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Product Life Cycle Management

Product Life Cycle Management

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Published by: Dennis Onchieku Onyando on Mar 07, 2013
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10/09/2013

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In the 1960s and 70s, organizations and academics were looking for a way to understand how
people are taking decisions. They needed to know how people behaved during interviews. Did they
say things on top of their mind or did they say what the interviewer wanted to hear? In their studies,
academics, found that by looking at the ways people made decisions could predict which choices
would be made between products and services. This is how Conjoint Analysis was born. The
analysis produces market models for products and services, which enable companies to either
improve existing products or find ideas for new ones.

To understand how the analysis works, one should describe products according to their attributes
and features. For example a telephone device can be described by its weight, its appearance, its
battery life in the case of cordless phones etc. The analysis takes these attributes or features and
asks people to make a choice between same family products of different attributes. By asking for
adequate number of attributes or features, the interviewer can work out a numerical representation
of how valuable each attribute is to a customer.

Knowing the values of each attribute in respect to customer weight, one can compare one product
to a competitor one and optimise attributes for a new one that the customer will embrace.

Developing a Conjoint Analysis involves the following steps:

1. Choose product attributes, for example, appearance, size or price.
2. Choose the values or options for each attribute. For example in the case of size one can choose
the levels 5, 10, 15 and 20 cm. The more options one chooses for an attribute the more burden
will be placed no the respondents.
3. Define products as a combination of attribute options. The set of combinations of attributes
that will be used will be a subset of the possible set of products.
4. Choose the form in which the attributes and the options will be presented, for example, as a
paragraph or as a picture.
5. Decide how the responses will be differentiated. For example responses can be split up
depending on the preferences of the respondents or depending on other characteristics of the
respondents such as age, location, etc.
6. Select the technique that will be used to analyse the data. There are different models that can
be used such as the Part-Worth model, the Liner model or the Ideal-Point model. In either way
special software written especially for conjoint analysis must be used to perform the statistics.

Source:

QuickMBA,

"Conjoint

Analysis",

On-line

http://www.quickmba.com/marketing/research/conjoint/

NPD Stage 1: Idea Generation

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