Consideration behavior and design decision making

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Long, Minhua
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William R. Morrow Baskar Ganapathysubramanian
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Mechanical Engineering

Over the past decade, design engineering has developed a systematic framework to coordinate with consumer behavior models. Traditional consumer models applied in the past has mainly focused on the preference of compensatory trade-offs in the choice decisions. Recent marketing research has become interested in developing consumer models that are "representative" in that they reflect realistic human decision processes. One important example is "consideration": the process of quickly screening out many available alternatives using non-compensatory rules before trading off the value of different feature combinations. Is capturing consideration important for design? This research investigates the impact of modeling consideration behavior to design engineering, aiming at constructing consideration models that can inform strategic decisions. The study includes several features absent in existing research: quantifying the mis-specifications of the underlying choice process, tailoring survey instruments for particular models, and exploring the models' strategic value on product profitability and design feature differences.

First, numerical methods are explored to address the discontinuity in the profit-oriented optimization problem introduced by the consideration models. Methods based on complementarity constraints, smoothing functions and genetic algorithms are implemented and evaluated with a vehicle design case study. Second, a simulation experiment based on synthetic market data compares consideration models and a variety of conventional choice models in the process of model estimation and design optimization. The simulation finds that even when estimated compensatory models provide relatively good predictive accuracy, they can lead to sub-optimal design decisions when the population uses consideration behavior; convergence of compensatory models to non-compensatory behavior is likely to require unrealistic amounts of data; modeling heterogeneity in non-compensatory screening is more valuable than heterogeneity in compensatory trade-offs. The synthetic experiment framework then further extends the comparison to include the survey design process guided by the different assumptions behind considerations and traditional models. A product line design case study reveals that even though both compensatory models and consideration models show robustness in profitability, using consideration models leads to optimal portfolios with higher feature diversity while reducing the risk of overestimating profits. Finally, the research explores how to use consideration models to analyze the market penetration of newly designed product in a case study of a consideration maximization problem.

It is the hope that this research will arouse the attention of designers to the informative power of consideration models, expand the understanding of consumer behavior modeling from the predictive power in the marketing field to the strategic impacts to design decisions, and provide technical support to the future application of consideration models in design engineering.

Fri Jan 01 00:00:00 UTC 2016