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Conjoint Analysis Is A Statistical Technique Used
Conjoint Analysis Is A Statistical Technique Used
A RED 50
B BLUE 100
C 150
All possible combinations that can be formed
3 BRANDS X 2 COLOURS X 3 PRICES= 18.
Now each product profile is written on a card and
shown to customer to seek his overall preference
about the product.
TYPES OF PREFERENCE VALUES
1. INTERVAL SCALED:
Respondent is expected to give an overall
preference value in a scale from 0 to 10.
0-no interest to buy the product
10-high interest to buy the product
2.ORDINAL SCALED:
Respondent is expected to rank the product
1-Most desirable
18-Least desirable
CARD BRAND COLOUR PRICE PREFERENCE
S
1 A RED 50 5
2 A RED 100 5
3 A RED 150 0
4 A BLUE 50 8
5 A BLUE 100 5
6 A BLUE 150 2
7 B RED 50 7
8 B RED 100 5
9 B RED 150 3
10 B BLUE 50 9
11 B BLUE 100 6
12 B BLUE 150 5
13 C RED 50 10
14 C RED 100 7
15 C RED 150 5
16 C BLUE 50 9
17 C BLUE 100 7
DATA ORGANIZATION & CODING
Next step is to code the data in an
appropriate manner for estimating uitlities
using multiple regression.
We can use Dummy Coding for
independent variables
1-Reflects presence of a feature
0-Reflects absence of a feature
Brands can be code in 3 separate columns
Colours in 2 separate columns
Price in 3 separate columns
CARD A B C RED BLUE 50 100 150 PREF
EREN
CES
1 1 0 0 1 0 1 0 0 5
2 1 0 0 1 0 0 1 0 5
3 1 0 0 1 0 0 0 1 0
4 1 0 0 0 1 1 0 0 8
5 1 0 0 0 1 0 1 0 5
6 1 0 0 0 1 0 0 1 2
7 0 1 0 1 0 1 0 0 7
8 0 1 0 1 0 0 1 0 5
9 0 1 0 1 0 0 0 1 3
10 0 1 0 0 1 1 0 0 9
11 0 1 0 0 1 0 1 0 6
12 0 1 0 0 1 0 0 1 5
13 0 0 1 1 0 1 0 0 10
PART WORTH ARE
CALCULATED USING
MULTIPLE REGRESSION
BRAND
PRICE A B C
$50
$100
$150
BRAND X COLOUR
BRAND
COLOUR A B C
RED BLUE 1 2 4
3 5 6
After collecting rank for all the two factor
tables, part- worth of each of the levels is
determined.
Now estimated preference value of a cell in
two factor table is calculated by adding part
worth values of the corresponding levels
(rows &columns) of that cell.
STEPS OF TWO FACTOR APROACH
1. Determine the number of two factor tables for the given
number of factors.
2. Administer all n(n-1)/2 two factor tables one by one to the
respondents and obtain his ranks.
3. Obtain part worth using multiple regression
4. Obtain estimated ranks of each cell which is sum of part
worth of the corresponding levels (row & column) of that
cell.
5. Repeat step 2 through step 4 for necessary number of
respondents.
6. By comparing the estimated ranks of all the two factor
tables of different respondents, identify possible market
segments.