Abstract
A new approach is proposed to evaluate new‐product opportunities. This approach uses the distribution of brand‐purchase probability of the new product over a population of potential customers and the outputs from conjoint analysis. The heterogeneous distribution of brand‐purchase probability is expressed by a beta binomial brand‐choice model compounded with a negative binomial product‐class purchase‐incidence model. The resulting model provides a way to predict trial and repeat‐purchase patterns of new‐product concepts. The paper discusses the development of the model. It also discusses issues of measurement, estimation, testing, and implementation of the proposed approach based on actual empirical data.