Question

Topic: Research/Metrics

Measuring Customer Living Preferences

Posted by andy.hofmeister on 250 Points
I'm stuck -- On our campus we have just finished building a new student housing complex. As with many campuses students have a meal plan and eat at a dining hall. This new community is by far the most expensive living option.

I've been asked to determine if adding kitchenettes to the complex would increase it's attractiveness, and if so how much. We have built a mock-up of the kitchenettes in one unit. Some of the admins who are in favor of the kitchenettes have taken a few students to review the remodeled unit and an original unit. They are convinced that the research I've done to date that points to the price as the biggest deterrent must be wrong. They base that decision on the fact that when they show the same group of students both options most prefer the kitchenette unit.

While I'm in agreement that the kitchenettes will help (a little) spending more money on this is taking us in the wrong direction since price is the issue.

Is anyone aware of some kind of published research that gets at what I'm calling the two apples problem? If I give someone the choice between one free apple or two free apples most will choose two apples even if they only want one. Without factoring in price the opinions gathered that way are (in my mind) useless. Is there by any chance a term for this kind of problem that might clue me in on where to look for info?
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RESPONSES

  • Posted by Mikee on Member
    What kind of surveys have you done thus far? Perhaps you need to ask out of all the options (include the price for each) where would students want to live.

    Ask them why they made this choice. Include many options; location, cost, age of building, where friends are living, food, amenities, etc. I would have them rank them from most important to least important.

    Ask them what would need to change for them to consider living in the new building. a
    Again offer them many options. Perhaps a rating system where they offer what are the most important issues and what are the least.

    Have all students complete this survey. Perhaps make it part of the application process for housing.

    This is the only way to get to the bottom of the issue.
  • Posted by andy.hofmeister on Author
    Mikee, Tinker, and Mbarber,
    Thanks for the input. To answer your questions - Mbarber hit the nail (I think) on the head with:
    "Given your choice of a kitchenette, if the shared kitchen was X per week, how much more would you be prepared to pay for the benefits of the kitchenette?"

    Of course an additional amenity would be preferred. The focus of my research has been to try to answer the question of "If we add the kitchens would it change your buying decision." What I have done are comparison surveys i.e. show one group the new design ask what they think the value is. Show another separate group the original design ask them the same value question. The difference between the answers starts getting at how much the kitchenettes are valued.

    What I really need find is some sort of authoritative source that discounts the example provided by mbarber "Ridiculously market analysts and their naive managers then produce reports which say things like the following: '62% of all people indicated they would buy this product if the new features were added...'

    No that is NOT what the research said. What the research said was that with all other things being equal, given a choice between a product with standard and improved features, X % said they preferred the one with improv4d features."

    We have a saying here "anyone from more than 50 miles from campus must know more than us" What I need is to find someone who has published something that gets at this issue. I need to be able to backup my approach with an "expert."

    It's a fairly simple thing in my mind that I seem to have a hard time convincing the decision makers of. My concern is they put in the kitchens ignore the price problem and then wonder what I've screwed up when the place still doesn't fill.

    Any thoughts on where I can find such a thing?
  • Posted on Member
    The pricing structure and amenities should have been based on a structured model. It is late in the phase (poor planning) to now begin thinking about adding kitchenettes to a newly constructed student complex.

    Feasability studies, market analysis and surveys should have implemented in the planning phase followed by construction of a housing demand model. It sounds like your university has put the cart before the horse.

    Here are a couple of links regarding facility planning and project management that may/may not help you in this phase of your project:

    https://www.facilityplanners.com/portfolio/cg.aspx?pt=Housing

    https://www.appa.org/FacilitiesManager/article.cfm?itemnumber=606&parentid=...

    Good luck,

    Marketing-Riot
  • Posted by Jay Hamilton-Roth on Accepted
    This topic is described well in Chapter 1 of Dan Ariely's book "Predictably Irrational" (https://www.predictablyirrational.com/?page_id=131). It's hard for people to deal with an either-or situation, and you can artificially manipulate people's biases (or simply learn how to pitch the offer) by introducing a 3rd choice into the equation. People can't cope with A vs. B well, but A vs. B vs. C allows them to feel like they can make an informed choice.

    The one vs. two free apples is covered in another chapter as well...
  • Posted by andy.hofmeister on Author
    Jay,
    Perfect - I've ordered the book you suggested. A PhD from MIT backing me up is just what I needed. Thanks --A

    Just to defend my colleagues here who planned this community in the first place. A pretty good effort went in the research and design. Three different market studies were conducted prior to the design. Student task forces were created to get input from real people in this area. What changed from start to finish is the upper administration had to scale back on admissions due to unforeseeable budget constraints. This has drastically changed the size of the population of possible customers for this community.

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