Optimal positioning of new product-concepts: Some analytical implications and empirical results

This paper presents an analytical approach to determine optimal target positions (locations) for a discontinuous innovation in the perceived product-attributes space. The new product-concept positioning problem involves the determination of technologically and economically feasible (but believable) of either the specific combination(s) of the levels of the perceived product’s attributes, or the identification of subregion(s) in the space as targets that have the potential to optimize a certain objective set by the firm. Typically, researchers have approached this problem by applying mathematical programming techniques and various algorithms/heuristics have been proposed to solve the resultant problem. Their implications depend, of course, on the specific configurations and values of the parameters of the problem. This paper focuses on qualitative insights and generalizable location implications. The authors rely on the concepts of consumer preference, choice, market segmentation, and technological constraint to derive various analytical insights in the context of new product-concept positioning. Empirical studies addressing these issues in the consumer marketing area are presented, and directions for future research are also provided.