Test 3: Conjoint Analysis (11 points)

A conjoint study of automotive vehicles is conducted and the following results are
obtained:

Utility
Attribute Level (Part-
worth)
$23,000 3.79
Price $25,000 2.84
$27,000 0.13
$29,000 0
Toyota 2.02
Brand Volkswagen 1.92
Saturn 1.14
Kia 0
220 HP 0
Horsepower 250 HP 3.3
280 HP 3.42
Cloth 0
Upholstery
Leather 3.2
Yes 1.36
Sunroof
No 0

The part-worth values are the average values across all respondents in the study.

1. What is the utility of a Toyota with 280 HP, leather interior, no sunroof, and a
price of $23,000? (1 point)
2. What is the utility if the same car (in 1 above) is a Volkswagen? (1 point)
3. Which attribute is the most important for consumers? (2 points)
4. Consider the Toyota car in 1 above. How much money would an average
consumer be willing to give up (i.e. pay additional price) if a sunroof was added
to the vehicle? (4 points)
5. Suppose that we are interested in predicting the market share of a car with the
following profile: Saturn, $23,000, 220 HP, cloth interior, no sunroof. We believe
that when consumers consider our car they will also consider purchasing cars that
are currently on the market with the following profiles:
a. $27,000; Toyota; 250 HP; cloth interior; no sunroof
b. $29,000; Volkswagen; 280 HP; leather interior; no sunroof
c. $23,000; Kia; 220 HP; cloth interior; no sunroof
5.1 What is the forecast for the market share of the Saturn car that we are
interested in? (2 points) (NOTE: Please assume that the preference shares that you
obtain in the simulation using the average part-worth values are the market shares
of the respective attribute bundle).
5.2 What is the market share if we introduce a 280 HP engine instead of a 220 HP
engine? (1 Points) (Please make the same assumption as in 5.1 above).