Stages to Purchase

1
Traditional Method for Collecting Information
About Customer Needs and Wants
Not Important
Very Important
1 2 3 4 5 1 2
3 4 5 1 2 3
4 5
How important is low price? How important is
high quality? How important is good service?
2
Basics of Conjoint Analysis

• Robert Eng and Ashok Rao
• Babson College

3
Techniques
The following are some techniques which aid
business in translating product ideas
into marketable products Conjoint
Analysis Perceptual Maps House of Quality
4
Concept Definition
What is the product ? Who are the customers
? How appealing is the concept ? Will it be
profitable ?
5
Types of Analysis
Attribute importance - in aggregate -
by segment Predicting market share
6
Rank 1 best 8 least
Caramel Content Chocolate Type Nut
Bitter-Sweet Sweet Sweet Sweet
Bitter-Sweet Sweet Bitter-Sweet Bitter-Sweet
0 15 15 0 15 0 15 0
A B C D E F G H
40 40 0 40 0 0 40 0
7
Caramel Content
0 Caramel
15 Caramel
Chocolate Content
Chocolate Content
Sweet Bitter
Sweet Bitter
0 40
Nut Content
8
Attribute Values
Values Importance
Attribute Sweet Bitter/sweet 0 Caramel
Center 15 Caramel Center 0 Nuts 40 Nuts
9
Total Utility
Share of preference
10
Steps for Conjoint Analysis

• Identify possible attributes for
• the potential target market
• Select salient attributes (max. 5)
• Assign levels to each attribute
• Sample the potential target market
• Compute attribute importance
• Develop product concept based on
• attribute importance
• Project market share and financial viability
• Select a product and map market segments
• based on preference
• Develop the marketing mix program