Benefit Formation and Enhancement

Distinguishing attributes from benefits is a challenging yet important task for product development. Attributes represent the physical and psychological inputs that comprise a product from which consumers seek benefits. Some attributes are benefit enabling in the sense that their presence signals that an offering is responsive to a benefit being sought, while their absence indicates that the product does not provide the benefit. Not all brands, for example, are seen as luxurious and specific brand names may be needed for consumers to consider an offering as providing luxury. Benefit formation hinges on these types of attributes being present, while other attributes only enhance a benefit that has already been formed. We develop a model to identify attributes that are critical to a benefit formation and apply it to three conjoint datasets. We show that identifying product features needed for benefit formation is important to product development activities.

Keywords: Latent Utility, Product Design, Characteristic Interactions

Suggested Citation: Suggested Citation

Kim, Hyowon and Kim, Dong Soo and Allenby, Greg M., Benefit Formation and Enhancement (September 26, 2018). Available at SSRN: https://ssrn.com/abstract=3256996 or http://dx.doi.org/10.2139/ssrn.3256996