Online Music Consumption in Today’s Technological Context: Putting the Influence of Ethics in Perspective

Whereas in the past ‘free’ and ‘illegal’ were nearly synonymous in the music industry, consumers nowadays face a myriad of music platforms with widely different characteristics in terms of business model (advertising supported, fee based, etc.), delivery mode (streaming, downloading, etc.), and others. The current research examines music consumption preferences in this new context. In order to break with the outmoded free-illegal versus paid-legal dichotomy, the present research studies consumer preferences for a broader range of music platform attributes, including free versus paying business models, (il)legality of use, artist revenues, downloading versus streaming, and audio quality. Based on a literature review and a qualitative study with in-depth interviews (N = 92), an online conjoint survey (N = 764) quantifies online music preferences. Results show that consumers of all ages clearly and consistently prefer legal and ethical options if available, but favor different ways of making this economically viable. Youngsters and young adults are more open to advertising, while middle-aged adults are more often willing to pay for advertising-free platforms. Thus, in real-life choices, youngsters may appear to be less ethical and law abiding, but the driving force behind this is mainly economical. Finally, a market segmentation provides deeper insights into online music consumer preferences and leads to recommendations on how to define viable legal and ethical music offerings.     

Better preference prediction with individualized sets of relevant attributes

Conjoint studies are aimed at analysing individual preferences based on product profiles. The findings are used either for exploratory or for predictive purposes.One basic paradigm states that the analysis should have an individual orientation. Therefore, the part-worth utilities are estimated on an individual level. The set of relevant attributes, however, is usually supposed to be unique for all respondents. In contrast to this traditional approach, which is only partially individualized, we developed a completely individualized conjoint approach based upon an EDP-assisted information handling system. In addition, we have tested the quality of this completely individualized analysis against the partially individualized analysis.In regard to predictive validity, the completely individualized analyses were, as far as the correct first choice probability criterion is concerned, significantly better than the partially individualized analyses. Thus, we conclude that for commercial analyses conjoint analyses should be based on the individualized conjoint approach.     

Understanding today’s music acquisition mix: a latent class analysis of consumers’ combined use of music platforms

In response to diversifying music delivery modes, consumers increasingly combine various music platforms, both online and offline, legal and illegal, and free or paying. Based on survey data (N?=?685), the current study segments consumers in terms of the combination of music delivery modes they use. We identify four latent classes based on their usage frequency of purchasing CDs, copying CDs, streaming music, streaming music videos, peer-to-peer file sharing, and purchased downloading. All-round users (9.9 %) use most or all acquisition modes, but at a low frequency. Traditionalist (33.7 %) typically makes no use of any of the acquisition modes except buying CDs. Streamers-downloaders (20.7 %) use several acquisition modes intensively, especially streaming (video and/or music only) and downloading (legal and illegal). Light users (35.6 %) also use multiple acquisition modes, but less frequently. We draw theoretical and practical implications, discuss limitations, and suggest ideas for future research.     

A Low-Effort Recommendation System with High Accuracy

In recent studies on recommendation systems, the choice-based conjoint analysis has been suggested as a method for measuring consumer preferences. This approach achieves high recommendation accuracy and does not suffer from the start-up problem because it is also applicable for recommendations for new consumers or of new products. However, this method requires massive consumer input, which causes consumer reluctance. In a simulation study, we demonstrate the high accuracy, but also the high user’s effort for using a utility-based recommendation system using a choice-based conjoint analysis with hierarchical Bayes estimation. In order to reduce the conflict between consumer effort and recommendation accuracy, we develop a novel approach that only shows Pareto-efficient alternatives and ranks them according to the number of dominated attributes. We demonstrate that, in terms of the decision accuracy of the recommended products, the ranked Pareto-front approach performs better than a recommendation system that employs choice-based conjoint analysis. Furthermore, the consumer’s effort is kept low and comparable to that of simple systems that require little consumer input.     

How consumers contribute to the development and continuity of a cultural market

This article examines the “indie” music industry in South Korea. It describes a consumer-led market where network of consumers aided by social media take responsibility for its maintenance and development, specifically the market for indie music in South Korea. With the emergence of digital technology and a participatory culture, the roles of consumers have expanded. Through their commitment and passion for independent music, aided by social media, these consumers have developed a virtual indie music community, which uses a variety of mechanisms, such as producing podcasts, to promote its music. These non-traditional producers regard indie music as an important part of their lives and their existence, which is why they take responsibility for developing the indie community rather than leaving this to a profit-orientated music industry. Therefore, we demonstrate how in South Korea the production of indie music has ceased to be dominated by traditional actors, such as record labels, and is driven by the enthusiasm of music fans. Previous research on cultural markets suggests that consumers play critical roles in the formation and evolution of the market. This study sheds light on this process by depicting a cultural market that is governed by pro-social consumers (rather than anti-market resistance) who pursue a balanced approach between resistance to and negotiated harmony with commercial and social norms rather than drawing a simple boundary between “us” and “other”.     

Quantitative and qualitative insights into consumers’ sustainable purchasing behaviour: a segmentation approach based on motives and heuristic cues

The present study draws on the concepts of motives and heuristics to thoroughly understand consumers’ sustainable consumption behaviour in the context of personal care products. The mixed-methods approach combines real purchasing data with in-depth qualitative data to generate insights with a high external validity. In the first section of the study, quantitative analysis is applied to actual purchasing behaviour (n = 10,772,477) to identify market trends. Three main groupings, along with specific heuristic cues, are established. In the second step, a qualitative study (n = 21) provides deeper insights into consumers’ motives and decision-making processes. By synthesising the quantitative and qualitative research findings, a segmentation approach is developed. Relevant motives and values, and corresponding specific heuristic cues are identified for each consumer segment. Analysis suggests that consumers are motivated by self-interest and environmental motives, and that they use simple heuristic cues to make quick and satisfying purchasing decisions. Both retailers and manufacturers can leverage these insights to seize the opportunities of the developing market for sustainable personal care products.     

An exploratory study of environmental attitudes and the willingness to pay for environmental certification in Mexico

This paper explores how environmental attitudes of consumers in Mexico influence their willingness to pay a premium (or, marginal WTP) for environmentally-certified products. In addition, we also challenge the theoretical assumption that the relationship between environmental attitudes and purchasing is linear. We test our hypotheses with an analysis of marginal WTP based on a survey of 301 Mexican consumers. Using conjoint analysis to determine marginal WTP, we find support for the idea that as attitudes become more pro-environmental, they more than proportionally boost marginal WTP. We conclude our paper by discussing implications for research and practice that focus on environmental segments of consumers.     

Is what you choose what you want?—outlier detection in choice-based conjoint analysis

Choice-based conjoint (CBC) analysis has long been a popular technique in market research. Because CBC is dependent upon respondents’ stated preferences, respondent variability should be taken into account in part-worth estimation. In the spirit of Bayesian residuals within the probit framework, this paper proposes a novel respondent variability measure for CBC, called the “utility deviation” (UD), to detect outliers who have unusually high respondent variability. UD is constructed based on the standardized deviation between a respondent’s true and representative utilities on the made choices. We compare UD with the largest absolute realized deviation (LARD) statistic and the typically used metric, root likelihood (RLH), in the performance of outlier detection using simulated and empirical data. The results show that UD performs slightly better than LARD and significantly outperforms RLH. Finally, we show that performing outlier detection to exclude misleading data can significantly improve the quality of estimation and resultant applications.     

On the Edge of Buying: A Targeting Approach for Indecisive Buyers Based on Willingness-to-Pay Ranges

Targeting the “right” consumers is a core part of marketing. Whereas existing techniques to identify these consumers use demographic or psychographic variables or behaviors such as response probabilities, a proposed new targeting approach builds on consumers’ incremental responses to identify them by their willingness-to-pay (WTP) ranges. These WTP ranges reveal a consumer as a definite buyer, a definite non-buyer, or an indecisive buyer. The proposed theoretical framework indicates that indecisive buyers offer the highest incremental responses to targeted marketing mix activities and thus should be the most preferred targeting group. A sequence of three laboratory experimental studies validates the proposed approach for targeted price discounts and non-price tactics. In addition, a large-scale field experiment involving a consumer engagement campaign that includes observed purchase behavior demonstrates the high external validity and applicability of this approach.     

A cross validation test of four models for quantifying multiattribute preferences

This paper examines the internal predictive validity of four multiattribute preference models: (a) a self-explicated model with equal importance weights; (b) a self-explicated model with unequal weights; (c) Sawtooth Software's Adaptive Conjoint Analysis (ACA); and (d) full profile conjoint analysis. We also discuss the problem of choosing criterion measures for comparing cross validations across models.The authors would like to acknowledge the support of the Huntsman Center for Global Competition and Innovation and the Crosby/Foggitt Fellowship from the Sol C. Snider Entrepreneurial Center, both at the Wharton School.     

Market Segmentation by Cohorts: The Value and Validity of Cohorts in America and Abroad

Marketers often segment consumers on factors such as age, gender, income, stage of life, and geography. Another innovative approach is to group consumers into cohorts. Cohorts are groups of individuals who are born and travel life together and experience similar external events during their late adolescent/early adulthood years. These events influence people to create values, attitudes, and preferences that remain with them for their lifetime. This article reviews and assesses the current literature on American cohorts. The value and the validity of cohorts as a segmentation technique are discussed, as well as areas for future research.     

Being True to Oneself: Investigating Celebrity Brand Authenticity

Celebrity brand authenticity is introduced as a construct that represents consumer perceptions of celebrities being “true to oneself” in their behaviors and interactions with consumers. A scale is developed through two purification stages and the scale's predictive validity is assessed. First, the meaning of celebrity brand authenticity to consumers is explored. Second, the Authenticity Inventory from the psychology literature is adapted to develop a scale for consumer perceptions of celebrity brand authenticity. Celebrity brands are perceived as true to self when they appear genuine in their relationships with consumers and behave in accordance with their perceived held values. Evidence of the convergent and discriminant validity of the celebrity brand authenticity scale is provided, which confirms celebrity brand authenticity as distinct from celebrity attachment, despite containing relational items. Finally, the predictive power of celebrity brand authenticity is confirmed through positively influencing consumer intentions to purchase an endorsed brand. Brand managers can use celebrity brand authenticity to position or develop celebrity brands, as well as in the selection of celebrity endorsers.     

A Conjoint Analysis of Quality Wine

Abstract

Weighted least squares approach for conjoint analysis is used to examine buyer preferences towards wines produced in different Spanish regions. Two producer regions are considered, Na-varra and Aragon, and three wine attributes: price, origin and grape vintage year (wine age). In both regions, differences between urban and rural consumers' preferences are tested. Results indicate that the origin of the grapes is the most important attribute for the wine consumer. Rural consumers prefer locally produced wines while Rioja wines are better considered by urban consumers. The price and the age of the wines are secondary attributes in consumer preferences. Finally, some market segments are formed based on individual consumer preferences and some of their sociodemographic characteristics in order to address differentiated marketing strategies to these segments.     

Tradeoffs Between Price and Quality: How a Value Index Affects

The present research examines how the availability of information about the value of a product, expressed as a ratio of the quality received per dollar, influences preference formation. This index, similar to unit price which provides information about how much quantity is received per dollar, presents consumers with information regarding the quality received per dollar. An experiment that compares consumers' preferences inferred from a choice task with their preferences inferred from a conjoint task was conducted. In the choice task consumers selected the most attractive alternative from a set of options, while in the conjoint task the attractiveness of each option was rated. Consumers, presented with an index of quality received per dollar paid (the value index), are more likely to choose a lower priced, higher value option rather than a higher priced, higher quality option compared to consumers presented with only price and quality information. Clearly, how a consumer chooses to “get the best for his or her money” depends on the ease with which information about the choices can be processed.     

Loyalty differences in the use of internal and external reference prices

Recent findings in reference price research suggest that consumer characteristics may affect whether they use an internal reference price (IPR) or an external reference price (ERP) in price judgments. In this paper, we investigate the role of one such characteristic, brand loyalty, in the use of either type of reference price. Specifically, we employ a latent class-type approach to divide consumers on the basis of their brand loyalty into an ERP and an IRP segment. Analysis of the margarine and liquid detergents categories shows that consumers who are highly loyal to a brand are likely to use external reference prices whereas less brand-loyal consumers rely on internal reference prices. We discuss the implications of this finding and suggest directions for future research.     

A comparison of online recommendation methods: Simultaneous versus sequential approaches

This study investigates the relative profitability of online recommendations (sequential or simultaneous) of durable goods used by various firms, such as Walmart and Amazon. To achieve this, we develop a utility model (specified in terms of product attributes) that captures the complementarity between the recommended products. To recover customers’ utility for simultaneous or sequential purchases of durable goods, we conduct incentive-aligned conjoint experiments in which participants select a combination of fully or partially complementary products. The results reveal that the product attribute associations are more noticeable for fully complementary product categories. In addition, customers tend to balance comparable attributes when buying durable goods sequentially over time, while they reinforce comparable attributes when buying simultaneously. The profit analysis based on the estimates shows that the recommendations for simultaneous purchases can yield higher profits for fully complementary product categories than for sequential recommendation purchases. However, the recommendations for sequential purchases generate higher earnings for partially complementary product categories than for simultaneous recommendation purchases. A simulation study reveals that the profits differ considerably by combinations of product attributes because customers evaluate complementarity among attributes differently between the two recommendations.     

Enhancing the parasocial interaction relationship between consumers through similarity effects in the context of social commerce

With the combination of social media and e-commerce, consumers usually gather all kind of available information for making their final purchase decisions online. From the perspective of interpersonal interaction, we proposed similarity (including external similarity and internal similarity) is an important peripheral informational processing route for consumers to make decisions. Built on the theories of similarity extrapolation, trust transfer and parasocial interaction (PSI), we examined whether similarity could enhance PSI relationship between consumers and the intention to do the social shopping and social sharing. The findings of PLS analysis in this study demonstrated that both external similarity and internal similarity significantly affected consumers’ PSI relationship forming and trust transfer, which in turn exerted profound impacts on consumers’ social commerce behaviors.     

Brand-anchored discrete choice experiment (BDCE) vs. direct attribute rating (DAR): An empirical comparison of predictive validity

The image of a brand provides a key driver of brand equity. To build and control a strong brand image though, brand managers require a valid procedure to measure it. This article empirically compares the predictive validity of two measurement techniques to assess brand image: First, a brand-anchored discrete choice experiment (BDCE) which is based on a brand-anchored conjoint approach where brands serve as the levels for any attribute and which was originally introduced as ranting-based approach by Louviere and Johnson Journal of Retailing, 66, 359–382 (1990) and further extended to a BDCE by Eckert et al. International Journal of Research in Marketing, 29, 256–264 (2012). Second, a direct attribute rating (DAR) approach which is commonly used for commercial applications of brand image measurement. An empirical study using a representative sample of the German beer market shows that BDCE shows significantly higher levels of predictive validity (i.e., higher correlations with the actual market shares of the brands under investigation) than the widely used DAR method.     

What constitutes a “good assortment”? A scale for measuring consumers' perceptions of an assortment offered in a grocery category

This research investigates how consumers form subjective judgments of what constitutes “a good grocery assortment”. By conducting three exploratory focus groups and a field study, we develop a multi-item scale that reflects consumers' cue utilization processes in forming perceptions of a grocery assortment. Our findings suggest that consumers use only a limited number of informational cues to form perceptions about four higher-level assortment dimensions: (1) the assortment's pricing, (2) its quality, (3) its variety, and (4) its presentation. In line with the attitude theory, we found that consumers integrate these higher-level assortment dimensions into a summary evaluation of the grocery category's attractiveness. Accordingly, we derive the grocery assortment perception (GAP) scale as a second-order construct composed of four first-order factors. Significant positive relationships between the GAP scale and customer satisfaction as well as loyalty intentions provide empirical support for the scale's predictive ability and nomological validity. In the last section of this article, we discuss how the GAP scale will support category managers in their assortment decisions and provide directions for further research.