Conjoint Analysis

Conjoint analysis is the optimal market research approach for measuring the value that
consumers place on features of a product or service. This commonly used approach
combines real-life scenarios and statistical techniques with the modeling of actual market
decisions.

Source: https://www.qualtrics.com/au/experience-management/research/types-of-conjoint/

Stages in Conjoint Analysis

1. Identify a set of relevant product attributes
2. Define reasonable levels for these attributes
3. Create product profiles
4. Obtain consumer preferences for profiles
5. Analyse the data
6. Simulate market level outcomes

Open the MS Excel file “Matrimony Conjoint”

Open the Sheet “Regression”

Since each of the five attributes has three levels, we will create two dummy variables for
each attribute.
“Fine Arts” and “Science” for Career with “Business” as the reference
“Somewhat Fit” and “Very Fit” for Fitness with “Not Fit” as the reference
“Somewhat Funny” and “Very Funny” for sense of Humor with “Serious” as reference
“Somewhat Religious” and “Very Religious” for Religiosity with “Not Religious” as
reference
“Share Some” and “Very different” for “Match with Interests” and “Identical” is the
reference

Go to Data  Data Analysis on the extreme right corner

If Data Analysis is not being displayed Go to File  Options  Add Ins  Select Analysis
Toolpak
Select Go, check box Analysis Tool Pak, Click OK

Go to Data  Data Analysis  Regression and Click OK

In input Y range, select A1:A19

In Input X range, select B1:K19 (i.e. “Fine Arts”, “Science”, “Somewhat Fit”, “Very Fit”,
“Somewhat Funny”, “Very Funny”, “Somewhat Religious” ,“Very Religious”, “Share
Some” and “Very different”)
Check box “Labels”, “Residuals” , “Standardized Residuals” and “Normal Probability
Plot”
Select output range as M2
Click OK
The Output is displayed as follows

Interpretation
R square is 0.93 indicating a good fit. 93.15% of the variation in dependent variable is
explained by the 10 independent dummy variables. The accuracy of the model is fairly high.
In the ANOVA table, in the regression row, the p value is less than 0.05, which indicates the
overall regression model is significant i.e. the model can be used for prediction.
If we look at the p value of each independent variable, we find only six out of ten variables
to be significant namely Somewhat Fit, Very Fit, Somewhat Funny, very Funny, Very
Religious and Share some Interest.

Coefficients Interpretation
Intercept 0.681818182 Base rating
Fine Arts 0.833333333 Utility of Fine Arts is 0.833 utils more
 than Business
Science 0.166666667 Utility of Science is 0.167 utils more
than Business
Somewhat Fit 2.333333333 Utility of Somewhat Fit is 2.333 utils
more than Not Fit
Very Fit 1.666666667 Utility of Very Fit is 1.667 utils more
than Not Fit
Somewhat Funny 1.363636364 Utility of Somewhat Funny is 1.363
utils more than Serious
Very Funny 1.818181818 Utility of Very Funny is 1.818 utils
more than Serious
Somewhat Religious 0.818181818 Utility of Somewhat Religious is 0.818
more than Not Religious
Very Religious -1.545454545 Utility of Very Religious is 1.545 utils
less than Not Religious
Share some Interest -1.333333333 Utility of Share some Interest is 1.333
utils less than Identical
Very Different -0.666666667 Utility of Very Different is 0.667 utils
less than Identical

Open the Sheet “Part Worth Plots”

In Cell C9 enter the β Coefficient value of “Business” as zero

Copy the β coefficients in cells N19:N20 from the sheet “Regression” and paste in Cells
C10:C11 in the sheet “Part Worth Plots”.
In Cell C12 enter the β Coefficient value of “Not Fit” as zero
Copy the β coefficients in cells N21:N22 from the sheet “Regression” and paste in Cells
C13:C14 in the sheet “Part Worth Plots”.
In Cell C15 enter the β Coefficient value of “Serious” as zero
Copy the β coefficients in cells N23:N24 from the sheet “Regression” and paste in Cells
C16:C17 in the sheet “Part Worth Plots”.
In Cell C18 enter the β Coefficient value of “Not Religious” as zero
Copy the β coefficients in cells N25:N26 from the sheet “Regression” and paste in Cells
C19:C20 in the sheet “Part Worth Plots”.
In Cell C21 enter the β Coefficient value of “Identical” as zero
Copy the β coefficients in cells N27:N28 from the sheet “Regression” and paste in Cells
C22:C23 in the sheet “Part Worth Plots”.

Calculation of Alpha Coefficients

Assuming the sum total of utility is zero, we have to re calculate the utilities for all the levels
for each attribute

In Cell D9 enter the formula =C9-AVERAGE($C$9:$C$11)

In Cell D10 enter the formula =C10-AVERAGE($C$9:$C$11)
In Cell D11 enter the formula =C11-AVERAGE($C$9:$C$11)
In Cell D12 enter the formula =C12-AVERAGE($C$12:$C$14)
In Cell D13 enter the formula =C13-AVERAGE($C$12:$C$14)
In Cell D14 enter the formula =C14-AVERAGE($C$12:$C$14)
In Cell D15 enter the formula =C15-AVERAGE($C$15:$C$17)
In Cell D16 enter the formula =C16-AVERAGE($C$15:$C$17)
In Cell D17 enter the formula =C17-AVERAGE($C$15:$C$17)
In Cell D18 enter the formula =C18-AVERAGE($C$18:$C$20)
In Cell D19 enter the formula =C19-AVERAGE($C$18:$C$20)
In Cell D20 enter the formula =C20-AVERAGE($C$18:$C$20)
In Cell D21 enter the formula =C21-AVERAGE($C$21:$C$23)
In Cell D21 enter the formula =C22-AVERAGE($C$21:$C$23)
In Cell D21 enter the formula =C23-AVERAGE($C$21:$C$23)

Drawing Part Worth Plots

For Career
Go to Insert  Line
Right Click on the empty chart, Select Data
Click on Add
In series name select cells A9:A11
In series value select cells D9:D11
Click on Edit
In Axis label Range Select Cells B9:B11
Click on the line, Add Data labels
Fine Arts has the highest Utility

For Fitness
Go to Insert  Line
Right Click on the empty chart, Select Data
Click on Add
In series name select cells A12:A14
In series value select cells D12:D14
Click on Edit
In Axis label Range Select Cells B12:B14
Click on the line, Add Data labels
Somewhat Fit has the highest Utility

For Sense of Humour

Go to Insert  Line
Right Click on the empty chart, Select Data
Click on Add
In series name select cells A15:A17
In series value select cells D15:D17
Click on Edit
In Axis label Range Select Cells B15:B17
Click on the line, Add Data labels
Very Funny has the highest Utility
For Religiosity
Go to Insert  Line
Right Click on the empty chart, Select Data
Click on Add
In series name select cells A18:A20
In series value select cells D18:D20
Click on Edit
In Axis label Range Select Cells B18:B20
Click on the line, Add Data labels
Somewhat Religious has the highest utility

For Match with Interests

Go to Insert  Line
Right Click on the empty chart, Select Data
Click on Add
In series name select cells A21:A23
In series value select cells D21:D23
Click on Edit
In Axis label Range Select Cells B21:B23
Click on the line, Add Data labels
Identical has the highest utility

Calculation of the relative importance of attributes

In the Range Column

Select Cells E9:E11, enter the formula =MAX(C9:C11)-MIN(C9:C11)
Select Cells E12:E14, enter the formula =MAX(C12:C14)-MIN(C12:C14)
Select Cells E15:E17, enter the formula =MAX(C15:C17)-MIN(C15:C17)
Select Cells E18:E20, enter the formula =MAX(C18:C20)-MIN(C18:C20)
Select Cells E21:E23, enter the formula =MAX(C21:C23)-MIN(C21:C23)

In Cell E25 enter the formula =SUM(E9:E23)

In the Importance of Attribute Column

Select Cells F9:F11, enter the formula =E9/$E$25*100
Select Cells F12:F14, enter the formula =E12/$E$25*100
Select Cells F15:F17, enter the formula =E15/$E$25*100
Select Cells F18:F20, enter the formula =E18/$E$25*100
Select Cells F21:F23, enter the formula =E21/$E$25*100

Draw a Pie chart depicting the importance of each attribute

Go to Insert  Pie
Right Click on the empty chart, Select Data
Click on Add
In series name select cells F8
In series value select cells F9:F23
Click on Edit
In Axis label Range Select Cells A2:A6
Click on the Pie chart, Add Data labels

Importance of Attribute

15% Career
10%

Religiosity
27%
27%

21%

Estimate the ratings of profiles of bride and grooms posted on the website Shaadi.com

Profile A Profile B Profile C Profile D Profile E

Business Science Fine Arts Business Fine Arts
Somewhat Fit Not Fit Not Fit Very Fit Somewhat Fit
Serious Serious Somewhat Very Funny Somewhat
Funny Funny
Very Not Religious Somewhat Very Somewhat
Religious Religious Religious Religious
Share some Very Identical Identical Share some
Interests Different Interests

Open the sheet “Profiles”

To estimate the relevant β Coefficients for Profile A, enter the formula =IF(E4="",0,C4) in
Cell E4 and drag it down to E19.
To estimate the relevant β Coefficients for Profile A, enter the formula =IF(G4="",0,C4) in
Cell G4 and drag it down to G19.
To estimate the relevant β Coefficients for Profile A, enter the formula =IF(I4="",0,C4) in
Cell I4 and drag it down to I19.
To estimate the relevant β Coefficients for Profile A, enter the formula =IF(K4="",0,C4) in
Cell K4 and drag it down to K19.
To estimate the relevant β Coefficients for Profile A, enter the formula =IF(M4="",0,C4) in
Cell M4 and drag it down to M19.

To calculate the ratings of different profiles

For Profile A
In Cell F21 enter the formula =SUMPRODUCT($D$4:$D$19,F4:F19)
For Profile B
In Cell H21 enter the formula =SUMPRODUCT($D$4:$D$19,H4:H19)
For Profile C
In Cell J21 enter the formula =SUMPRODUCT($D$4:$D$19,J4:J19)
For Profile D
In Cell L21 enter the formula =SUMPRODUCT($D$4:$D$19,L4:L19)
For Profile E
In Cell N21 enter the formula =SUMPRODUCT($D$4:$D$19,N4:N19)

A person will choose a partner which maximizes his or her utility