Modeling Vehicle Choice and Simulating Market Share with Bayesian Networks
Stefan Conrady, Managing Partner, Bayesia USA
Dr. Lionel Jouffe, CEO, Bayesia S.A.S.
In this tutorial, we present a new method, and the associated workflow, for estimating market shares of future products based exclusively on pre-introduction data, such as syndicated studies conducted prior to product launch. Our approach provides a practical, fast and economical alternative to conducting new primary research.
With Bayesian networks as the framework, and by employing the BayesiaLab and Bayesia Market Simulator software packages, this approach helps market researchers and product planners to reliably perform market share simulations on their desktop computers, which would have been entirely inconceivable in the past.
This innovative approach is explained step-by-step in a study about the introduction of the new Porsche Panamera in the U.S. market. The results confirm that market share simulation with Bayesian networks is feasible even in niche markets that provide relatively few observations.
We believe that making this method and the tools accessible to practitioners is an important contribution to real-world marketing. We are confident that for many companies this approach can yield a step-change in their forecasting ability.
Strategic Vision, Inc. has generously made their 2009 New Vehicle Experience Survey available as a data source for this case study. In this context, special thanks go to Alexander Edwards, President, Automotive Division of Strategic Vision.
Strategic Vision is a research-based consultancy with more than 35 years of experience in understanding the consumers’ and constituents’ decision-making systems for a variety of Fortune 100 clients, 10 Downing Street, Coca-Cola, American Airlines, Proctor & Gamble, the White House and including most automotive manufacturers and many advertising agencies. The company specializes in identifying consumers’ complete, motivational hierarchies, including the product attributes, personal benefits, value/emotions and images that drive perceptions and behaviors. Strategic Vision has at its core a large-scale syndicated automotive experience and “Pulse of the Customer” (POC) study that collects more than 350,000 responses annually, using over 1,500 comprehensive data points Since its foundation in 1972 and incorporation in 1989, Strategic Vision—led by company founders Darrel Edwards, Ph.D., J. Susan Johnson, Sharon Shedroff, with Alexander Edwards—has used in-depth Discovery Interviews and Value Centered Survey instruments that provide comprehensive, integrated and actionable outcomes, linking behavior to attributes to consequences to values and emotions to images (www.strategicvision.com).