Market Segmentation with Choice-Based Conjoint Analysis’, Marketing Letters 6(2

Choice-based conjoint analysis has increased inpopularity inrecent years among marketing practifioners. The typical practice is to estimate choice-based conjoint models at the aggregate level, given insufficient data for individuaMevel estimation fpart-worths. We discuss amethod for market segmentation with choice-based con-joint models. This method etermines the number of market segments, he size of each market segment, and the values of segment-level conjoint part-worths u ing commonly collected conjoint ehoice data. A major advän-tage of the proposed method is that current (incomplete) data collection approaches for choice-based conjoint analysis can still be used for market segmentation without having to collect additional data. We illustrate the proposed method using commercial conjoint choice data gathered ina new concept test for a major consumer packaged goods company. We also compare the proposed method with an a priori segmentation approach based on individual choice frequencies. 1