Everything in the world is undergoing a change. There is a proverb saying that “the old order changes, yielding place to new”.
Everything in the world is
undergoing a change. There is a proverb saying that “the old order changes,
yielding place to new”. Due to rapid advancement in science and technology,
there is fast communication across the world. Consequently, the whole world has
shrunk into something like a village and thus now-a-days one speaks of the
“global village”. Under the present set-up, one can purchase any product of his
choice from whatever part of the world it may be available. Because of this
reason, what was a seller’s market a few years back has transformed into a
buyer’s market now.
In a seller’s market of
yesterday, the manufacturer or the seller could pass on a product according to
his own perceptions and prescriptions. In the buyer’s market of today, a buyer
decides what he should purchase, what should be the quality of the product, how
much to purchase, where to purchase, when to purchase, at what cost to
purchase, from whom to purchase, etc. A manager is perplexed at the way a
consumer takes a decision on the purchase of a product. In this background,
conjoint analysis is an effective tool to understand a buyer’s preferences for
a good or service.
Meaning Of Conjoint Analysis
A product or service has several
attributes. By an attribute, we mean a characteristic, a property, a feature, a
quality, a specification or an
aspect. A buyer’s decision to purchase a good or service is based on not just one attribute but a combination of several
attributes. i.e., he is concerned with a join of attributes.
Therefore, finding out the
consumer’s preferences for individual attributes of a product or service may
not yield accurate results for a marketing research problem. In view of this
fact, conjoint analysis seeks to find out the consumer’s preferences for a
‘join of attributes’, i.e., a combination of several attributes.
Let us consider an example.
Suppose a consumer desires to purchase a wrist watch. He would take into
consideration several attributes of a wrist watch, namely the configuration
details such as mechanism, size, dial, appearance, colour and other particulars
such as strap, price, durability, warranty, after-sales service, etc. If a
consumer is asked what the important aspect among the above list is, he would
reply that all attributes are important for him and so a manager cannot arrive
at a decision on the design of a wrist watch. Conjoint analysis assumes that
the buyer will base his decision not on just the individual attributes of the
product but rather he would consider various combinations of the attributes,
colour, price, after-sales service’,
colour, durability, warranty’,
or ‘dial, appearance, price, durability’, etc. This analysis would enable a
manager in his decision making process in the identification of some of the
preferred combinations of the features of the product. The rank correlation method seeks
to assess the consumer’s preferences for individual attributes. In contrast,
the conjoint analysis seeks to assess the consumer’s preferences for
combinations (or groups) of attributes of a product or a service. This method
is also called an ‘unfolding technique’
because preferences on groups of attributes unfold from the rankings expressed
by the consumers. Another name for this method is ‘multi-attribute compositional model’ because it deals with
combinations of attributes.
Steps In The Development Of Conjoint Analysis
development of conjoint analysis comprises of the following steps:
1. Collect a list of the attributes (features) of a
product or a service.
2. For each attribute, fix a certain
number of points or marks. The more the number of points for an attribute, the
more serious the consumers’ concern on that attribute.
3. Select a list of combinations of various
4. Decide a mode of presentation of
the attributes to the respondents of the study i.e., whether it should be in
written form, or oral form, or a pictorial representation etc.
5. Inform the combinations of the
attributes to the prospective customers.
6. Request the respondents to rank
the combinations, or to rate them on a suitable scale, or to choose between two
different combinations at a time.
7. Decide a procedure to aggregate
the responses from the consumers. Any one of the following procedures may be
i. Go by the individual responses of the consumers.
ii. Put all the responses together and construct a
iv. Split the responses into a
certain number of segments such that within each segment, the preferences would
8. Choose the appropriate technique
to analyze the data collected from the respondents.
9. Identify the most preferred combination of
the result in designing a new product, construction of an advertisement copy,
Tags : Research Methodology - Factor Analysis And Conjoint Analysis
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