Attribute Overlap in the Modeling of Customer Product Portfolios

This paper investigates the importance of considering attribute overlap when modeling consumer choices of several products out of a single product class. It extends the hypotheses and model employed by McAlister in order to accommodate a measure of attribute overlap. The model of simple satiation is compared statistically with the satiation-overlap model, and the two are found to provide the same fit and forecasting performances. However, the estimates found are quite different between the two models, and therefore, the value of considering attribute overlap is pointed out. In addition, due to the unstable nature of the model's parameters, the question of the correctness of the model's form is raised.