MKTG 376

Assignment 3: Conjoint Analysis

Due: March 20, 11:59pm

Please insert your answers directly into this document and upload into D2L.

I. Conjoint Analysis

In this question, you will conduct a conjoint analysis on credit cards. An online retailer considers
offering a new credit card to its customers. You, as a marketing analyst, are given the task to
conduct a study on preferences of its customers for credit cards.

To address these issues, your team conducted a full profile conjoint study using a sample of the
online retailer's customer database. An online survey was developed, consisting of full profiles.
The most important attributes and levels were identified based on a focus group discussion and
expert options. The data file is “CreditCard Data.xlsx.” The following attributes and levels were
identified and used in the study:

Attribute Levels
Brand Mastercard, Visa, Discover
Fee $0 fee, $10 fee, $25 fee
Interest
0% interest, 15% interest
(intro APR)
Cash back no cash back, 1% cash back
Credit limit $1,000, $3,000, $10,000

A random sample of 5 customers who were drawn from the customer database were contacted
and took the survey by e-mail.

Notes: Please check out Conjoint Analysis Tutorial.

1) In this credit card design problem, how many possible product profiles/combinations
should you create in full profile conjoint analysis? Show your work. (2 points)

3*3*2*2*3=108
2) What are the partworths and relative importance for customer 1? (8 points)
Hints: All the dummy variables have been created, and you can regress customer 1’s
ratings of the credit cards on the set of dummy variables to obtain their partworths.

Partworth Range Percentage Ranking

Brand
Mastercard 0
Visa 1.5
Discover 1.33 1.5 25% 2nd

Fee
$25 fee 0

$10 fee 0.5

$0 fee 0.83 0.83 13.89% 4th

Interest
0% interest 2.08
15% interest 0 2.08 34.72% 1st

Cash back
no cash back -1.42
1% cash back 0 1.42 23.61% 3rd

Credit limit
$10000 credit limit 0
$3000 credit limit 0
$1000 credit limit -0.17 0.17 2.78% 5th
Sum of range 6.00 100.00%

a. Find the partworths for each level of the attribute (Fill in the blank)
b. Find the Range of each attribute (Fill in the blank):
max(all levels of the attribute) – min(all levels of the attribute)
c. Sum all the values in the range column to get Sum of Range (Fill in the blank)
d. Calculate percentage (relative importance) = Range/Sum of Range (Fill in the blank)
e. Rank the relative importance of the attribute (Fill in the Blank)
f. Rank within the attribute as well. For respondent 1 (Finish the ranking for other four
attributes):
a. Brand: Visa > Discover > Mastercard
b. Fee: $0 > $10 > $25
c. Interest: 0% > 15%
d. Cash back: 1% > no cash back
e. Credit limit: $10000 > (=) $3000 > $1000
 3) What are the partworths of each attribute for each attribute for each of the 5 customers?
(7 points)
Hints: you can regress an individual’s ratings of the credit cards on the set of dummy
variables to obtain their partworths

Partworths Customer 1 Customer 2 Customer 3 Customer 4 Customer 5

Intercept 3.388888889 4 4.944444444 4.472222222 4.222222222
Mastercard 0 0 0 0 0
Visa 1.5 -0.166666667 0.666666667 1.66666667 1
Discover 1.333333333 -0.333333333 -3.33067E-16 -0.33333333 0.833333333
$25 fee 0 0 0 0 0
$10 fee 0.5 0.833333333 -0.833333333 -0.66666667 -0.333333333
$0 fee 0.833333333 1.666666667 -1.5 -0.5 0.166666667
0% interest 2.083333333 2 2.666666667 2.583333333 3.083333333
15% interest 0 0 0 0 0
no cash back -1.416666667 -1.5 -1.833333333 -0.66666667 -2.916666667
1% cash back 0 0 0 0 0
$10000 credit limit -2.77556E17 -0.166666667 1.666666667 0.666666667 0.333333333
$3000 credit limit 0 0 0 0 0
$1000 credit limit -0.166666667 0.166666667 1 -0.33333333 3.73909E-16

4) Which credit card would customer 1 choose? Show your preference calculations. (4
points)
Card A: Discover, $10 fee, 15% interest, 1% cash back, $10,000
Card B: Visa, $25 fee, 0% interest, 0% cash back, $3000

Card A: Preference = 3.389+1.333+0.5+0+0+-2.77556E-17 = 5.222 or similar

Card B: Preference = 3.389+1.5+0+2.0833-1.4167+0 = 5.556 or similar

Customer 1 would choose Card B

5) What is the market share of card A? Show your work. (4 points)

Customer 1 Customer 2 Customer 3 Customer 4 Customer 5 Market

Share
Discover, 5.222222222 4.333333333 4.277777778 4.138888889 5.055555556 10.00%
$10 fee, 15%
interest, 1%
cash back,
$10,000
Visa, $25, 5.555555556 4.333333333 6.444444444 6.555555556 5.388888889 90.00%
0% interest,
0% cash
back, $3000