Conjoint Analysis

Design and Application

CONJOINT METHODOLOGY- SUMMARY

1. What attributes to include in the study? Identify actionable attributes through expert judgment, consumer survey, or

focus groups. Attributes can be product features/options, structural characteristics, appearance of product, and marketing mix variables

Use attributes that the target audiences can relate to

2. How many levels of attributes to include? Identify discrete and continuous attributes (continuous attributes can be

discretized) In discrete case, generally can include 3 to 4 levels. Ex: Minimum,

Maximum, and 1 or 2 levels in between.

3. How to get data from consumers? Present “profiles” consisting of combinations of attribute levels. Each profile

is a product/new concept in the “full-profile” approach. Consumers either rank-order or rate profiles .

4. How to minimize profiles presented to consumers? “Orthognal designs” to reduce number of profiles presented to consumers “Adaptive conjoint” to minimize difficult of conjoint task by using prior

information provided by consumers. Several commercial software, such as Saw Tooth, are available for this purpose.

“Hybrid conjoint” techniques may be used to distribute evaluation task among consumers

5. What to do with the data collected from consumers? Assess relative importance of attributes Compute utility associated with each level of each attribute Perform simulations to identify good product designs

6. How to impact management decisions with conjoint analysis? Use graphs to summarize data! Translate results to managerially useful indices such as expected sales or

market share for chosen product concepts Provide pictorial renditions of chosen concepts

4. How to minimize profiles presented to consumers? “Orthognal designs” to reduce number of profiles presented to consumers “Adaptive conjoint” to minimize difficult of conjoint task by using prior

information provided by consumers. Several commercial software, such as Saw Tooth, are available for this purpose.

“Hybrid conjoint” techniques may be used to distribute evaluation task among consumers

5. What to do with the data collected from consumers? Assess relative importance of attributes Compute utility associated with each level of each attribute Perform simulations to identify good product designs

6. How to impact management decisions with conjoint analysis? Use graphs to summarize data! Translate results to managerially useful indices such as expected sales or

market share for chosen product concepts Provide pictorial renditions of chosen concepts

OTHER COMMERCIAL APPLICATIONS

Consumer Non-durables Other Products1. Bar soaps 1. Automotive styling2. Hair shampoos 2. Automobile tires3. Carpet cleaners 3. Car batteries4. Synthetic-fiber garments 4. Ethical drugs5. Gasoline pricing 5. Employee benefit package6. Panty hose 6. Job offers to MBA’s

Financial Services Other Services1. Branch bank services 1. Car rental agencies2. Auto insurance policies 2. Telephone service pricing3. Health insurance policies 3. Information retrieval svcs.4. Credit card features 4. Medical laboratories5. Consumer discount card 5. Employment agencies

Industrial/Business Goods Transportation1. Copying machines 1. Air Canada2. Printing equipment 2. IATA3. Fax machines 3. American Airlines4. Data transmission 4. Canadian National Railway5. Laptop computer 5. AMTRAK

Dating Conjoint

What attributes would one look for in an ideal mate?

What are the levels of these attributes?

Would any combinations be unacceptable?

Dating Conjoint Design Attribute 1: Age

– levels: 18, 25, 35, 45, 60

Attribute 2: IQ– levels: low, average, high

Attribute 3: Build– levels: heavy set, slim, athletic, obese

Attribute 4: Education– levels: High School, College, Graduate

Attribute 5: Height– levels: 6’0”, 5’10”, 5’6”, 5’0”