What is Conjoint Analysis and Why It’s Crucial for Market Research

What is Conjoint Analysis and Why It’s Crucial for Market Research

what is conjoint analysis

Let’s dive into the market research method called "conjoint analysis," as the Pollfish platform continues expanding its features and capabilities. This is excellent news for researchers, given that they can now apply the conjoint analysis research approach in different survey research endeavors. 

One of many market research techniques, this new feature allows researchers to measure the value that consumers place on various aspects of a product or service. By studying how your customers perceive the makeup of your offerings, you’ll understand the distinct advantages and shortcomings within their features.

In addition, by applying this research method, you can uncover your consumer preferences to better innovate, design and price your product or service. That’s because conjoint analysis allows you to understand how consumers make complex choices in real-world scenarios. 

This article explains what is conjoint analysis, how it can be applied, its benefits and how to use the conjoint analysis feature in the Pollfish platform. While this research method comes in different varieties, this piece focuses on choice-based conjoint analysis. 

What is Conjoint Analysis

Conjoint analysis is a kind of quantitative market research for measuring the value that consumers place on the features of a product or service. A survey-based research method, this commonly used approach merges real-life situations and statistical techniques to understand market decisions.

A kind of statistical analysis, this method helps businesses understand how customers evaluate both components and features of their products and services. This method is based on the principle that any commodity can be broken down into a set of attributes, each of which impacts how users perceive the value of an offering.

Conjoint analysis is especially useful for product and pricing research, as it unearths a wealth of consumer preferences and leverages that information to optimize the products and services in question.

It does so by allowing researchers to make important business decisions concerning their products and services, such as the following:

  1. Select product features
  2. Assess consumers’ sensitivity to price 
  3. Forecast market shares
  4. Understand the demand for certain features or components
  5. Predict the adoption of new products or services

The conjoint analysis method breaks a product or service down by its various components; these are called attributes and levels. Researchers can test different combinations of the components to identify consumer preferences.

The objective of conjoint analysis is to conclude what combination of a limited number of attributes is most influential on respondents’ choice or decision making. A controlled set of products or services is shown to respondents.

Then, researchers analyze how the respondents make choices from these products, which allows them to determine the implicit valuation of the individual components making up the product or service. 

These implicit valuations (utilities or part-worths) can be used to create market models for estimating market share, revenue and even profitability of new product designs.

Choice-Based Conjoint Analysis

choice-based conjoint analysis

Currently, Pollfish is offering choice-based conjoint analysis in our online survey platform. You can add this popular form of research to an Elite account. 

Other types of conjoint analysis involve asking respondents to rate or rank items. Asking responders to choose a product to buy provides insights specifically on whether they would buy it or not

As such, choice-based conjoint analysis may be more useful for campaigns that seek to uncover consumer buying preferences, in regard to specific products. The insight you gain can also be used to predict whether consumers will buy from a competitor.  

This is how choice-based conjoint analysis works:

Survey respondents are shown a series of options and asked to select the one they are most likely to purchase or use.

A respondent will see alternatives included in choice sets that are repeated.

The Importance of Conjoint Analysis

This kind of analysis is important for a variety of reasons. 

First off, its main purpose enables researchers to understand which product or service features their customers prefer over others. As such, you’ll understand the main contributors behind consumer purchasing decisions, as well as the most off-putting attributes that prevent them from buying. 

With this information in tow, you can make more informed decisions about pricing, product development, sales and marketing activities. You will be able to optimize your product, its promotional activities, accentuating the proper features and more. You’ll also be made aware of the attributes that repel consumers, which is essential for optimization.

By optimizing your product, its pricing and the marketing activities surrounding it, you’ll increase revenue, foster repeat purchases and strengthen consumer loyalty. All of these outcomes are highly sought-after and necessary for the success of your business. 

Conjoint analysis offers the convenience of being able to break down utility to consumers at individual levels, as well as to aggregate all of their responses.

This analysis can also be employed as an exclusive focus on product features and attributes regardless of price or brand name. This allows you to enable the calculation of utility on an individual basis and in regard to specific features that you intend to evaluate

It can also be used to measure the value of brands in comparison to competing brands, thereby measuring the brand equity of each brand. The information you reap shows you how strong a particular brand is in comparison to a specific product or price. 

Consequently, it helps businesses make decisions based on their own brand value in their market. This is important, as having a popular brand is not always enough, as price fluctuations and new features could impact demand.

This research technique also offers straightforward experimentation with varying factors, such as price, capabilities, color and other attributes. As such, it allows you to create a product profile, which you can change to form additional profiles for varying attributes. This is key to do before launching a new product. 

Conjoint analysis is also important, as it can be used across different industries for virtually all types of products and services, such as consumer goods, electrical items, insurance plans, housing, luxury goods, and travel. 

As a result, you can apply it to different instances if you seek to discover what type of product consumers are most likely to buy, along with what they appreciate the mostand least, about a product. Aside from marketing and advertising campaigns, this is also useful for product management. 

Businesses of all sizes can benefit from conducting conjoint analysis, including local establishments, such as grocery stores and restaurants. More importantly, the scope of this kind of analysis is not limited to profit motives only. This means charities and educational institutions can also benefit from conjoint analysis, such as for using it to determine donor preferences.

All in all, conjoint analysis is essential for examining how consumers and other respondents rate and perceive the attributes of a product, service or experience. 

Optimizing Product Campaigns and Beyond

Performing a conjoint analysis is critical for optimizing your product and concept campaigns. All brands should conduct it at multiple stages of your product’s life cycle. Conjoint analyses can break down a large number of attributes into smaller bundles for evaluations and comparisons.

As such, you should opt for a strong online survey platform to easily create and deploy conjoint analysis to your target population. 

You should use a mobile-first platform since mobile dominates the digital space and no one wants to take surveys in a mobile environment that’s not adept for mobile devices.  

Your online survey platform should also offer artificial intelligence and machine learning to remove low-quality data, disqualify low-quality data and offer a broad range of survey and question types.

The survey platform should offer advanced skip logic to route respondents to relevant follow-up questions based on their previous answers. 

It should also allow you to survey any employee. As such, you’ll need a platform with a reach to millions of users, along with one that offers the Distribution Link feature. This feature will allow you to send your survey to specific respondents, instead of only deploying them across a vast network.

With an online survey platform with all of these capabilities, you’ll be able to set up an insightful conjoint analysis and understand your consumer, or other key actors’ preferences.