8/3/2019 Conjoint Analysis 12345
1/28
Conjoint Analysis
8/3/2019 Conjoint Analysis 12345
2/28
INTRODUCTION
It is a Research technique devloped in 70s
Dictionary definition-- Conjoint: Joined together,combined.
Marketers catch-phrase-- Features CONsidered
JOINTly
To understand how people make choices .
8/3/2019 Conjoint Analysis 12345
3/28
What is conjoint analysis
Conjoint analysis is a statistical technique used
in market research .
To determine BEST combination of limited
number of attributes of a product which willinfluence the customer
8/3/2019 Conjoint Analysis 12345
4/28
How Does Conjoint Analysis Work?
We vary the product features (independent variables) to
build many (usually 12 or more) product concepts
We ask respondents to rate/rank those product concepts
(dependent variable)
Based on the respondents evaluations of the productconcepts, we figure out how much unique value (utility)
each of the features added
8/3/2019 Conjoint Analysis 12345
5/28
Whats Good about Conjoint?
When respondents are forced to make difficult
tradeoffs, we learn what they truly value .
More realistic questions .
Powerful way of capturing what really drives
customers to buy one product over another .
8/3/2019 Conjoint Analysis 12345
6/28
Conjoint Design
A product or service area is described in terms a
number of attributes & levels .
For eg. A product may have attributes as size,
speed, colour, price and so on..
So for attribute colour levels might be red , blue ,
green so on
8/3/2019 Conjoint Analysis 12345
7/28
Types of Conjoint Analysis
1. Adaptive Conjoint AnalysisACA
2. Choice Based Conjoint Analysis- CBC
3. Discrete Choice Analysis
4. Full profile Conjoint Analysis
8/3/2019 Conjoint Analysis 12345
8/28
Market Simulations
Make competitive market scenarios and predict
which products respondents would choose
Accumulate (aggregate) respondent predictions
to make Shares of Preference (some refer to
them as market shares)
8/3/2019 Conjoint Analysis 12345
9/28
How to Learn What Customers
Want? Ask Direct Questions about preference:
What brand do you prefer? What Interest Rate would you like?
What Annual Fee would you like?
What Credit Limit would you like?
Answers often trivial and unenlightening (e.g.
respondents prefer low fees to high fees, higher
credit limits to low credit limits)
8/3/2019 Conjoint Analysis 12345
10/28
Create Attribute List
Attributes assumed to be independent (Brand,
Speed, Color, Price, etc.)
Each attribute has varying degrees, or levels
Brand: Coke, Pepsi, Sprite
Speed: 5 pages per minute, 10 pages per minute Color: Red, Blue, Green, Black
Each level is assumed to be mutually exclusive of the
others (a product has one and only one level level of that
attribute)
8/3/2019 Conjoint Analysis 12345
11/28
How do we proceed ???
Company A & Company B
Phone A Phone B
Weight 250 grams 150 grams
Battery Life 21 hours 10 hours
Price Rs 1500 Rs 2800
Utility value according to
weight
8/3/2019 Conjoint Analysis 12345
12/28
Continued
Relative importance Now select
Phone A Phone B
Weight 250 grams
(15)
150 grams
(35)
Battery Life 21 hours
(15)
10 hours (10)
Price Rs 1500 (25) Rs 2800 (15)
Utility 55 60
8/3/2019 Conjoint Analysis 12345
13/28
Using the results..
Knowing the values of the utility values of
each of the levels, but what we really want
to know is how our product/servicecompares to our competitors and how we
can best optimise the value we give to the
customer.
8/3/2019 Conjoint Analysis 12345
14/28
. For a business making the choice of what to
change or improve thus comes down to
understanding the cost impact of making the
change balanced against the extra value to
the customer.
Would you get a better return spending
more on development to bring the weight of
the phone down, or would it be worthbringing the price down despite the lost
profit margin (usually the former!)?
8/3/2019 Conjoint Analysis 12345
15/28
Other Example Of Conjoint
Analysis According to responses, here is the ranking
of 5 attributes :-
Flavor23 %
Price47 %
Container4 %
Freshness19 %
Healthiness7%
8/3/2019 Conjoint Analysis 12345
16/28
.
.
8/3/2019 Conjoint Analysis 12345
17/28
.
.
8/3/2019 Conjoint Analysis 12345
18/28
.
.
8/3/2019 Conjoint Analysis 12345
19/28
.
.
8/3/2019 Conjoint Analysis 12345
20/28
Using the results..
Given the consumers' ratings of diverse
combinations, the software package
computes a mathematical regression to tellus how important each of the five factors is
to the individual responding consumer, and
to the group of responding consumers as awhole.
8/3/2019 Conjoint Analysis 12345
21/28
.
The end result is a quantitative, what
consumers really want, with each attribute
evaluated in the context of the others.
8/3/2019 Conjoint Analysis 12345
22/28
.Advantages
estimates psychological tradeoffs that
consumers make when evaluating several
attributes together
measures preferences at the individual level
uncovers real or hidden drivers which may
not be apparent to the respondent
themselves
realistic choice or shopping task
8/3/2019 Conjoint Analysis 12345
23/28
.Advantages (cont.)
able to use physical objects
if appropriately designed, the ability to
model interactions between attributes can beused to develop needs based segmentation
8/3/2019 Conjoint Analysis 12345
24/28
Disadvantages
designing conjoint studies can be complex
with too many options, respondents resort to
simplification strategies
difficult to use for product positioning
research because there is no procedure for
converting perceptions about actual featuresto perceptions about a reduced set of
underlying features
8/3/2019 Conjoint Analysis 12345
25/28
Disadvantages (cont.)
respondents are unable to articulate attitudes
toward new categories, or may feel forced
to think about issues they would otherwise
not give much thought to
poorly designed studies may over-value
emotional/preference variables and
undervalue concrete variables
does not take into account the number items
per purchase so it can give a poor reading of
market share
8/3/2019 Conjoint Analysis 12345
26/28
Conclusion.
Conjoint analysis is one of the terms used to
describe a broad range of techniques for
estimating the value people place on theattributes or features that define a product
and service. Conjoint Analysis is perfect for
answering these types of questions: What is the optimal feature set for my
product?
8/3/2019 Conjoint Analysis 12345
27/28
. What price level maximizes its
profitability? What services are consumers willing to pay
more for in the product?
Which of these changes will increase ourmarket share?
What impact will this have on my current
suite of products/cannibalization?
8/3/2019 Conjoint Analysis 12345
28/28
.
Thanks
Top Related