Models for calculating preference shares

There are two models for calculating market shares under Advanced settings:

  • Share of preference model, which is appropriate for low-risk or frequently purchased products: FMCG, software, etc, where there is a strong impulse buying behaviour in play. This model is applicable in the vast majority of applications. By default, will set the type of product to be low-risk, where people tend to make rational decisions on all purchases.

  • First-choice model, which is suitable for high-risk or seldom purchased products: education, life insurance, pension plans, etc, where the stakes are high, life-or-death situation such as chronic medication options, and it will use up a large portion of respondent’s disposable income. In high-risk simulations, people tend to select the single most preferred product even when it is only marginally more preferable than the next best product.

The source of business function

In most cases, both simulation models produce similar results. However, at times, simulations results will differ greatly from actual market shares, hence adjustments may be needed.

You can also check out scale factor in simulations for more details.