Preference-rank translation is a mathematical technique used by marketers

Marketing

Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

 to convert stated preferences into purchase probabilities, that is, into an estimate of actual buying behaviour. It takes survey data

Statistical survey

Survey methodology is the field that studies surveys, that is, the sample of individuals from a population with a view towards making statistical inferences about the population using the sample. Polls about public opinion, such as political beliefs, are reported in the news media in democracies....

 on consumers’ preferences and converts it into actual purchase probabilities.

A survey might ask a question

Questionnaire construction

A questionnaire is a series of questions asked to individuals to obtain statistically useful information about a given topic. When properly constructed and responsibly administered, questionnaires become a vital instrument by which statements can be made about specific groups or people or entire...

 using a ranking scale

Scale (social sciences)

In the social sciences, scaling is the process of measuring or ordering entities with respect to quantitative attributes or traits. For example, a scaling technique might involve estimating individuals' levels of extraversion, or the perceived quality of products...

 such as :

Please rate the following products from 1 (most preferred) to 5 (least preferred).

___ product A

___ product B

___ product C

___ product D

___ product E

A marketing researcher will re-specify the numerical values during codification. 1 will become 5, 2 will become 4, 4 will become 2, 5 will become 1, and 3 will remain the same. In this way greater values will correspond with greater preference.

Next, the researcher uses a data reduction technique like factor analysis

Factor analysis

Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved, uncorrelated variables called factors. In other words, it is possible, for example, that variations in three or four observed variables...

 to obtain aggregate scores. To convert these aggregate rankings into purchase probabilities, each category (in this case, each product) will be weighted with a translation coefficient. These weights are predefined.

A typical weighting scheme is:


first choice = 75%

second choice = 17%

third choice = 6%

fourth choice = 2%

fifth choice = 0%

The weighting schemes vary depending on the variables being measured.

The following chart illustrates the procedure:

Other purchase intention/rating translations include logit analysis and the intent scale translation

Intent scale translation

Intent scale translation is a mathematical technique used by marketers to convert stated purchase intentions into purchase probabilities, that is, into an estimate of actual buying behaviour...

.

See also : marketing research

Marketing research

Marketing research is "the function that links the consumer, customer, and public to the marketer through information — information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve...

, New Product Development

New product development

In business and engineering, new product development is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible or intangible...

, marketing

Marketing

Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

, preference regression

Preference regression (in marketing)

Preference regression is a statistical technique used by marketers to determine consumers’ preferred core benefits. It usually supplements product positioning techniques like multi dimensional scaling or factor analysis and is used to create ideal vectors on perceptual maps.-Application:Starting...

, quantitative marketing research

Quantitative marketing research

Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying...