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Multivariate Data Analysis

Conjoint analysis is a statistical technique used in market research to determine how people value different features that make up a product or service. It works by asking people to make choices between hypothetical products defined by sets of attributes at different levels. This allows researchers to calculate part-worth utilities that show the relative importance and value that consumers associate with each attribute level and determine drivers of preferences. Conjoint analysis can be used to identify the most preferred product concept, understand trade-offs people make, segment markets, and predict choice. While it provides insights into consumer decision making, conjoint analysis has limitations such as complexity, oversimplification by respondents, and not accounting for purchase quantities.

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Tushar Srivastava
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69 views16 pages

Multivariate Data Analysis

Conjoint analysis is a statistical technique used in market research to determine how people value different features that make up a product or service. It works by asking people to make choices between hypothetical products defined by sets of attributes at different levels. This allows researchers to calculate part-worth utilities that show the relative importance and value that consumers associate with each attribute level and determine drivers of preferences. Conjoint analysis can be used to identify the most preferred product concept, understand trade-offs people make, segment markets, and predict choice. While it provides insights into consumer decision making, conjoint analysis has limitations such as complexity, oversimplification by respondents, and not accounting for purchase quantities.

Uploaded by

Tushar Srivastava
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Multivariate Data Analysis Conjoint Analysis

Click to edit Master subtitle style

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What Is Conjoint Analysis?


Conjoint to edit Master subtitle style Click analysis is a statistical technique used in market research to determine how people value different features that make up an individual product or service.

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Important Terminology
Factor Level Profile Utility Part-Worth

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Understanding the Conjoint Analysis


Conjoint analysis take these attributes and level description of product/services by asking people to make a number of choices between different product

Click to edit Master subtitle style

EXAMPLE:- Would you choose Phone A or Phone B


Weight Battery life price Phone A 200g 21hours Rs 5000 Phone B 120g 10 hours Rs 8000 6/5/12

Researcher can work out numerically (from

the responses)have valuable each of the level is relative others around it- this value is known as the utility of the level see which attribute make have the greatest impact in making a choice.
12 10 8 6 4 2 0 6/5/12

We can also compare across attributes to

12 10 8 Utilies value for each level of weight 6 Relative importance of attribute 4 2 0

Usages of Conjoint Analysis

Individual Consumer Segment Level Across Segment

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Designing a Conjoint Analysis


Stage 1

Formulation of the Problem


Stage 2

Construct the stimuli


Stage 3

Decide on the form of input


Stage 4

Select the conjoint procedure 6/5/12

A Practical Example of Conjoint Analysis


Q: Would you prefer an airline travel with A

or B?

A: regular seats, that costs $400 and takes 5 hours. B: costs $700 has extra-wide seats and takes 3hours.
Extending this, we see that if seat comfort,
Choic e 1 Seat Pri Comfort ce Extra widea$70 Wide 070 Extra-Extra $7$7 2 0 wideWide 0000 $ 3 ExtrExtra wideaWide $40 4 EExtra widextra- 000 $4$ Wide $4000 00

price and duration are 6 the only relevant 3hrHou 5rs 5hr attributes, there are potentially eight travel 7 Hours 8 33hr choices.
Hours

Duratio n 5hr Hours

Choic e 5

Seat Pri Duratio Comfort ce n Regular 5hr5 $7 lar Hours 00 RRegularegu $700 33hr 00 lar $700 Hours ReRegulargu 5hr $400 lar Hours $400 RegRegularu $4$4 3 lar 0000 H3hrour s

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Given the above alternatives: Product 4 is very likely the most preferred choice. Product 5 is probably the least preferred product. The preference for the other choices is determined by

what is important to that individual.

Conjoint analysis can be used to determine: Relative importance of each attribute, attribute level,

and combinations of attributes.

If the most preferable product is not feasible for some

reason, identify the next most preferred alternative.


6/5/12 Using other information, such as background

demographics be able to identify market segments for

Utility Value
A traveler may like the comfort and arrival

time of a particular travel, but reject purchase due to the cost.

In this case, price has a high utility value.

Utility can be defined as a number which

represents the value that consumers place on an attribute. Utilit Pric


Utility represents the relative "worth" of the $4 6
00 attribute. $ 0 $700 700 5 5 5
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e y

Types of Conjoint Analysis


Adaptive Conjoint Analysis (ACA) Choice Based Conjoint (CBC) Full profile Conjoint Analysis

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Advantage of Conjoint Analysis


Estimates psychological tradeoffs

that consumers make when evaluating several attributes together


Measures preferences at the

individual level
Uncovers real or hidden drivers

which may not be apparent to the respondent themselves 6/5/12

Realistic choice or shopping task Able to use physical objects If appropriately designed, the

ability to model interactions between attributes can be used to develop needs based segmentation

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Limitation of Conjoint Analysis


Designing conjoint studies can be

complex
With too many options, respondents

resort to simplification strategies


Respondents are unable to articulate

attitudes toward new categories, or may feel forced to think about issues they would otherwise not give much thought to
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Poorly designed studies may over-

value emotional/preference variables and undervalue concrete variables


Does not take into account the

number items per purchase so it can give a poor reading of market share
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