A product positioning model with costs and prices

In this paper products are conceptualized as bundles of attributes so that consumers' perceptions of existing products and their conceptions of ‘ideal’ products can be represented as points in an attribute space. Preferences are assumed to be governed by these locations.A new approach to the problem of finding an optimal position for a new product in the attribute space is presented.The sales-oriented objective function of existing models is replaced by a profit-oriented function, which explicitly observes price and positioning costs. The approach generalizes the underlying behavioral hypothesis and reduces computing time.