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Research Methodology - Factor Analysis And Conjoint Analysis

APPROACHES FOR CONJOINT ANALYSIS - Factor Analysis And Conjoint Analysis

   Posted On :  27.05.2018 11:14 pm

The following two approaches are available for conjoint analysis:

APPROACHES FOR CONJOINT ANALYSIS
 

The following two approaches are available for conjoint analysis:
 
1. Multi-factor evaluation approach
 
2. Two-factor evaluation approach

MULTI-FACTOR EVALUATION APPROACH IN CONJOINT ANALYSIS

 
Suppose a researcher has to analyze n factors. It is possible that each factor can assume a value in different levels.
 

Product Profile

 
 
A product profile is a description of all the factors under consideration, with any one level for each factor.
 
Suppose, for example, there are 3 factors with the levels given below.
 
 

Factor 1

:

3 levels

Factor 2

:

2 levels

Factor 3

:

4 levels

 
Then we have 3 × 2 × 4 = 24 product profiles. For each respondent in the research survey, we have to provide 24 data sheets such that each data sheet contains a distinct profile. In each profile, the respondent is requested to indicate his preference for that profile in a rating scale of 0 to 10. A rating of 10 indicates that the respondent’s preference for that profile is the highest and a rating of 0 means that he is not all interested in the product with that profile.
 
 
 
Example:
 
consider the product ‘Refrigerator’ with the following factors and levels:
 

Factor 1

:

Capacity of 180 liters; 200 liters; 230 liters

Factor 2

:

Number of doors: either 1 or 2

Factor 3

:

Price : rs. 9000; rs. 10,000; rs. 12,000

 
Sample profile of the product
 
 

Profile Number

:

 

Capacity

:

200 liters

Number of Doors

:

1

                  Price                                  : Rs. 10, 000
                   Rating of Respondent         : ( in the scale of 0 to 10)
 
Steps In Multi-Factor Evaluation Approach:
 
 
1. Identify the factors or features of a product to be analyzed. If they are too many, select the important ones by discussion with experts.
 
2. Find out the levels for each factor selected in step 1.
 
3. Design all possible product profiles. If there are n factors with levels L1, L2,…Ln respectively, then the total number of profiles = L1L2…Ln.
 
4. Select the scaling technique to be adopted for multi-factor evaluation approach (rating scale or ranking method).
 
5. Select the list of respondents using the standard sampling technique.
 
6. Request each respondent to give his rating scale for all the profiles of the product. Another way of collecting the responses is to request each respondent to award ranks to all the profiles: i.e., rank 1 for the best profile, rank 2 for the next best profile etc.
 
7. For each factor profile, collect all the responses from all the participating respondents in the survey work.
 
8. With the rating scale awarded by the respondents, find out the score secured by each profile.

9. Tabulate the results in step 8. Select the profile with the highest score. This is the most preferred profile.
 
10. implement the most preferred profile in the design of a new product.
 

Two-Factor Evaluation Approach In Conjoint Analysis

 
When several factors with different levels for each factor have to be analyzed, the respondents will have difficulty in evaluating all the profiles in the multi-factor evaluation approach. Because of this reason, two-factor evaluation approach is widely used in conjoint analysis.

Suppose there are several factors to be analyzed with different levels of values for each factor, then we consider any two factors at a time with their levels of values. For each such case, we have a data sheet called a two-factor table. If there are n factors, then the number of such data sheets is .


Let us consider the example of ‘Refrigerator’ described in the multi-factor approach. For the two factors (i) capacity and (ii) price, we have the following data sheet.
 
Data Sheet (Two Factor Table) No:


In this case, the data sheet is a matrix of 3 rows and 3 columns. Therefore, there are 3 × 3 = 9 places in the matrix. The respondent has to award ranks from 1 to 9 in the cells of the matrix. A rank of 1 means the respondent has the maximum preference for that entry and a rank of 9 means he has the least preference for that entry. Compared to multi-factor evaluation approach, the respondents will find it easy to respond to two-factor evaluation approach since only two factors are considered at a time.
 
Steps in two-factor evaluation approach:
 
Identify the factors or features of a product to be analyzed.
 
1. Find out the levels for each factor selected in step 1.
 
2. Consider all possible pairs of factors. If there are n factors, then the  two-factor table, indicating all the levels for the two factors. If L1 and L2 are the respective levels for the two factors, then the number of cells in the corresponding table is L1L2.
 
3. Select the list of respondents using the standard sampling technique.
 
4. Request each respondent to award ranks for the cells in each two-factor table. I.e., rank 1 for the best cell, rank 2 for the next best cell, etc.
 
5. For each two-factor table, collect all the responses from all the participating respondents in the survey work.
 
6. With the ranks awarded by the respondents, find out the score secured by each cell in each two-factor table.
 
7. Tabulate the results in step 7. Select the cell with the highest score. Identify the two factors and their corresponding levels.
 
8. Implement the most preferred combination of the factors and their levels in the design of a new product.
 
Application:
 
The two factor approach is useful when a manager goes for market segmentation to promote his product. The approach will enable the top level management to evolve a policy decision as to which segment of the market has to be concentrated more in order to maximize the profit from the product under consideration.

 

Tags : Research Methodology - Factor Analysis And Conjoint Analysis
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