What is Conjoint Analysis Market Research?
Conjoint Analysis determines how consumers value different attributes of a product or service.
For example, the consumer goods and electrical goods industries use it. The goal of Conjoint Analysis is to find what combination of a group of attributes is the most important to consumers.
Here’s how to do a conjoint design study. Firstly, you must recognize the business problem. Secondly, you’ll need to create research questions. Thirdly, you can choose a survey method. Fourthly, it’s data collection time! Then comes the fun part: At this point, you’ll need to clean the data, analyze it, prepare a presentation, and determine your business actions.
Types of conjoint analysis:
- Menu-based Conjoint Analysis
- Full-profile Conjoint Analysis
- Choice-based Conjoint Analysis
- Adaptive Conjoint Analysis
Why is Conjoint Analysis Market Research important?
For a business trying to “Get into the heads of customers,” (Conjoint Analysis) is not just another tool. It is the best tool for that. Conjoint Analysis is most useful for:
- Finding out the sacrifices that buyers make when looking at many features together
- Finding out how the buyers value each feature
- Showing how buyers make choices in the real world
For example, let’s look at a conjoint study of smart TVs. First, an electronics company wants to start selling a new line of smart TVs. To get the most profit, they want to know what features are most important to buyers.
They settle on four main attributes.
- Display Type (OLED, LED, LCD)
If we were to use choice-based conjoint analysis, the options would be as follows:
- Screen size: 50″
- Brand: Sony
- Display Type: LED
- Price: $550.00
- Screen size: 40″
- Brand: Amazon
- Display Type: LED
- Price: $350
- Screen size: 65″
- Brand: Samsung
- Display Type: QLED
- Price: $750.00
- Screen size: 55″
- Brand: LG
- Display Type: LCD
- Price: $600
Besides the data gained from the respondents’ choice, they also give data on what feature was most important to them. In a standard conjoint analysis survey, the respondents answer 8 to 12 questions. Thus, the raw total data from the study becomes a sort of utility score, which the analysts then use to build simulations. Finally, these simulations can forecast market shares for a set of different products.
Key Job Titles
Market research analysts read the data to plan how to best work with the market. Thus, the data gained from (Conjoint Analysis) is critical to a market research analyst.
Data Entry Analysts use the data from the surveys and organize it.
Finally, Consumer Research Analysts are responsible for understanding the data gained from buyers. So, they work with other professionals to make predictions.
Why do Businesses Need CA Market Research?
Businesses of all kinds can benefit Conjoint Analysis, including grocery stores, restaurants, and large corporations. It helps them to understand which products or services their customers value over others. For example, the data gained from a study may show that screen resolution is an essential feature to people. Afterward, a consumer research analyst may decide that making more high-resolution TVs enables the company to make more money.
Key Success Factors
Conjoint Analysis should:
- influence preferences
- be clearly defined and understandable
- consist of two levels
- have varying levels in real life
Attributes can have different levels, which refers how specific it is. So, when talking about attribute levels, one must be clear, mutually exclusive, and realistic. For example, when talking about computer keyboards, we know that a keyboard may be mechanical or non-mechanical. Thus, they are on the same level. One level above a mechanical keyboard could be if the keys are linear, clicky, or tactile. Likewise, one level above non-mechanical could be if the keyboard is rollable.
Businesses must use conjoint analysis to be effective. But it is essential not to wear out the respondent with too many questions. They must give informative answers. Also, there are some guidelines when constructing surveys to find out the attributes that have the most effect on demand.
About Conjoint Analysis Market Research
Conjoint Analysis, at its core, is a quantitative form of analysis. However, the use of other techniques together with Conjoint Analysis is also helpful for qualitative and strategy research. In conclusion, good Conjoint Analysis uses focus groups, interviews, and surveys to get the best information.