitable instrument to raise awareness and increase knowledge about palm oil.

A Web-Based Process for Creating Parametric Cost Models for Product Design Trade Studies

2004 ◽  
Author(s):  
Alexandre E. Gue´rinot ◽  
Gregory M. Roach ◽  
Jordan J. Cox
Keyword(s):  
Product Design ◽  
Cost Estimation ◽  
Cost Model ◽  
Production Costs ◽  
Preliminary Design ◽  
Cost Models ◽  
Design Decisions ◽  
Web Based ◽  
Trade Offs ◽  
The Cost

This paper proposes a method for creating a parametric cost model established on the foundation of the product design generator methodology to provide early estimates of production cost and manufacturing cycle-time during preliminary design. This is accomplished by capturing the manufacturing process and knowledge associated with the product and its production. The relationships between design decisions and manufacturing costs are explicitly exposed making the cost estimation process reusable and repeatable. Designers can now clearly assess the profitability of their design, identify appropriate trade-offs between engineering requirements and production costs, and alter the design accordingly.

scholarly journals Consumer Preferences for Private Label Brand vs. National Brand Organic Juice and Eggs: A Latent Class Approach

2021 ◽  
Vol 13 (13) ◽  
pp. 7028
Author(s):  
Ellen J. Van Loo ◽  
Fien Minnens ◽  
Wim Verbeke
Keyword(s):  
Orange Juice ◽  
Latent Class ◽  
Consumer Preferences ◽  
Latent Class Model ◽  
Organic Food ◽  
Food Products ◽  
Organic Production ◽  
Private Label ◽  
National Brand ◽  
Major Barrier

Many retailers have expanded and diversified their private label food product assortment by offering premium-quality private label food products such as organic products. With price being identified as the major barrier for organic food purchases, private label organic food products could be a suitable and more affordable alternative for many consumers. While numerous studies have examined consumer preferences for organic food, very few organic food studies have incorporated the concept of private labels. This study addresses this research gap by studying consumer preferences and willingness to pay for national brand and private label organic food using a latent class model. Specifically, this study analyzes consumer preferences for organic eggs and orange juice and the effect of national branding versus private label. Findings show heterogeneity in consumer preferences for production method and brand, with three consumer segments being identified based on their preferences for both juice and eggs. For eggs, about half of the consumers prefer private label and organic production, whereas one-quarter clearly prefers organic, and another quarter is indifferent about the brand and the organic production. For orange juice, the majority (75%) prefer the national brand. In addition, one-quarter of the consumers prefers organic juice, and about one-third values both organic and the national brand.

Design of Complex Engineering Systems Using Multiagent Coordination

2016 ◽  
Author(s):  
Nicolás F. Soria ◽  
Mitchell K. Colby ◽  
Irem Y. Tumer ◽  
Christopher Hoyle ◽  
Kagan Tumer
Keyword(s):  
Autonomous Agents ◽  
Engineering Systems ◽  
Coordination Problem ◽  
Design Decisions ◽  
Multiagent Coordination ◽  
Trade Offs ◽  
Potential System ◽  
Complex Engineering ◽  
System States ◽  
Complex Engineering Systems

In complex engineering systems, complexity may arise by design, or as a by-product of the system’s operation. In either case, the root cause of complexity is the same: the unpredictable manner in which interactions among components modify system behavior. Traditionally, two different approaches are used to handle such complexity: (i) a centralized design approach where the impacts of all potential system states and behaviors resulting from design decisions must be accurately modeled; and (ii) an approach based on externally legislating design decisions, which avoid such difficulties, but at the cost of expensive external mechanisms to determine trade-offs among competing design decisions. Our approach is a hybrid of the two approaches, providing a method in which decisions can be reconciled without the need for either detailed interaction models or external mechanisms. A key insight of this approach is that complex system design, undertaken with respect to a variety of design objectives, is fundamentally similar to the multiagent coordination problem, where component decisions and their interactions lead to global behavior. The design of a race car is used as the case study. The results of this paper demonstrate that a team of autonomous agents using a cooperative coevolutionary algorithm can effectively design a Formula racing vehicle.

scholarly journals Understanding preferences of German flower consumers: the desire for sustained beauty

2018 ◽  
Vol 46 (6) ◽  
pp. 560-576
Author(s):  
Meike Rombach ◽  
Nicole Widmar ◽  
Elizabeth Byrd ◽  
Vera Bitsch
Keyword(s):  
Latent Class Analysis ◽  
Latent Class ◽  
Consumer Preferences ◽  
Federal State ◽  
Class Analysis ◽  
Cut Flower ◽  
Cut Flowers ◽  
Content Type ◽  
Relative Preference ◽  
Best Worst Scaling

PurposeThe purpose of this paper is to provide insights for flower retailers, horticultural practitioners and marketing managers into the prioritisation of cut flower attributes by German residents.Design/methodology/approachApplying a best–worst scaling approach, this analysis identified the relative ranking of importance amongst product attributes relevant to German consumers when buying fresh cut flowers. A latent class analysis determined four flower consumer segments for further study. The study builds on a sample of 978 consumers and is consistent with the most recent German census in terms of age, gender, income and federal state.FindingsThe best-worst analysis showed that intrinsic flower attributes, in particular appearance, freshness and scent were found to be more important to German consumers than the extrinsic attributes studied, namely, price, country of origin and a certification indicating fair trade. The latent class analysis determined four consumer segments that desire either budget, luxury or ethical flowers or more information about flowers. For all identified consumer segments, appearance was the attribute of greatest importance. The segments that desired luxury or ethical flowers, as well as the segment that desires more information were interested in appearance, but also had relatively large shares of preferences dedicated to flower freshness guarantees. The preference for freshness guarantees in addition to appearance may be interpreted jointly as a desire for not only beautiful and aesthetically pleasing flowers, but for sustained beauty.Originality/valueInternationally, the study fills a research gap by exploring consumer’s relative preference for cut flower attributes. In contrast to existing studies on consumer preferences for flowers in Germany, the present study builds on a sample that was targeted in terms of age, gender, net household income and federal state to the most recent German census.

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