Conjoint Analysis Steps

1. The respondent is given a set of stimulus profiles (constructed along factorial design

principles in the full profile case). In the two-factor approach, pairs of factors are presented,

each appearing approximately an equal number of times.

2. The respondents rank or rate the stimuli according to some overall criterion, such as

preference, acceptability, or likelihood of purchase.

3. In the analysis of the data, part-worths are identified for the factor levels such that each

specific combination of part-worths equals the total utility of any given profile. A set of part-

worths is derived for each respondent.

4. The goodness-of-fit criterion relates the derived ranking or rating of stimulus profiles to

the original ranking or rating data.

5. A set of objects are defined for the choice simulator. Based on previously determined part-

worths for each respondent, each simulator computes an utility value for each of the objects

defined as part of the simulation. 6. Choice simulator models are invoked which rely on

decision rules (first choice model, average probability model or logit model) to estimate the

respondent's object of choice. Overall choice shares are computed for the sample.

How to conduct Conjoint

While specific research objectives will dictate the direction of conjoint research, there are

several components common to all conjoint engagements. These steps include: definition of

attributes; establishment of attribute levels; choice of conjoint methodology; design of

experiment; data collection; data analysis; and development of the market simulator.

Step 1: Definition of Attributes

To replicate the decision-making process, it is necessary to understand each of the attributes

consumers consider when making an actual purchasing decision. Experience, previous

research, and/or the specific research objectives will determine which attributes are of
particular importance, and whether all product features should be displayed or only those

most relevant to differentiating a product from competitive offerings.

Step 2: Establishment of Attribute

Levels Once attributes for the conjoint research have been defined, it must be determined

how attributes will vary from one product concept to the next. This step involves the

establishment of attribute levels. Attribute levels must be comprehensive enough to capture

all of the products that exist, or soon exist, within the marketplace. However, as with the

definition of attributes, care must be taken to avoid respondent fatigue, so only the most

prevalent attribute levels will be chosen for testing (typically 3-5 attribute levels per

attribute). Further, the number of attribute levels chosen has a direct impact on the number of

concepts respondents will be asked to evaluate. The optimal number of attribute levels tested

will be that which ensures research objectives are satisfied while minimizing the burden

faced by respondents.

Step 3: Choice of Conjoint Methodology

Because no two product and/or service categories are exactly the same, there are a number of

conjoint methodologies at a marketing researcher's disposal. The three primary methods used

today include: conjoint value analysis (CVA), adaptive conjoint analysis (ACA), and choice-

based conjoint analysis (CBC), with adaptive choice-based conjoint (ACBC) emerging as a

new generation of conjoint analysis. For the purposes of this whitepaper, we will focus on

CBC analysis, by far the most popular conjoint methodology currently used by researchers.

Some types of Conjoint Methodologies include: 1. Choice-Based Conjoint (CBC) 2. Conjoint

Value Analysis (CVA) 3. Adaptive Conjoint Analysis (ACA)

Step 4: Design of Experiment

Having established the methodology, attributes, and attributes levels to be tested; we can then

create concept profiles (i.e., descriptions of product concepts using the attributes and attribute
levels to be used in the research). Respondents are asked to evaluate a number of these

concepts, and in the case of CBC determine which, if any, they would choose to purchase

given the opportunity. Fortunately, it is not necessary that every potential product offering be

evaluated. In fact, this would be quite impossible, as there are typically thousands of potential

product configurations in any given study. For example, there are 1800 hypothetical products

in the energy bar study (3 brands x 5 protein levels x 6 carbohydrate levels x 4 flavors x 5

price levels). However, with a carefully constructed conjoint design, we are able to calculate

respondent preference for each attribute and attribute level. Therefore, assuming a simple

additive model (i.e., product preference is the sum of preference for its attributes), we can

estimate how respondents would react to any product offering.

Step 5: Data Collection

An online survey is recommended for almost all conjoint research engagements, as it

provides the most effective, cost efficient, time sensitive, and highest quality solution.

Respondents are required to consider a great deal of information, allowing them to visually

assess the stimuli results in more reliable findings. An online presentation of product

concepts and conjoint tasks allows respondents to complete the survey at their own pace,

allowing time for thoughtful and accurate responses. With over 70% of U.S. adults accessing

the Internet via computers at home, work, or school (Source: Pew Internet and American Life

Project), an online methodology allows for data collection from a large sample set.

Step 6: Data Analysis

With a carefully constructed conjoint survey, we can statistically deduce the consumer values

for each feature respondents may be subconsciously using to evaluate concepts. Analysis of

conjoint data yields a series of scores for each respondent for each attribute level. These

scores, known as part-worth, may be likened to the unit which is an arbitrary measurement of

utility consumers associate with a product and its attributes. Each score reflects the value the
respondent associates with each attribute level, and is the building block from which all

analysis is conducted. By assuming a simple additive model, we are able to build products

and pricing structures, and then calculate the value consumers find in that product. By

comparing this to other potential products in the marketplace, we can begin to understand

how consumers will choose products in the real world.

Step 7: Development of Market Simulator

While preliminary analysis of conjoint data results in valuable insight regarding consumers

and their preferences, the real value of conjoint analysis comes from the market simulators

developed at the conclusion of the research engagement. The market simulator is a software

program, similar to a spreadsheet, which allows users to conduct "what-if" analyses with data

collected during conjoint fielding. As mentioned above, respondents can be asked to evaluate

only a small fraction of concept profiles, yet still reveal how they would respond to any

product offering. Therefore, it is possible to aggregate the preferences of all consumers to

reveal how the market as a whole will respond to any product offering. Furthermore, we can

assess how the marketplace will respond to two or more competing products by calculating

the market’s share of preference for every product of interest.