Conjoint
Analysis is a set of techniques based on the design
of experiments used to measure the following:
1.)
The importance individuals attach to each product
feature (color, fabric, style, size, price, distribution,
package, and promotional method).
2.) The degree of preference for each level
of the new product feature (color: blue or red, package:
box or plastic sack, size: small or large).
Hypothetical
products are presented to sampled customers for preference
evaluations. Based on the customer's ratings, the statistical
models identify the significant features and predict
estimated market share of the new product. The strength
of conjoint analysis lies in the ability to measure
trade-offs in the consumer buying decision process.
Because the customer's purchase decision is always based
on trade-offs, alternative methods that are limited
to analyzing one feature at a time are inadequate and
time-consuming in the new product development process.
