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Value Estimation and Market Modeling

(Other Class Offerings)

This one day course is designed for those who have some experience in pricing analysis who would like to know more about the techniques used to estimate customer value and demand. It provides an overview of the primary techniques used to estimate what a customer is (or should be) willing to pay for a product and/or service offering and how to translate those estimates in combination with other factors into useful predictions of demand with varying prices. Value estimation techniques covered include monetary value to the customer analysis, tradeoff analysis, and statistical estimation based on revealed preference. The second part of the course reviews issues associated with translating a measure of willingness to pay from the value analysis into reliable estimates of unit sales at different prices. Some of the limitations of traditional modeling approaches will be reviewed along with approaches to dealing with them. The goal is for participants to be able to design market research studies that will improve pricing decisions and more effectively evaluate and utilize market research studies designed to estimate preference, choice and demand.


  • Segmenting the market
    • The importance of segmentation
    • Approaches to segmentation
  • Estimating customer value
    • Monetary (economic) value analysis
    • Self-explicated preferences
    • Trade-off (conjoint analysis) approaches
    • Statistical estimation based on purchase history
  • Modeling individual choice and demand
    • Discrete choice (e.g. logit) models
    • Challenges posed by sequential (nested) choices
    • Accounting for individual differences in perceptions and choice sets
    • Accounting for marketing variables
    • Accounting for psychological factors
  • Modeling aggregate demand
    • Aggregating over individual demand predictions
    • Estimation based on aggregate data
  • Using market demand models to make pricing and product design decisions

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