Telecommunications Discrete Choice Analysis

Case Study

Communications Company Determines Optimal Bundle

Project Objective: 

A national communications company sought to identify the optimal product bundles and pricing options to offer its customers. In order to determine the most effective packaging structure, MDRG conducted quantitative research with residents of cities where the company had a presence. The research was designed to:         

• Determine the relative importance of components of product bundles
• Identify the products and services respondents currently have and who provides them
• Measure the perceived value in having one provider for all communications services in the home 

Research Methodology: 

Data were collected using an Internet survey.

As part of the survey, MDRG utilized a discrete choice analysis to reveal how consumers made their purchasing decisions. Survey respondents were provided with product bundle simulations. They were instructed to pick their preferred package from a set of options.

This methodology offers an advantage over other analytical methods in that it places consumers in realistic situations where they make decisions that can be reliably measured and understood.

Results: 

The trade-offs consumers made in choosing packages were analyzed and optimal package designs were determined. MDRG was able to:  

• Reveal the most important components of a communications bundle  
• Identify features that do not add value that should be cut from bundles
• Determine the optimal bundle and price
• Project purchase rates at various price points