Buyers do not make decisions based solely on a single attribute such as brand or price, but before making a decision, they examine products in all their possible combinations.
For which Conjoint analysis is a multivariate analysis technique that reproduces these complex consumer decisions and these results help the optimal design of the commercial offer.
What Conjoint analysis can determine is the usefulness and importance that the customer gives to each of the elements of the offer to decide to buy it. This analysis allows the offer to be adjusted, in terms of price and features, to the optimal level demanded by the market and taking into account the competitive environment in which the products operate.
This analysis is designed by determining the key elements or factors in the purchase decision and the different values that these may take on in the market.
What is the objective of a Conjoint study?
Some of the objectives that are usually covered by market research with Conjoint analysis are:
- Determining the relative importance of product choice factors
- Determination of the price elasticity of the brands tested
- Quantification of the preference (utility) provided by each of the differentiating levels of the different factors (brands, price, service, etc.)
- Determination of the level of demand provided by each of the products analyzed
- Determination of demand transfers based on price variations that may occur. Identification of the price differential between offers.
- Identification of the combination of levels of the different factors that provide greater demand
- Obtaining different typologies of individuals based on the perceived utilities for each factor.
Different types of Conjoint analysis
Over the years, the information collection and processing process has evolved and brought the interviewee's experience closer to the reality that consumers face when making a purchasing decision.
–Full Profile Conjoint: Traditional Conjoint analysis based on card ordering (ranking). A series of cards representing different products are shown and the interviewee orders them from most to least preferred.
–BPTO – Brand Price Trade Off: Traditional conjoint in which there are only 2 factors: brand (product) and price. For consumer products, it is recommended to collect information through the simulation of a real supermarket linear. In this way we ensure that the responses of the interviewees are as close as possible to those that should be at the point of sale.
–Adaptive Conjoint: This analysis is carried out by computer in which the questions to the interviewees are adapted to their answers about preferences in such a way that it only answers about those together (as on the cards) but evaluates each characteristic individually.
–Choice Based: Conjoint based on cards, like the traditional FPC, but in this case, instead of performing a ranking, the interviewee must choose a single one of the cards shown, the one they would buy. It is considered to better represent the reality of purchase where the final decision It is based on “buy vs not buy”, rather than a ranking.
He ACBC (Adaptive Choice Based Conjoint) is a new Conjoint analysis technique, which allows a better estimate of the price and the introduction of a greater number of factors.
This model takes an important step in the treatment of the price variable and allows it to be treated as a continuous variable and, on the other hand, to establish conditions so that products with high characteristics are always presented at higher prices than simple products.
As we can see, there are different models that can help us determine the optimal price to maximize profits. At Hamilton Global we specialize in choosing the right Conjoint model to achieve your goals. Contact us.
