Modeling customer preferences using multidimensional network analysis in engineering design

Abstract

Motivated by overcoming the existing utility-based choice modeling approaches, we present a novel conceptual framework of multidimensional network analysis (MNA) for modeling customer preferences in supporting design decisions. In the proposed multidimensional customer–product network (MCPN), customer–product interactions are viewed as a socio-technical system where separate entities of ‘customers’ and ‘products’ are simultaneously modeled as two layers of a network, and multiple types of relations, such as consideration and purchase, product associations, and customer social interactions, are considered. We first introduce a unidimensional network where aggregated customer preferences and product similarities are analyzed to inform designers about the implied product competitions and market segments. We then extend the network to a multidimensional structure where customer social interactions are introduced for evaluating social influence on heterogeneous product preferences. Beyond the traditional descriptive analysis used in network analysis, we employ the exponential random graph model (ERGM) as a unified statistical inference framework to interpret complex preference decisions. Our approach broadens the traditional utility-based logit models by considering dependency among complex customer–product relations, including the similarity of associated products, ‘irrationality’ of customers induced by social influence, nested multichoice decisions, and correlated attributes of customers and products.