Research in marketing involves determining consumer’s perception about specific brand or product and this is achieved via conjoint analysis technique. Conjoint analysis, involving gathering data through stimuli (questionnaire form), is widely used by the researchers to make decisions in discrete choice estimations.
This technique is quite different from the traditional or conventional marketing survey, making it more realistic and insightful about customers needs. Conjoint analysis is one of the best models used in extricating purchaser inclinations during the buying procedure. It helps to understand the reason behind the choices people make by proper analysis of the preference and assesses items or administrations effectively.
Conjoint analysis has one assumption i.e., the attributes can be drawn out of all the products and services to analysis the products in more accurate manner.
For example, electronic gadgets such as laptops can have several attributes like price, color, operating system, hard disk space, processing power, RAM, dimensions, windows, etc.
This technique helps to figure out the attributes that influence the buying decision of the customers.
Generally, conjoint analysis is performed under three phases:
- Data : Here, the data is collected based on the various attributes of a product and the attributes that have an impact on the customer is determined. The process is accomplished using preliminary survey approach. All the data or information collected at this phase is represented in the questionnaire format after full deliberations and analysis.
- Analysis: In this phase questionnaires are filled by potential customers and then the data is analysed. This phase helps researchers to understand consumer choices and results are displayed in the form of charts & graphs with its interpretation. Here, the researchers can get an insight into using the data analysis and comprehend the results in the most effective manner.
- Action: The third phase is the action phase where the researchers are expected to use the results of conjoint analysis and make modifications to influence the customer’s buying decision. For instance, the decision of changing the price, the addition of new features, and a change in marketing strategy. Here, the models are built to represent the impact of analysis on the demand for the product and services.
Although there are several other techniques which can be deployed to identify the product purchasing decision, it is the conjoint analysis that helps in deciding brand equity and determining how market share influences various tradeoffs between prices, brands, etc. efficiently. Some of the added advantages of using conjoint analysis include:
- It can also be used in resource allocation.
- Can be used to develop different models, which enable researchers to choose a better and educated choice.
- It can be determined to quantify value affectability to brand names, including individual level, which help researchers during the procedure of research structure.
So, how do you perform conjoint analysis?
Conducting conjoint analysis involves several steps such as:
- Choosing the attributes – In the initial stage, choose the attributes of the product/service. Example: price, size, user-friendliness, appearance, ease of use , etc.
- Assigning values to the attributes – The value of each attribute should be assigned. The values would further help in understanding the variance in each attribute. For instance: size like 5”,10”, 15” , and so on. The higher the value, the greater is its priority. Simply said, the significant values are assigned to the attributes that are more important.
- Defining the products – All the products should be defined as a combination of all the attributes which the company manufactures or provides so that a subset can be developed from the products.
- Representing the data – The combination of attributes through which a product is represented must be prepared. This data can be represented via visual diagrams, models.
- Evaluation – In this step the researcher should examine how the results and answers from the respondents will be collated. This involves three choices such as individuals’ responses, aggregation of the outcomes or segregation of the respondents into subgroups.
- Choosing the right approach – This step includes selection of apt approach which can be applied to treat, organise & analyse the data and to draw significant conclusions out of the data.
Cognitive analysis technique has an unusual ability to deliver preference on a scale unlike a ‘yes’ or ‘no’ approach, which claims to offer a detailed insight into the perception of shopper behavior and their decisions.