Monday, July 24, 2017

Conjoint Analysis and Market Modeling

Conjoint analysis is a term that is loosely used to describe a number of different market research techniques, all of which are designed to estimate the value people place on the attributes that define a particular product or service. Attributes can be features (such as performance, warranty, price, etc.), or benefits. Some of the variations of conjoint analysis include full profile conjoint, discrete choice conjoint, choice modeling, and adaptive conjoint. Each of these techniques has its own strengths and weaknesses depending on the type of product or service being studied. TechWise has developed its own approach to conjoint studies, called TechWise Market Model, which combines the benefits of several of these techniques.

At their core, all conjoint analyses involve trade-offs that replicate the real-world purchase process. By asking questions that simulate the buying experience, conjoint analysis can provide valuable insights into the buyer's decision making process including how the buyer would trade one product attribute (i.e., higher performance) for another (i.e., lower price). Decades of research has proven the accuracy and validity of conjoint analysis.

A well designed conjoint study has many potential benefits including the ability to:

  • Predict the impact of new products and services on preference share.
  • Predict and quantify product "cannibalism".
  • Quantify the effect of product deletions on the overall product line.
  • Identify how to increase preference share with non-customers.
  • Quantify the impact of competitive actions.
  • Measures price sensitivity.
  • Identify market segments that represent the greatest opportunity.
  • Answers virtually any "what-if" scenario.
Developing a product line strategy is like a multi-dimensional Rubik's cube.

In a conjoint study respondents are asked to rate/rank a small number of product concepts (typically less than 30). These concepts do not necessarily represent actual products in the market. Rather they are theoretical concepts that are defined by statistics. From these ratings, it is possible to accurately estimate customer preference for thousands of potential product concepts that include any combination of the attributes being studied. This ability to model/predict preference for concepts not directly measured gives conjoint studies two key advantages over other methodologies. First, when testing a new product concept it is not necessary to disclose the actual concept in the survey itself. Second, a conjoint study acts as an insurance policy because it allows the market researcher to answer new questions that come up after data collection is completed.

If you are interested in learning more about how TechWise Research can assist you with your next conjoint study, or to request a quote, contact us.


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Conjoint Research
Page Last Updated: 06/19/2014