Exploration of product Value - Characteristic relationship: Partial least squares path modeling for product design and development

Estimating the product Value-Characteristic (VC) relationship is the most important task for deciding on the mix and the levels of product attributes of a new product targeted at a well established product market segment. In this paper, Partial Least Square Path Modeling was used to investigate the VC relationship of the US Sedan car market sales data from 2008 to 2010. A two-phase case study was conducted to achieve two primary objectives of empirical validation of Customer Revealed Value (CRV) as an indicator of the value generated by product characteristics; and formulation of a simplified VC model with most influencing variables. CRV was successfully validated, and it was used to get the simplified model with an improved goodness of fit value. In addition, CRV was used for the first time to explore the VC relationship of a market segment with latent variables in this study.