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Customer Analytics for New Product Development

Final Exam
______________________________________________________

Instructions:
This exam is an open book, open notes exam. However, you are expected to
complete the exam on your own, without help from classmates or others.

Please type your answers in this document. After completion, submit this document
to LMS.

There are 8 pages in the Exam Booklet.

You have two hours for the exam.

The total points for this exam is 100, and this exam is worth 30% of your final grade.

All the best!

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Question 1 (30 points)
Focus on any product or service.
(1a) Describe the product or service in terms of benefits to the customer.
Product: Samsung Galaxy S5. A revolutionary phone with the following benefits:
a. 16 MP camera that allows amazing photo quality and no need to carry a camera
anymore
b. 2 GB RAM which makes the phone use experience extra smooth
c. Water resistant phone so that a customer doesnt need to worry about the phone
getting wet
d. Samsung Knox: which allows a user to keep personal and professional apps separate

(1b) You are asked to conduct a segmentation study for this product or service. Construct
a survey (questionnaire) with 10-12 questions, clearly specifying what the basis and
descriptor questions are. No open-ended questions are allowed; all questions must be
given in a form so that when data are collected, tools like Cluster Analysis can be used.
Please do not use questions seen in your assignments or from MeXL
1. Basis questions: ( on a scale of 1-5 with 1 being strongly agree and 5 being strongly
disagree)
a. I prefer brand while buying smartphones
b. I would like to have a better camera in my phone
c. I would like the browsing experience to be super-fast
d. I prefer keeping my office and personal stuff to be kept separately in my
phone
e. Water resistance in a phone is not a big deal for me
2. Descriptor questions:
a. Your age is ________ years
b. Your monthly income is ________ INR
c. Your Gender is Male/ Female
d. You are a: Businessman/ Housewife/ Professional/ Student/ Retired/ Not
working
e. You use Credit card: Yes/ No


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Question (2): 30 points
Design a Conjoint Study, with 3 attributes, with Price being one of the attributes. List 2-
3 levels for each attribute. Use MeXL to create bundles for data collection. Act as a
respondent in this Conjoint Analysis, and estimate your partworth utilities. (Hint: you
have done this in your Kirin Beer assignment).
Conjoint Study
Design


Attributes and attribute levels of the
Conjoint study.


Attributes /
Levels Level 1 Level 2 Level 3


Price 45000 50000 40000


Build Sleek Cornered
Flat
design


Screensize 4 5




Respondents' Preference
Partworths


Respondents' preference partworths. The most preferred profiles sum up
to 100, the least preferred to 0.


Respondents
/ Attributes
and Levels
45000 50000 40000 Sleek Cornered
Flat
design
4 5
Respondent 1 19 0 55 0 41 30 0 4

(2a) Provide graphs to illustrate your utilities for each attribute

0
10000
20000
30000
40000
50000
60000
1 2 3
Price
Respondents / Attributes and Levels Respondent 1
4





(2b) Explain/describe your results (i.e. the partworth utility graphs in above question),
drawing relevant insights for each attribute.
Based on the results, it seems that Rs 40,000 is the most preferred price for the
smartphone. Also, cornered design is more preferred than flat design and 5 inches
screensize is the most preferred one.


0
5
10
15
20
25
30
35
40
45
Sleek Cornered Flat design
Build of phone
0
1
2
3
4
5
6
1 2
Screensize
Series1 Series2
5

Question (3): 25 points
The following questions deal with Ideal Points and Ideal Vectors (or preference
vectors) in a perceptual map.

(3a) Define Ideal Point in 1 sentence:
The ideal point represents the location of the (hypothetical) product that most appeals to a
specific respondent.
(3b) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Point?
1. Identify the set of competing alternatives and the attributes
2. Obtain perceptions data and organize it into a matrix
3. Select a perceptual mapping method like factor analysis
4. Interpret the output:
a. The arrow will indicates the direction in which that attribute is increasing
b. The length of the line from the origin to the arrow will be an indicator of the
variance of that attribute. The longer this line, the greater is the importance
of that attribute
c. Attributes that are both relatively important and close to the horizontal
(vertical) axis help interpret the meaning of the axis

(3c) Define Ideal Vector(or Preference Vector)in 1 sentence:
The preference vector indicates the direction in which a respondents preference increases.
(3d) What specific steps would you take in Perceptual Mapping analysis to get an Ideal
Vector (or Preference Vector)?
A respondents ideal product lies as far up the preference vector as possible. The
preference map starts out with a perceptual map giving the locations of the product
alternatives. In the next step, it introduces for each respondent either an ideal brand or a
preference vector.

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Question (4): 15 points
Explain a step-by-step process as to how you would use Conjoint Analysis to estimate the
incremental price to be charged for a product with a new feature, such that its market share
remains constant. In other words, how much more can you charge for a product with a new
feature so that the market share before the addition of the new feature, and after the
addition of the new feature stays constant?
We can find the right price for which the market share remains constant by using simulation
models based on conjoint results.
Lets say there are 4 products A, B, C & D in the market. We assume that our product is A and
the company want to add a new feature and charge extra without losing the market share.
Below are the steps we would take:
a. We rst simulate a base case with products A to D with A having the new feature
and record the market share. Lets say the market share for A is 15%
b. We now conduct another simulation with A having additional feature and rest B, C &
D as constant. Lets say the preferred market share for A becomes 20% now
c. We now conduct additional simulations raising the price of A with additional feature
until its market share preference drops to original % (15%)
d. The difference in price between the more expensive improved Product A that
captures 15 percent and the old Product A that captured 15 percent reects the
incremental monetary value that the market will bear for the new feature, without
losing the market share