Blog Archives

"Models, Models Everywhere!" Brought to You by R

July 21, 2015
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"Models, Models Everywhere!" Brought to You by R

Statistical software packages sell solutions. If you go to the home page for SAS, they will tell you upfront that they sell products and solutions. They link both together under the first tab just below "The Power to Know" mantra. SPSS separates produc...

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Seeing Data as the Product of Underlying Structural Forms

July 15, 2015
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Seeing Data as the Product of Underlying Structural Forms

Matrix factorization follows from the realization that nothing forces us to accept the data as given. We start with objects placed in rows and record observations on those objects arrayed along the top in columns. Neither the objects nor the measuremen...

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The Ecology of Local Subspaces: Mixtures of Parochial Views

July 9, 2015
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The Ecology of Local Subspaces: Mixtures of Parochial Views

No matter where you live, your view of the world is biased and limited, which is the beauty of this magazine cover.As a marketer, of course, all my maps depict, not place, but consumption. For example, in an earlier post I asked, "What apps are on your...

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Regression with Multicollinearity Yields Multiple Sets of Equally Good Coefficients

July 6, 2015
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Regression with Multicollinearity Yields Multiple Sets of Equally Good Coefficients

The multiple regression equation represents the linear combination of the predictors with the smallest mean-squared error. That linear combination is a factorization of the predictors with the factors equal to the regression weights. You may see the wo...

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The Nature of Heterogeneity in Coevolving Networks of Customers and Products

July 3, 2015
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The Nature of Heterogeneity in Coevolving Networks of Customers and Products

The genre shirt asks, "What kind of music do u listen 2?"Microgenres exist because markets are fragmenting and marketers need names to attract emerging customer segments with increasingly specific preferences. The cost of producing and delivery music n...

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Generalizing from Marketing Research: The Right Question and the Correct Analysis

June 28, 2015
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Generalizing from Marketing Research: The Right Question and the Correct Analysis

The marketing researcher asks some version of the following question in every study, "Tell me what you want?" The rest is a summary of the notes taken during the ensuing conversation.Steve Jobs' quote suggests that we might do better getting a reaction...

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Looking for Preference in All the Wrong Places: Neuroscience Suggests Choice Model Misspecification

June 22, 2015
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Looking for Preference in All the Wrong Places: Neuroscience Suggests Choice Model Misspecification

At its core, choice modeling is a utility estimating machine. Everything has a value reflected in the price that we are willing to pay in order to obtain it. Here are a collection of Smart Watches from a search of Google Shopping. You are free to click...

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Statistical Models with a Point of View: First vs. Third Person

June 2, 2015
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Statistical Models with a Point of View: First vs. Third Person

Marketing data can be collected in the first or third person, and we require different statistical models for each point of view.Netflix encourages you to adopt a third-person perspective when it surveys your taste preferences by asking how often you w...

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Top of the Heap: How Much Can We Learn from Partial Rankings?

May 30, 2015
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Top of the Heap: How Much Can We Learn from Partial Rankings?

The recommendation system gives you a long list of alternatives, but the consumer clicks on only a handful: most appealing first, then the second best, and so on until they stop with all the remaining receiving the same rating as not interesting enough...

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Respecting Real-World Decision Making and Rejecting Models That Do Not: No MaxDiff or Best-Worst Scaling

May 26, 2015
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Respecting Real-World Decision Making and Rejecting Models That Do Not: No MaxDiff or Best-Worst Scaling

Utility has been reified, and we have committed the fallacy of misplaced concreteness.As this link illustrates, Sawtooth's MaxDiff provides an instructive example of reification in marketing research. What is the contribution of "clean bathrooms" ...

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