When a business is releasing a new product or service, it’s important that they understand the features their customers are going to place the most value in. It’s essential that a business understands how customers are going to weigh those features. In order to prepare themselves, businesses turn to conjoint analysis.
Conjoint analysis is a tool that utilizes the latest market research to help businesses determine the aspects of a product or service that a consumer values and weighs them accordingly. The goal is to determine a value for each feature so that a business understands how to develop and market new products. Research Optimus (ROP) is a premier market research firm that provides businesses with top of the line conjoint analysis services. Among a vast range of market research and analysis services, you can approach ROP for our specialized survey analysis and customer analysis services.
An Explanation of Conjoint Analysis
Conjoint analysis is a market research process that is designed to place a value on specific features. It’s generally conducted during the product inception phase. Businesses will always start with a list of potential features and then determine a method of researching customers.
Once all of the research is done, it’s then analyzed using powerful algorithms to figure out which features are most optimal. That way, a business can develop their products and services around this knowledge. In order to ensure the most accurate results, businesses employ the services of an expert research firm like Research Optimus to ensure their results are accurate.
Different Types of Conjoint Analysis
Since there are several different types of conjoint analysis, it’s a good idea to review them in detail.
- Choice-Based Conjoint Analysis This is the most common form of conjoint analysis, and it’s based on the customer choosing their favorite features from a multiple-choice list. This choice is designed to simulate actual shopping behavior, so it is a great way to get a feel for how your target market makes buying decisions.
- Adaptive Conjoint Analysis This type of conjoint analysis adds more depth to the choice-based option by basing these choices on their preferences. The target audience will only be given options based on their preferred features. The advantage is that it makes a survey much more efficient since questions are not being wasted on options with little appeal.
- Level Up Conjoint Analysis This is also known as Hierarchical Bayes Analysis, and it’s a tool used to provide a smart estimation of the utilities from choice data. This type of market research is great for those situations where there is an overwhelming amount of data to collect. So the process is to focus on individual consumer measurements on a metric where there is a lot of variances and then use the sample level averages on metrics where the variance is smaller. In essence, it condenses the levels of data being collected so that it’s easier to see patterns.
- Example 1: Determine the Right Price Pricing is such an important part of releasing a new product or service. What if your price is lower than your competition? The conjoint analysis will determine the perfect price point for your new products or services.
- Example 2: Feature Enhancement If you’re offering a product or service and decide to add more features, would it capture more leads? Would you want to increase the price or offer higher tiers? Everything has a perceived value, so the conjoint analysis will help you determine this perception.
- Example #3: Offering Additional Products or Services Sometimes it might make sense to release a second product or service to complement or even compete with another. For instance, Sony has three versions of its PlayStation gaming console. Each product is the same with varying features and prices.
ROP Uses a Specific Process for Conjoint Analysis
Following are the known factor analysis techniques:
Define the Goals
We start by defining the goals set for the research and then identify several metrics to study
Decide on Preferences
We set the preferences as instructed by the company.
Data is collected through a series of research and surveys.
In most cases, we discover metrics that the client is unaware of, so we present these to the client.
We quantify the data into a measurable format that showcases each feature and its popularity among your target market.
Finally, we estimate and rank features based on the available data.
Benefits of Conjoint Analysis
It provides insight into a number of key features that allow for personalized development.
Analyze varying responses at both an individual and aggregate level.
Easy way to provide experimental research on the pricing.
It can be used with competitive analysis.
Let Research Optimus Help you Optimize your New Services and Campaigns
Conjoint analysis has endured the scrutiny of top research institutions and is one of the most useful tools in the development of products and services. Research Optimus has built a skilled team of research experts who are adept at providing reliable data to help your business develop products and services that your consumers are sure to love. Along with conjoint analysis, if you want to evaluate potential factors likely to affect your product or service launch/re-launch, contact us for our customized services like – Brand Research, Industry Reports, Product Research, and more.