Dr. Michael R. Hyman Conjoint Analysis. 2 What is Conjoint Analysis? Answer: Family of techniques...

Dr. Michael R. Hyman

Conjoint Analysis

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What is Conjoint Analysis?

Answer:

Family of techniques that model choice by decomposing overall preference or evaluation in terms of the relative values of the components or attributes to respondents

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Applications

• New product design

• Fine-tune marketing mix

• Find segments of consumers with homogeneous preferences

• Simulate markets: Which brand configuration performs best against current and likely competitor brands?

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Examples and Basic Issues Associated with Attribute-based

Conjoint Analysis

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Example #1

Packaged Soup Attributes

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Full Profile Stimulus Card

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Utility Coefficients

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Example #2

Utility Values for Three PC Attributes

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Preferences for Different Combinations of Brewing Time, Capacity, and Cost in a Coffee Maker

Example #3

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Respondent’s Ordering of Various Product Descriptions

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Resultant Derived Utilities

Compute/Estimate these Values

Some Arbitrary Attribute Utility Values and the Resulting Utilities for Various Alternatives Under an Additive Combination Rule

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Attributes Should Be…• Determinant• Easily measured and communicated• Controllable by the company• Realistic• Such that there will be preferences for

some levels over others• Compensatory• As a set, sufficient to define the choice

situation• Without built-in redundancies

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How Many Levels per Attribute?

Must consider:

• Levels and their range should be meaningful, informative, and realistic to consumers and producers

• Avoiding absurd configurations

• Marginal increases in levels can greatly increase respondent’s task

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Which Data Collection Method?

• Full profile: Show complete list of attributes– Limited to 6-7 attributes (Example #1)

• Pair-wise: Show pairs of attributes in matrix; each cell rated from most to least preferred (Example #3)– Lacks realism– Inconsistent responses likely

• Hybrid (ACA): Indicate– Attribute desirability at each level– Attribute importance– Full profile evaluation of a limited subset of product

concepts

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Conjoint Exercises from Dr. Tom Novak, Vanderbilt University

• Airline Travel Preferences

• Movie Theatre Preferences