Conjoint Analysis

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Conjoint Analysis
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Why Use Conjoint Analysis?
Conjoint analysis is a market research tool for
developing effective product design. Using
conjoint analysis, the researcher can answer
questions such as What product attributes are
important or unimportant to the consumer? What
levels of product attributes are the most or
least desirable ones in the consumers mind?
What is the market share of preference for
leading competitors products versus our existing
or proposed product? Answers to these questions
are of crucial importance in the design and
launch of a successful product.
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Conjoint Analysis
For measuring consumer preferences about the
attributes of a product or service. To measure
the trade-offs people make in choosing between
products and service providers. To predict
their choices for future products and services.
To assumes that a product can be broken down
into its component attributes. For example, a car
has attributes such as color, price, size,
miles-per-gallon, and model style. Using
Conjoint Analysis, the value that individuals
place on any product is equivalent to the sum of
the utility they derive from all the attributes
making up a product. Further, it assumes that
the preference for a product and the likelihood
to purchase it are in proportion to the utility
an individual gains from the product.
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Using conjoint analysis, you can determine both
the relative importance of each attribute as well
as which levels of each attribute are most
preferred. If the most preferable product is not
feasible for some reason, such as cost, you would
know the next most preferred alternative.
If you have other information on the respondents,
such as background demographics, you might be
able to identify market segments for which
distinct products can be packaged. For example,
the business traveler and the student traveler
might have different preferences that could be
met by distinct product offerings.
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Three phases in the analysis of conjoint data
There are collection of trade-off data through
a questionnaire, statistical analysis of the
data, market simulation.
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Collection of trade-off data Questionnaire
In the interactive, conjoint portion of the
questionnaire, respondents are given various
tasks which allow for the measurement of their
perceptions of market research companies.
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The Carpet-Cleaner Study
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An Orthogonal Array
The total number of profiles resulting from all
possible combinations of the levels becomes too
great for respondents to rank or score in a
meaningful way. For this reason, frequently only
a subset of all possible profiles is used in the
experiment. The subset, called an orthogonal
array, is a type of design in which only main
effects are considered and interactions are
assumed to be negligible.