A Complete Overview of Conjoint Analysis

In today's competitive market, it has become essential for brands to acknowledge what the consumers want. Depending on their budget, brands can try a lot of things to sustain in the market. However, success comes only to those who are able to meet the requirements of the consumers. While there are several ways to determine what the consumer wants, most business leaders prefer to conduct a conjoint analysis.

What is Conjoint Analysis and How to Perform it?

Conjoint analysis is an advanced technique used for statistical market research. It helps a researcher to understand how people make complex choices. Using this technique, businesses try to measure their potential customers value the most while making a purchase decision.

Imagine you are responsible for the marketing activities of a car manufacturer. For an effective marketing strategy, you need to identify what the consumers want from a car manufacturer. For example, you may need to find out whether the customers value comfort or do they value the features more? Or, is it the pricing of the cars that customers value the most? Conjoint analysis can help you get the answer to those questions.

Interestingly, there are several types of conjoint analyses that researchers can use for their needs. However, in most cases, the choice-based conjoint (CBC) is chosen by the researchers. The reason is that CBC offers combinations of attributes and also asks respondents about their preferences. In other words, CBC most closely resembles real-world buying behavior.

How do you conduct a choice-based conjoint (CBC) analysis?

Like a majority of market research methods, a CBC analysis also banks on surveys for a comprehensive result. However, conjoint survey questions can be quite taxing for the respondents. So, you need to pay close attention while conducting the whole analysis program, especially the survey part.

The best part about conjoint analysis is that you don’t need to ask every individual respondent to get the rankings. Through mathematical analysis, you can produce the ultimate rankings. This method not only combines the answers to the surveyed questions but also infers the answers to questions that were never asked. Here are some tips on how to conduct a CBC analysis.

Select the attributes carefully:

Attributes are the characteristics or features of the product or service. While preparing the survey questions, you need to ensure that you include all the attributes that influence the customers' purchase decisions. If you miss a significant attribute, it may cause an error in the results. However, you cannot overwhelm the respondents by providing too many choices for attributes. 3-4 choices are enough.

Choose the right number of levels:

Levels are the different measurements for certain attributes. For instance, if you are looking for the price, the levels can be $999, $550, $1200, depending on the product/service. While testing, you need to ensure that the chosen levels are not too close to each other. If you are testing motorbikes, don’t choose 350cc, 355cc, and 360cc as the levels for engine power. Go for levels like 350cc, 500cc, and 700cc.

Make the correct usage of the words:

While preparing the survey form for the test, you need to be careful about the words you use. You need to ensure that the language is neutral and free from biases. For instance, if you choose words like “cheap” or “expensive” instead of using the exact pricing as the levels, it may come off as biased. Also, you need to define each attribute independently without causing any confusion.

Fetch the right number of responses:

As mentioned, considering too many attributes for the test is not a good practice for surveys. Number of attributes means number of combinations, which further call for more number of responses. This can increase the cost and time required for the project. So, it is important to consider the numbers for attributes and levels in order to limit the required number of responses at an achievable figure.

Just remember these things while creating the survey questions and use the right tools to analyze the survey data.

Pro and Cons of Performing Conjoint Analysis

Like any other analytical process, the conjoint analysis also has its fair share of advantages and disadvantages. Before you try the process all by yourself, it is better to have a look into the pros and cons.

List of advantages of conjoint analysis

Conjoint analysis allows you to measure the value of certain brand names in comparison with other brands. This is the best method of measurement for brand equity.
The method is also quite useful in market segmentation. In fact, it can also help you redesign existing products or make brand new products using the benefits you have in mind.
Conjoint analysis mimics the decision process of the customers better than any other market research methods.
This method also offers a great measurement of price sensitivity. Since it processes the interaction between price and other attributes, it is able to deliver perfect results.
This is one of the easiest ways to calculate attribute interactions. Also, choice-based conjoint exercises offer perfect results.

List of disadvantages of conjoint analyses

Many users complain that the design of conjoint studies is complex in nature.
When it comes to new categories, respondents find it difficult to articulate attitudes.
The method does not consider the number of goods per purchase as an attribute. This is why it shows the tendency to provide poor readings of the market share.
There is no way for the conversion of perceptions regarding the actual features to perceptions regarding a reduced set of attributes. This makes it hard to utilize for research on product positioning.
To comply with so many options, respondents often resort to simplification strategies.

Practical application of Conjoint Analysis in different fields

Conjoint analyses are used in a variety of market research and insight applications. The list is long. However, we have narrowed down to five of them that are more significant in today’s world.

Category management and SKU pricing:

Shelf-display conjoint analysis is an effective application of the conjoint analysis technique. It helps determine the changes in the demand for specific SKU (stock keeping units) due to changes in price. Also, it can be used to optimize the set of SKUs and prices offered within a category to boost coverage, share, and revenue.

Pricing research for other categories:

Conjoint can also be used for pricing research to understand the value of different features that make other products special. In this form of conjoint design, the price is just one attribute among several others. The brand name is another crucial factor that plays a crucial role in the research. And using this technique, it becomes possible to separate the direct value of the brand name from specific features of the product.

Healthcare and pharmaceutical conjoint analysis:

Healthcare and pharmaceutical research are two areas where conjoint analysis and trade-off approaches can be of different types of use. When these industries prepare or design drugs and health interventions, they maintain a fundamental balance between effectiveness, safety, and convenience. For health providers, conjoint analysis can help understand the relative value of different health interventions.

Product and service design:

This is one of the popular applications of conjoint analysis. For new products, creating and describing the features to fit within a conjoint exercise can be extremely effective. It can help in thinking and setting key priorities and targets. It can even optimize a large number of features potentially through multiple exercises.

Employee benefits research:

The use of conjoint analysis is steadily increasing in the area of human resources. With the help of this method, the HR team tries to understand how employees value and trade-off various forms of benefits and remuneration packages. This helps to set optimum policies across the business group.

Besides, the conjoint analysis method is used in optimizing membership schemes, club features, needs-based segmentation, and much more.

Tools Used to Perform Conjoint Analysis

There are quite a few conjoint analysis tools in use. If you want to conduct accurate conjoint analysis, you need to use them too. Here is a list of the most popular ones that you can consider.

Conjoint.ly:

Conjoint.ly is a digital platform that allows the users to perform conjoint analysis for a fraction of traditional cost. With this tool, users can find respondents in a number of ways. To test something within the organization, the user can simply copy the survey link to share with people. Otherwise, he has the option to integrate the URL into another survey platform. This tool can even send invites, track responses and do a lot more than regular surveying tools.

1000 Minds:

1000minds is another digital platform which helps conduct prioritization, group decision-making, conjoint analysis, and maximizing value for money. This tool uses PAPRIKA (Potentially all pairwise rankings of all possible alternatives) to help businesses, government, and non-profit users to make better decisions. Interestingly, the operations are based on considering multiple objectives or criteria.

Survey Analytics:

Survey Analytics is a feedback platform that helps manage feedback from clients over the internet platform. It works in unison with QuestionPro, which is a leading provider of global online customer feedback capabilities. Together, these two tools can offer the most comprehensive survey, feedback, and insightful participation at the same time. Also, they help the users to engage customers, employees, and other significant parties.

Lighthouse Studio:

Lighthouse studio is quite popular among its users for its efficiency in conducting quantitative research. In fact, the software was initially designed to manage surveys and other data related to analytics. Using this tool, the users can get a complete preview of the survey and test it on a local PC without any internet connection.

Package ‘support.CEs’:

The package “Support.CEs” provides supplementary and supportive assistance to the implementation of choice experiments. It has seven essential functions, which include:

two functions that provide two functions that help create a choice experiment design, based on orthogonal main-effect arrays
one to convert a choice experiment design into questionnaire format
one for turning a choice experiment design into a design matrix
one for making the data set more compatible for a conditional logit model analysis
one for calculating goodness-of-fit measures for an estimated model
one for calculating the marginal willingness to pay for the attributes or/and levels of the estimated model.

Here’s hoping that you have learned some insightful details about conjoint analysis. However, if you still need help with your marketing assignment, you can always get in touch with the online experts.

Having trouble solving your assignment on Conjoint Analysis? Leave it to the experts of MyAssignmenthelp.com and enjoy seamless support

If you are unaware of the resources needed to conduct market research, preparing a conjoint analysis assignment can be an uphill journey. However, our team of experts at MyAssignmenthelp.com can make it a smooth sail for you. Interestingly, MyAssignmenthelp.com is one of the leading academic solution providers on the internet. And no matter what your requirements are, our experts can fulfill them without fail.

MyAssignmenthelp.com has been serving the student community for the past 10 years. Over the years, we have helped thousands of students achieve their academic goals. If you are also willing to boost your academic performance with a remarkable assignment, we are here to assist. We have designed a wide range of services that can cover every need you may have regarding your assignment. Besides, you get to enjoy the following features at no extra cost.