Content Type:

Glossary

Discrete Choice Modeling Definition

A research technique that reveals the relationship between the probability of choosing an alternative and the attributes or benefits that characterize that alternative. It provides estimates of the utility or value that customers place on different features or benefits of a product.

Discrete choice modeling analyzes and predicts consumer choices among a set of discrete alternatives, thus estimating the value that customers place on various features or benefits of a product. In providing a structured framework for simulating real-world decision scenarios that consumers face, this market research method reveals the relationship between the probability of customers choosing an alternative and the attributes or benefits that characterize that alternative. This approach considers factors like price, features and brand reputation that influence consumer choices. By quantifying these influences, businesses can make informed decisions about pricing strategies, product design and marketing efforts.

Who relies on discrete choice modeling?

Marketing professionals, product managers and researchers across various industries rely on discrete choice modeling for insights into consumer preferences and behavior. What's more, manufacturers and personnel in the healthcare and transportation industries use this technique to optimize products or services, design marketing strategies and make decisions about product development and pricing.

Why should I care about discrete choice modeling?

Discrete choice modeling illustrates how consumers evaluate product or service options and make buying choices, which is key in developing and enhancing products, services and marketing campaigns to better meet consumer preferences.