A Hierarchical Bayesian method for market positioning in environmentally conscious design

Environmentally conscious consumers and environmental protection legislation have been driving manufacturers to design, produce, and dispose products in a more environmentally responsible manner. One of the key issues is how to position environmentally conscious products in the marketplace. Environmentally conscious design eventually needs to make the transition into mainstream design, rather than stay in a high-profile niche application. The assumption that all consumers have the same preferences does not hold in the real marketplace. Heterogeneous customer preferences require analysis of customer choice behavior at the individual level. In addition, individual customer preferences can be clustered into aggregate preferences of different market segments that are latent within the customer base. In this paper, a Hierarchical Bayesian method is presented to integrate individual level preference information, which can be used to help manufacturers measure product attribute weights and identify appropriate market segments in which customers value the environmentally conscious design the most. An automobile design case study is used to demonstrate the proposed approach.