Making decisions in the company with conjoint analysis market research
In the early 70’s two professors from the Wharton School of the University of Pennsylvania, Paul Green and V.R. Rao, joined their skills to develop, by starting from mathematical psychology, the one that in social and applied sciences, such as marketing and research market, is called conjoint analysis market research.
What are we talking about? About a multivariate statistical technique, where the object of analysis is made up of two components, which aims to determine, through the segmentation of the survey participants, the ideal combination of attributes about a given product.
Please note that the analysis of the perception that consumers have about services and products that they use, is not an exact science, but you can achieve outstanding results in the field of market research; the conjoint analysis and customer satisfaction, in fact, are issues that work together, and if they are properly embedded to each other, they can hit the target.
To meet consumers, customers and users’ expectations, companies make use of increasingly complex tools in order to restore the most faithful image of the public orientations. Tension towards excellence, this requires supplementing other methodologies to all of the traditional methods of statistical quality control, such as methods to interpret and evaluate the perception of the product from the consumer’s point of view.
The ‘question’ we are talking about is the one that questions about the customer satisfaction, a mission that requires a lot of experience and the right degree of intuition. The business-oriented to customer satisfaction must perform management actions that, measuring the customer satisfaction degree, by helping to improve products and services in order to achieve their highest satisfaction: making decisions in the company with the conjoint analysis is one of these decisive actions.
How does conjoint analysis market research work?
The conjoint analysis is methodologically based on the segmentation of those who will take part in the analysis. We will then create groups divided according to socio-demographic characteristics, habits, purchasing preferences, even based on values that can differentiate the actions of their lives, such as whether they are favorable or not to divorce, euthanasia or abortion. A key criterion for segmenting the market is definitely the one that looks at the benefits that the product offers to the clients and the impact that has on them.
How do you technically develop a conjoint analysis?
We can simplify the concept by outlining the following steps:
- Determination of product characteristics for analysis
- Selection of the customers’sample of who will test the product
- Test sample asked to evaluate various combinations of characteristics
- Rate and choice of combinations from the sample
- Insertion of the data collected and processed by a software
- Creation of marketing activity of the product according to the results
The conjoint analysis is extremely important when the company needs to decide whether to change a product or designing a new line, for example.
When you ask someone to evaluate the importance of saving with regard to the quality, it is difficult to answer “measurable.” It is right in these sensitive cases that conjoint analysis comes into play. Instead of asking numerical values, you have to put together all the alternatives and offer a choice to the person.
Us just like IFF,do not take this kind of decisions, but our customers or our customers’ customers need to. And even if the company does not use it as an internal decision-making tool, we believe it is an extremely valuable, versatile and refined method.
See you soon!
If you need help, write me email@example.com
Christine Albrecht (Managing Director, Germany)
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