Compositional and Decompositional Approaches in Measurement of Stated Consumer Preferences

Preferences reflect tastes of consumers and their personalities. Knowledge of consumer preferencesin the long term can contribute to meeting their expectations better and thus strengthening thecompany’s competitive position in the market as well as increasing its share in it. This is especiallyimportant nowadays when companies are forced to operate in conditions of rapidly changing (or eventurbulent) environment.Research of consumer preferences may be carried out both on the basis of the historical as well as anticipativedata. These two sources of information about consumer preferences allow specifying methodsof revealed preferences analysis and stated preferences analysis. Stated preferences applied to declared market behaviour of consumers. There are three approaches that determine measurement of consumerpreferences: compositional approach, decompositional approach and mixed approach.The article discusses two main approaches in modelling consumer preferences: compositional and decompositionalapproach. Choosing one of them determines both how to collect data about preferences,methods of analysis, as well as the form of the model describing the preferences. The results of thistype of analysis can be used in the course of further research into the product and taking innovativeactions, and thus contribute to strengthening the competitive position of the company on the marketand increase its shares in it.