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Usefulness of the discrete choice methodology for marketing decision-making in new product development: an example from the European functional foods market

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  • Athanasios Krystallis

    (Department of Marketing and Statistics, Aarhus School of Business, Aarhus University, Haslegaardsvej 10, DK-8210, Aarhus V, Denmark)

  • Michalis Linardakis

    (Department of Agricultural Economics and Development, Agricultural University of Athens, Greece)

  • Spyridon Mamalis

    (Department of Economics, Division of Business Administration, Technological Educational Institution of Kavala, Greece)

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    Abstract

    Understanding consumer needs should be a high-priority strategic objective in new product development (NPD). Despite their importance, however, NPD processes do not take full advantage of the consumer survey methodologies available. The authors investigate+ parents” preferences for three new functional children's snacks marketed in Greece. Using a very simple discrete choice experimental design, the authors aim (a) to provide an example of consumer research implementation in food-related NPD and to assess its marketing value, and (b) to evaluate the quality of the acquired consumer-related information for marketing decision-making in food consumer-led NPD processes against a number of criteria set in the relevant literature. “Functionality” is found to be a statistically significant attribute for all three children's snacks of the research design compared to other attributes such as flavor and price. Parents seem to perceive the functional snack alternative as offering greater utility as compared to its conventional (i.e., nonfunctional) counterpart. Overall, the authors conclude that, despite some inherent weaknesses, the advantage of the discrete choice methodology in connection with consumer-led food NPD lies in its ability to describe current consumer needs and desires realistically and to contribute to the optimization of existing products. [EconLit Classification: M310, C920, C930, D100]. © 2010 Wiley Periodicals, Inc.

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    File URL: http://hdl.handle.net/10.1002/agr.20236
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

    Volume (Year): 26 (2010)
    Issue (Month): 1 ()
    Pages: 100-121

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    Handle: RePEc:wly:agribz:v:26:y:2010:i:1:p:100-121

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    Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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    1. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, October.
    2. E. William Nganje & Simeon Kaitibie & Thomas Taban, 2005. "Multinomial logit models comparing consumers' and producers' risk perception of specialty meat," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 375-390.
    3. McIntosh, E. & Ryan, M., 2002. "Using discrete choice experiments to derive welfare estimates for the provision of elective surgery: Implications of discontinuous preferences," Journal of Economic Psychology, Elsevier, vol. 23(3), pages 367-382, June.
    4. Hall, Jane & Viney, Rosalie & Haas, Marion & Louviere, Jordan, 2004. "Using stated preference discrete choice modeling to evaluate health care programs," Journal of Business Research, Elsevier, vol. 57(9), pages 1026-1032, September.
    5. Scott, Anthony, 2002. "Identifying and analysing dominant preferences in discrete choice experiments: An application in health care," Journal of Economic Psychology, Elsevier, vol. 23(3), pages 383-398, June.
    6. Storey, Chris & Easingwood, Christopher J., 1999. "Types of New Product Performance: Evidence from the Consumer Financial Services Sector," Journal of Business Research, Elsevier, vol. 46(2), pages 193-203, October.
    7. Allenby, Greg M. & Rossi, Peter E., 1998. "Marketing models of consumer heterogeneity," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 57-78, November.
    8. Hensher, David A. & Stopher, Peter R. & Louviere, Jordan J., 2001. "An exploratory analysis of the effect of numbers of choice sets in designed choice experiments: an airline choice application," Journal of Air Transport Management, Elsevier, vol. 7(6), pages 373-379.
    9. Riccardo Scarpa & George Philippidis & Fiorenza Spalatro, 2005. "Product-country images and preference heterogeneity for Mediterranean food products: A discrete choice framework," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 329-349.
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