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Conjoint Analysis

Conjoint Analysis. 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. Applications. New product design Fine-tune marketing mix

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Conjoint Analysis

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  1. Conjoint Analysis Dr. Michael R. Hyman

  2. 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

  3. 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?

  4. Examples and Basic Issues Associated with Attribute-based Conjoint Analysis

  5. Packaged Soup Attributes Example #1

  6. Full Profile Stimulus Card

  7. Utility Coefficients

  8. Utility Values for Three PC Attributes Example #2

  9. Preferences for Different Combinations of Brewing Time, Capacity, and Cost in a Coffee Maker Respondent’s Ordering of Various Product Descriptions 10 Example #3

  10. Resultant Derived Utilities Some Arbitrary Attribute Utility Values and the Resulting Utilities for Various Alternatives Under an Additive Combination Rule Compute/Estimate these Values

  11. 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

  12. 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

  13. 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

  14. Conjoint Exercises from Dr. Tom Novak, Vanderbilt University • Airline Travel Preferences • Movie Theatre Preferences

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