Understanding Conjoint Analysis
Conjoint Analysis has become one of the most widely accepted and used quantitative methods in Marketing Research. It is used to measure the various features that people perceive in a product. It is also used to learn how demand for a particular product or service is related to its price and to forecast the likely acceptance of the product in the market.
- The concept is frequently used in customer acceptance for new product design, in assessing the appeal of advertisements and in service design.
- Consumers evaluate a product’s value by combining the separate utilities of each attribute.
- The most desirable product is the one that has the most desirable bundle of benefits and attributes.
- Different segments have different preferences for different attributes- the job is to figure out what these preferences are for the target.
- By constructing a set of hypothetical products by combining the different attributes at different levels will show not just the attributes but also how much of an attribute is desired and how important that attribute is relative to all other possibilities.
- Conjoint analysis is a sophisticated technique and there are technical issues that need to be considered. In particular, the design of attributes is a crucial step in a conjoint project as choices between poorly defined levels can render the exercise meaningless.