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Conjoint Analysis
Description:
Conjoint analysis provides an objective
estimation of the value that buyers place
on the attributes or features which define
products and services. The utility estimates
derived from conjoint studies can be used
to answer marketing questions related to
pricing, segmentation, forecasting, design,
and product promotion.
Objectives:
- Generate predictive rather than descriptive
results.
- Estimate demand curves, substitution
effects, and cannibalization.
- Quantify product attribute value trade-offs.
- Price sensitivity testing.
Sample Issues:
- Which out of a range of
product features are most valued by customers
and how does this differ by customer type?
- How price sensitive is
one market segment compared to another?
- How should R & D dollars
be invested in order to ensure that a new
product is going to be a �winner�?
- What is the estimated willingness-to-pay
for a particular desirable product feature?
Process:
- Determine which product/service attributes
or features are most important to the
market and various types of customers.
- Determine the best way to recruit respondents
and how the data will be captured.
- Determine which specific conjoint methodology
will best fit the research problem.
- Create an experimental design that
will allow the calculation of main effects
and key interactions between the attributes
being studied.
- Data collection: after pre-testing
the attributes and survey instrument,
begin collecting data from the target
market.
- Calculate the utilities for each respondent
or for groups of respondents; this includes
product attribute importance and preferences
for specific level of attribute-based
features or benefits.
- Combine with non-conjoint survey results
to correlate preferences to market segment,
or any other key firmographic elements.
- When needed, create a market simulation
model to predict the impact of changes
in existing products and the introduction
of new products on the market.
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