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    Conjoint Analysis - Class

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    Sakthirama Vadivelu
    Conjoint analysis is a multivariate technique used to understand consumer preferences for products and services. It involves consumers evaluating combinations of attributes that make up a product or service. Their evaluations are then used to determine the relative importance or "part worth" of each attribute. Conjoint analysis can be used by companies to identify the optimal combination of features for a product, understand how attributes contribute to overall preferences, segment customers based on attribute preferences, and predict market shares for potential new products or service offerings. The process involves identifying attributes, designing profiles for consumers to evaluate, collecting data, analyzing results using regression, and simulating aggregate choices in the market.

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    Conjoint Analysis - Class

    Uploaded by

    Sakthirama Vadivelu
    115 views10 pages
    Conjoint analysis is a multivariate technique used to understand consumer preferences for products and services. It involves consumers evaluating combinations of attributes that make up a product or service. Their evaluations are then used to determine the relative importance or "part worth" of each attribute. Conjoint analysis can be used by companies to identify the optimal combination of features for a product, understand how attributes contribute to overall preferences, segment customers based on attribute preferences, and predict market shares for potential new products or service offerings. The process involves identifying attributes, designing profiles for consumers to evaluate, collecting data, analyzing results using regression, and simulating aggregate choices in the market.

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    CONJOINT ANALYSIS

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    Conjoint analysis is a multivariate technique used to understand consumer preferences for products and services. It involves consumers evaluating combinations of attributes that make up a product or service. Their evaluations are then used to determine the relative importance or "part worth" of each attribute. Conjoint analysis can be used by companies to identify the optimal combination of features for a product, understand how attributes contribute to overall preferences, segment customers based on attribute preferences, and predict market shares for potential new products or service offerings. The process involves identifying attributes, designing profiles for consumers to evaluate, collecting data, analyzing results using regression, and simulating aggregate choices in the market.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    115 views10 pages

    Conjoint Analysis - Class

    Uploaded by

    Sakthirama Vadivelu
    Conjoint analysis is a multivariate technique used to understand consumer preferences for products and services. It involves consumers evaluating combinations of attributes that make up a product or service. Their evaluations are then used to determine the relative importance or "part worth" of each attribute. Conjoint analysis can be used by companies to identify the optimal combination of features for a product, understand how attributes contribute to overall preferences, segment customers based on attribute preferences, and predict market shares for potential new products or service offerings. The process involves identifying attributes, designing profiles for consumers to evaluate, collecting data, analyzing results using regression, and simulating aggregate choices in the market.

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    CONJOINT ANALYSIS

    What is Conjoint Analysis?


    Multivariate technique
    to understand how respondents develop preferences for

    products or services.
    Consumers evaluate the value or utility of a product /

    service / concept / idea (real or hypothetical) by combining


    the utility provided by each attribute characterizing the
    product / service / concept / idea

    What is Conjoint Analysis?


    A decompositional method.
    Respondents provide overall preference of combos of

    attributes of products that are presented to them.

    These evaluations are then used to infer the utilities of the

    individual attributes comprising the products.

    In many situations, this is preferable to asking respondents

    how important certain attributes are, or to rate how well a


    product performs on each of a number of attributes

    Managerial uses of Conjoint Analysis


    After determining the contribution of each attribute to the
    consumers overall preference, one could
    Define the product / service with the optimal combo of
    features
    Show the relative contributions of each attribute and each
    level to the overall evaluation of the object
    Isolate groups of customers who place differing importance
    on different features
    Identify marketing opportunities by exploring the market
    potential for feature combos not currently available
    Predict market shares of different products / services with
    different sets of features

    Commercial Applications
    Technique is widely used by consumer and industrial product

    companies, service companies, marketing research, advertising and


    consulting firms
    Over 400 commercial applications per year even in the mid 80s
    Types of applications include
    Consumer durables: automobiles, refrigerators, car stereos, food processors,

    HDTV
    Industrial products: copy machines, forklift trucks, computer software, aircraft
    Consumer nondurables: bar soaps, hair shampoos, disposable diapers
    Services: car rentals, credit cards, hotels, performance art series, rural health
    care systems, BART
    Other: MBA job choice

    Steps in CA
    Identification of respondents
    Identification and definition of various attributes of products
    Specification of attribute variation and levels
    Creation of objects (experimental design)
    Creation of instrument, including socioeconomic, demographic and usage

    questions
    Sampling plan
    Data collection
    Data analysis: Typically, regression analysis separately by respondent
    Simulating aggregate choices
    Market segmentation

    Steps in the analysis


    Each of the selected profiles is presented to respondent
    Respondent indicates her / his preference for each of the profiles by:
    Rank ordering the profiles, or
    Rating them on a 1-100 scale, or
    Choosing the most preferred alternative
    Depending on the above, an ordinal regression (LINMAP), a regular

    regression or a logit model is fitted to the data


    Dependent variable is the preference measure. Independent variables

    are dummy variables, i.e., presence / absence of each of the attributelevels


    Estimated coefficient are called part worths

    Simulating aggregate choices


    Objective is to forecast likely market shares of attribute combos
    which represent potential management actions, in a defined
    competitive scenario
    Translating Utilities into Choice Predictions

    First Choice Rule


    Highest utility profile chosen
    by each respondent

    Share of Preference Rule


    Predict choice probabilities
    using a model such as Logit

    Both methods ignore marketing variables such as advertising weight


    and distribution which are typically not in the conjoint design. Fix:
    Adjust the market shares using this additional information

    Using CA for segmentation


    Two-Stage Approaches
    A priori
    Researcher selects
    specific attributes

    Post hoc
    Full set of
    attributes used

    Clustering (K-means)

    Relate clusters to background variables


    such as demographics using techniques
    like discriminant analysis

    One-Stage Approach

    Concomitant variable
    Latent Class Conjoint
    Simultaneous clustering
    and profiling using
    background characteristics

    THANK YOU

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