Choice Modelling: A Tool For Analyzing Individuals or Segments For Marketing Purposes

What is choice modelling tool?

Choice modelling tools refers to the process of decision making process of  a segment or of an individuals through related preferences or stated preferences made in a specific  contexts. Generally, it is used to discrete the choices in between multiple choices available so that one can choose the most inferior option for a particular contexts. Choice modelling from the outset suffered from a lack of standardisation of terminology and all the terms given above have been used to describe it. However, the largest disagreement has proved to be geographical: in the Americas, following industry practice there, the term "choice-based conjoint analysis" has come to dominate. Although the concept choice models is widely understood and practiced these days, it is often difficult to acquire hands-on knowledge in the choice modelling tool. Moreover, the decision maker must has to find out the choice of the consumers or customers during the application of the choice model in the business process. For example it can be said that suppose a student is trying to decide which pub he/she should go for a beer after his/her last final exam. Suppose there are two pubs in the town of the college: an Irish pub and an American pub. The researcher wishes to predict which pub he/she will choose based on the price (P) of beer and the distance (D) to each pub, assuming they are known to the researcher.

How choice modelling helpful for market research?

In case of the business process, it us very useful to use the choice modelling process as it is very crucial for the business process. There are many reasons through which the choice modelling process can help the business programs of an organization or a business company.  A choice modelling generally helps the marketers to identify the stakeholders of the markets. In case of the marketing research it is very crucial to identify the target market of a particular service or a particular product as it helps the company or organization to take part in the revenue generation process in a well manner. It is quite evident, all kind of product or services are not designed for every consumers. Hence, to know the market segmentation is very crucial to run the business in a good way. By using this choice modelling tools in the market research process, the marketers can identify the target customers for their product or services. It may possible that, there are more than one target customer group for a particular product or services. Hence using of choice modelling tool in the business process will help the business persons to identify the actual option for the target market for that particular product. Moreover, by using this model in the market research process, the business company also can identify the exact target market location for a particular product as it is directly associated with the revenue generation of a particular company.  Hence, it can be said that, it is very crucial to use the choice modelling tools in the business process.

Advantages of choice modelling tool for marketing?

There are various advantages of using the choice modelling process in the business process of modern days. Business Process Modelling is a combination of various process related steps such as Process Mapping, Process Discovery, Process Simulation, Process Analysis and Process Improvement. Although a holistic business process modelling exercise would cover all these steps in some depth, analysts have found that even a partial modelling exercise that involves a subset of these steps is a good start and yields significant benefits.  The choice modelling method in the business will help to link organizational strategy to well-defined business processes - Business process modeling is a critical tool for management and executives to ensure that the business processes are consistent with and enable execution towards achieving the overall strategy of the organization. It will also help in enabling to change and interconnect procedures rapidly to take benefit of new business chances or address business challenges. Another important advantage of using this model is that, this model also help in the improvement of the communication process in the business. By using this model in the business the business personnel can minimize the potential risk of losing staffs causing in loss of business process information. It also helps business managers communicate their ideas quickly and clearly.  In today's business environment, every business and every manager wants to ensure that they are achieving the best possible results with the resources available to them. There is no room for inefficiencies and wastage.  Moreover, this model also enhances productivity of existing resources and staff and so allows the team to do more with less.

How choice modelling tool effective for evaluation?

In order to evaluate the current market condition for a particular business, the identification of the competitive nature of the market is very crucial. From various resources, it is reported tha the use of this model in the business will help to earn competitive advantages over other companies present in the market. Hence, this model passively help the companies to enhance the revenue of the companies as a part of the business process as well. A slight improvement in the business processes will help the  organization to identify any kind of flaws in the organization and thus it will help in the process of improvement in other processes as well as a slight improvement in a single process will thereby cause improvement in other process as well.  Apart from that, the use of  this model in the business process will help to reduce  the processing time of a particular process in the business. Moreover, the use of this model in the business will allow allows analysis and understanding of the process flows and helps managers know if there is room for further optimization and efficiencies. Along with this, the use of this business processing model in the evaluation of a business process will also help to align its operation and strategy of the business organization.