Case Study
February 12, 2025
A set-up where two or more parties (also called buyers and sellers) are engaged in transaction of goods and services in exchange of money is called a market. At the market place the sellers sell their goods to the consumers (buyers) in exchange of money. Let us go through the following examples: Nokia offers wide […]
Introducing a new product in the market requires meticulous planning and relevant ideas put together after several rounds of discussions and brainstorming sessions among employees associated with the organization. There are several factors which go a long way in deciding how and when a new product should be launched so that it is not only […]
Event Managers or Corporate Communicators The question as to whether the corporate communications team in organizations has to take on the additional responsibility of organizing events has to be answered in the wider context of the organizations size and the budget that it allocates for this purpose. Though many multinationals spend lavishly on event management […]
Need for a Code of Conduct In recent months, the media world has been hit with several scandals related to the way in which they have tried to manipulate the system for their benefit. If in the UK, the Rupert Murdoch owned NewsCorp was caught bribing the police to access personal details of people and […]
Being a good Salesman does not come easily to everyone. Out of thousands who take up a career in sales, there are a few hundreds who turn out to be mediocre salesmen pushing the product and chasing sales target and many more leave the field altogether. There are few, who carve out a brilliant trajectory […]
During the sixties, when researchers tried to understand consumers’ decision making process, they used a simple questionnaire or a form.
Respondents would generally answer what was on the top of their minds or what they assumed the researcher wanted to hear. However, this did not always correspond to their actual purchase decisions.
For example, consider a questionnaire designed to understand consumers’ perceptions of the most desirable smart phone features.
On a scale of 1 – 10 where 1 is least important and 10 is most important, rate:
The survey data would usually reveal that all features are extremely important and the user would want all the features at the lowest cost. Such a discovery is not actionable and hence not usable.
Users cannot have more of all features that are attractive and less of all features that are not desirable. Instead, they must compromise of few characteristics to get more of the others. This method wherein various characteristics are considered jointly to make a purchase is known as conjoint analysis. It enables market researches to anticipate purchases with more certainty.
Conjoint analysis is also popularly called trade off analysis as buyers have to let go of certain product features that they consider lucrative to make a more practical purchase. For example a large number of people planning to buy a new smart phone might think that however much they want an iPhone 6, they will have to be content with a less expensive phone.
Thus we see that consumers are put in a situation where they are forced to evaluate the merit of the phone attributes such as configuration, OS, price, brand, etc. Thus, broadly conjoint analysis checks the compromises users make while selecting products or services.
The process of conjoint analysis is described in a simplified manner in the following steps:
For certain kind of products, consumers do their evaluation built on intangible attributes or image. These products mostly comprise of luxury items where the emotional factor rather than the rational side dominates. In cases like these, the logic of conjoint analysis does not apply.
With an exception to this situation, conjoint is quite inexpensive as compared to other similar methods such as concept testing and hence is hugely popular.
In a nutshell, it is a versatile and powerful tool to predict consumer choices, foresee their purchase decisions and hence design and launch products accordingly.
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