See also: Conjoint analysis (in marketing)

Conjoint analysis (in marketing)

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

, Conjoint analysis (in healthcare)

Conjoint analysis (in healthcare)

-Why conjoint in healthcare market research?:Pharmaceutical manufacturers need deeper and deeper market information they can rely on to make the right decisions and to identify the most promising market opportunities[1][6] . They can obtain great benefits from understanding physicians’ prescription...

, IDDEA

IDDEA

IDDEA is a quantitative method used in market research. This method involves generating and presenting a number of design alternatives to persons who are participating in the design, selection, or market research exercise.The participants transmit data indicative of their preferences among or...

, Rule Developing Experimentation.

Conjoint analysis, also called multi-attribute compositional models or stated preference analysis, is a statistical

Statistics

Statistics is the study of the collection, organization, analysis, and interpretation of data. It deals with all aspects of this, including the planning of data collection in terms of the design of surveys and experiments....

 technique that originated in mathematical psychology

Mathematical psychology

Mathematical psychology is an approach to psychological research that is based on mathematical modeling of perceptual, cognitive and motor processes, and on the establishment of law-like rules that relate quantifiable stimulus characteristics with quantifiable behavior...

. Today it is used in many of the social sciences and applied science

Applied science

Applied science is the application of scientific knowledge transferred into a physical environment. Examples include testing a theoretical model through the use of formal science or solving a practical problem through the use of natural science....

s including marketing

Marketing

Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...

, product management

Product management

Product management is an organizational lifecycle function within a company dealing with the planning, forecasting, or marketing of a product or products at all stages of the product lifecycle....

, and operations research

Operations research

Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...

. It is not to be confused with the theory of conjoint measurement

Theory of conjoint measurement

The theory of conjoint measurement is a general, formal theory of continuous quantity. It was independently discovered by the French economist Gerard Debreu and by the American mathematical psychologist R...

.

Methodology

Conjoint analysis requires research participants to make a series of trade-offs. Analysis of these trade-offs will reveal the relative importance of component attributes. To improve the predictive ability of this analysis, research participants should be grouped into similar segments based on objectives, values and/or other factors.

The exercise can be administered to survey respondents in a number of different ways. Traditionally it is administered as a ranking exercise and sometimes as a rating exercise (where the respondent awards each trade-off scenario a score indicating appeal).

In more recent years it has become common practice to present the trade-offs as a choice exercise (where the respondent simply chooses the most preferred alternative from a selection of competing alternatives - particularly common when simulating consumer choices) or as a constant sum allocation exercise (particularly common in pharmaceutical market research, where physicians indicate likely shares of prescribing, and each alternative in the trade-off is the description a real or hypothetical therapy).

Analysis is traditionally carried out with some form of multiple regression, but more recently the use of hierarchical Bayesian analysis has become widespread, enabling fairly robust statistical models of individual respondent decision behaviour to be developed.

When there are many attributes, experiments with Conjoint Analysis include problems of information overload that affect the validity of such experiments. The impact of these problems can be avoided or reduced by using Hierarchical Information Integration.

Example

A real estate developer is interested in building a high rise apartment complex near an urban Ivy League university. To ensure the success of the project, a market research firm is hired to conduct focus groups with current students. Students are segmented by academic year (freshman, upper classmen, graduate studies) and amount of financial aid received.

Study participants are given a series of index cards. Each card has 6 attributes to describe the potential building project (proximity to campus, cost, telecommunication packages, laundry options, floor plans, and security features offered). The estimated cost to construct the building described on each card is equivalent.

Participants are asked to order the cards from least to most appealing. This forced ranking exercise will indirectly reveal the participants' priorities and preferences. Multi-variate regression analysis

Regression analysis

In statistics, regression analysis includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables...

may be used to determine the strength of preferences across target market segments.

External links

XLSTAT-Conjoint Statistical software for conjoint analysis within Microsoft Excel