Conjoint analysis, Lecture notes of Designs and Groups

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Outline

▪ Conjoint analysis as a decompositional

preference model

▪ Steps in conjoint analysis

▪ Uses of conjoint analysis

Compositional vs. decompositional

preference models

▪ Compositional : respondents evaluate all the

features (levels of particular attributes) characterizing

a product; combining these feature evaluations

(possibly weighted by their importance) yields a

product’s overall evaluation;

▪ Decompositional : respondents provide overall

evaluations of a series of products composed of

various combinations of attribute levels; the overall

evaluations are then decomposed into the utilities

associated with different levels of the various

attributes;

Example of a compositional model

▪ Consider the following laptop computer:

□ Dell

□ 320 GB hard drive

□ 4 GB of RAM

□ 12.1 inch screen

□ Price of $1,

▪ On a scale from 0 (lowest) to 10 (highest), how

would you rate this computer on each attribute?

▪ Assign a total of 100 points to each of the 5

attributes so that the points reflect the relative

importance of each attribute.

Example of a decompositional model

▪ Rank the following four descriptions of laptop

computers in terms of overall preference:

Profile 1 Profile 2 Profile 3 Profile 3

Brand Dell Apple Dell Apple

Size of Hard Drive

Amount of RAM

Screen size 15.4 15.4 12.1 12.

Price $1,200 $1,200 $1,500 $1,

Rank 1/2 4/3 3/1 2/

Basic idea of conjoint analysis

▪ Overall utility for a product can be decomposed

into the utilities (called part-worths ) associated

with the levels of the individual attributes of the

product;

▪ The relative importance of a given attribute is

given by the ratio of the part-worth range for that

attribute divided by the sum of all part-worth

ranges;

Attributes and attribute levels

▪ Identify the relevant product attributes that are

considered during choice

▪ Select attribute levels that represent the options

actually available in the market

▪ Trade-off between the completeness of the

representation and the complexity of the design

Example: Laptop Profiles

Example: Laptop Profiles

Methods of stimulus presentation

▪ Verbal descriptions

▪ Pictures

▪ Actual products or prototypes

Apple Laptop with 320 GB of Hard Disk Space, 4 GB of RAM, and a Screen Size of 15.4 inches – at a Price of $1,200.

Brand Hard Drive^ RAM Screen Price A B

In-class exercise

Using the data in the table, answer the following questions:

a. How much utility does each of the two consumers attach to the

different levels of the five attributes? (Hint: Compute each

consumer’s average rating of all the options with a given

feature. For example, to figure out how much consumer A

values the Apple brand name, compute the average rating of

the six Apple laptops.)

b. What’s the relative importance of the five attributes for the two

consumers?

c. Consider consumer A’s ratings. For this consumer, what’s the

predicted utility of a Dell computer with 160 GB of hard drive

space and 2 GB of RAM, a 12.1 inch screen, and a price of

• Dell 320 GB 2 GB 15.4 in $1, Brand Hard Drive RAM Screen Price
• Apple 320 GB 4 GB 15.4 in $1,
  • Dell 160 GB 4 GB 15.4 in $
• Apple 320 GB 2 GB 15.4 in $
  • Dell 320 GB 4 GB 12.1 in $1,
• Apple 320 GB 2 GB 12.1 in $1,
• Apple 160 GB 4 GB 15.4 in $1,
• Apple 160 GB 2 GB 12.1 in $
• Apple 160 GB 4 GB 12.1 in $1,
  • Dell 160 GB 2 GB 12.1 in $1,
  • Dell 320 GB 4 GB 12.1 in $
  • Dell 160 GB 2 GB 15.4 in $1,
  • Dell 320 GB 2 GB 15.4 in $1, Brand Hard Drive RAM Screen Price
• Apple 320 GB 4 GB 15.4 in $1,
  • Dell 160 GB 4 GB 15.4 in $
• Apple 320 GB 2 GB 15.4 in $
  • Dell 320 GB 4 GB 12.1 in $1,
• Apple 320 GB 2 GB 12.1 in $1,
• Apple 160 GB 4 GB 15.4 in $1,
• Apple 160 GB 2 GB 12.1 in $
• Apple 160 GB 4 GB 12.1 in $1,
  • Dell 160 GB 2 GB 12.1 in $1,
  • Dell 320 GB 4 GB 12.1 in $
  • Dell 160 GB 2 GB 15.4 in $1,
  • Dell 320 GB 2 GB 15.4 in $1,200
• Apple 320 GB 4 GB 15.4 in $1,200
  • Dell 160 GB 4 GB 15.4 in $900
• Apple 320 GB 2 GB 15.4 in $900
  • Dell 320 GB 4 GB 12.1 in $1,500
• Apple 320 GB 2 GB 12.1 in $1,500
• Apple 160 GB 4 GB 15.4 in $1,500
• Apple 160 GB 2 GB 12.1 in $900
• Apple 160 GB 4 GB 12.1 in $1,200
  • Dell 160 GB 2 GB 12.1 in $1,200
  • Dell 320 GB 4 GB 12.1 in $900
  • Dell 160 GB 2 GB 15.4 in $1,500
• Apple 5.67 9.
• Dell 7.33 3.
• 160HD 6.17 5.
• 320HD 6.83 7.
• 2RAM 6.33 6.
• 4RAM 6.67 7.
• 12.1in 5.83 5.
• 15.4in 7.17 7.
• $900 10.25 6.
• $1200 6.75 6.
• $1500 2.5 6.
• Apple 5.67 - .83 9.50 +3. Consumer A Consumer B
• Dell 7.33 +.83 3.50 - 3.
• 160HD 6.17 - .33 5.50 - 1.
• 320HD 6.83 +.33 7.50 +1.
• 2RAM 6.33 - .17 6.00 -.
• 4RAM 6.67 +.17 7.00 +.
• 12.1in 5.83 - .67 5.33 - 1.
• 15.4in 7.17 +.67 7.67 +1.
• $900 10.25 +3.75 6.75 +.
• $1200 6.75 +.25 6.75 +.
• $1500 2.5 - 4.00 6.00 -.

• 0 1 2 3 4 Apple Dell A B - - - - 0 1 2 3 4 HD 160 GB HD 320 GB A B

0 1 2 3 4 2 GB RAM 4 GB RAM A B

0 1 2 3 4 $900 $1,200 $1, A B

0 1 2 3 4 12.1 in Screen 15.4 in Screen A B